austin3515

The definition of a fiduciary is anyone with discretionary authority over plan assets. Are there any fiduciaries with respect to TIAA's old Individual Annuity products held by many schools/colleges? They have no control whatsoever which is why they are so frustrating from a fiduciary perspective. But perhaps that is their saving grace as a fiduciary?

Had that happen before too, with the retiring owner or something, and then you panic

Participant contributes 80% of pay and we use net comp. So 401k = 8,000, comp = 2,000 percentage = 400%. Relius let's it through. Anyone have a problem? I'm not aware of any reg and this is not a target QNEC situation.

Too damn complicated, I'm just waiting until 2015!

I guess I agree with you all. How can you make something unhappen that did actually happen. He was a Participant.

Can I amend the PS source plan entry dates today if the plan has a last day rule? Plan has entry dates retro to 1/1 in year eligibility was met and we want to make it 1/1 and 7/1 following. So some people who would have been eligible will not be. I say this is ok because they have not accrued a benefit yet due to last day rule. [i am aware that I need to watch out for any retirees, etc, if allocation conditions are waived].

hey I just realized something fun - you should be able to come up with a formula to calculate the break-even percentage based on the marginal tax rate! Have to work on that one!

Bingo, with one exception, and that is, unless you do a calc based on dollars instead of percentages it's hard to determine the value. What if 70% of the total goes to the owners? Is there net tax savings? Hard to say... But if $100K went in, you saved $45,000 in taxes and gave $30,000 to the employees (i.e., 70%), you saved $15,000.

Well now we're talkin...

I don't know, I researched this once before. The EOB was pretty clear, as stated above, once you've begun there is no mechanism to stop. RMD's must be done each year following your RBD. That's the only reasonable interpretation of what the code says. There is no provision in the code or regulations to suspend RMD's after your RBD. Considering the 50% excise tax you'd be nutso not to take them (a random informal power point on the IRS website notwithstanding).

That's what I do too. I'm surprised no tax firms have made something like this available. I've always said total deduction x tax rate - employee contributions to figure the tax savings. I think ESPECIALLY when you're talking about profit sharing that is the analysis for sure because the SHNEC already paid for the deferrals. If anyone took finance in college that is referred to as a "sunk cost" that should not be taken into account when deciding whether or not to fund the profit sharing. Of course in the plan design phase (or before the beginning of a plan year it is relevant. Geeze, maybe I just answered my own question

Yes, but do you include 401k in the "deduction"?

The finer points of trust-law do little to assuage this rationale individuals superficial concerns.

The document thing made me think, and I checked w/ Corbel and they said I should be able to do what I'm trying to on our VS.

Everyone in the plan has the same opportunity to direct their own investments. I don't think there are any unusual trust (Webster definition) issues here. Owner C who has $1,000,000 dollars a) does not want a statement saying that his Million is owned by someone other than himself and b) does not want to be responsible for the investment losses in any event for Owner B's investment decisions on his million. Both seem like perfectly rational motivations. On this we agree!! It seems strange to be uncomfortable with this delegation but not the individual plan strategy which as far as I am concerned is three steps past a delegation of responsibilities. Is there a rule or some guideline or even principle that I am violating?

The calculation is essentially "what does the employer get for a tax deduction compared to employer contributions allocated to participants."

OK, I guess I didn't read Bird's closely enough. It seems to me that expressly because it can be done with 4 plans it should be able to be done with 1 plan. That takes nondiscrimination off the table altogether because clearly the right to be a trustee is not as valuable as the right to be a trustee AND have one's own plan. But I don't understand how merely delegating the responsibilities of the Trustees (which is a very routine aspect of Trustees/Fiduciaries) creates a problem. The Employer has the discretion to delegate responsibilities among the Trustees. What in particular is problematic about delegating them in this manner? Would it be more appealing if Owner Steve was the Trustee of Owner Bob's account? It should not be, in my opinion anyway. How about if Owner Steve was Trustee over not only his own account but the accounts of those employees in his division, and the same for Bob and his division?

When calculating for owners the tax benefit of their plan, do we include 401(k) in that analysis? I've always said "no" because more likely than not there is some level of 401k that can be done with no employer contribution at all. But if the Plan is top-heavy, I suppose the 3% is the cost of doing the 401k quite literally. But it also occurs to me that I'll bet someone has done quite a bit of research on this analysis. I wouldn't be surprised if one of the large accounting firms has written something about this. If not, they should, because I have this conversation with clients all the time. Does anyone have any info they can share?

There's something like 10 other employees and no one has any intention of making them Trustees. So what I'm hearing is that no one really has a problem with this set-up?

I do not think being a Trustee is a BRF. There is a literally nothing that a trustee can do that the participant cannot.

Have a plan with 3 partners. The 3 partners don't want to be responsible for the investment decisions of the other two. What's more, they don't want the other partner listed as the "account owner" (these are brokerage accounts) on what is for each of them a very substantial balance. So we have each partner listed as trustee of their own personal accounts, and just one of the partners serves as Trustee for the other employees. It just so happens that one of the other employees who is semi-retired is the founder of the partnership, and he also wanted the same set up (i.e., trustee of his own account). This person obviously has a lot of clout and the 3 partners for political reasons do not want to say no. There are no rules regarding who can serve as Trustee - any one have a problem with this?

Wasn't someone saying something about getting burned really badly if you don't know the rules

IF the employer wants to provide a reasonable benefit at minimal cost, then you bet. They can at least do an IRA.

how could you hope to pass the 401(a)(26) requirements? This doesn't apply to 401ks I know you know that My2Cents... Given that the intention is apparently to provide nothing to the hourly people, how could you hope to pass coverage By excluding all of the HCE's

No offense but if you're drafting documents for clients and have that question, then I sure hope someone who knows this rule is helping you out. I'm not saying it to be critical - only because you can really get burned if you don't know this stuff cold.