austin3515

it makes no sense to me that they are not doing an ACAT transfer for the brokerage accounts. Someone might have hundreds of positions in their account. I have never heard of these accounts not transferring in kind. I guess that doesn't help much but I guess would just really push back on that position. If Fidelity is the SDBA provider, they can transfer in kind to Schwab, etc. That happens literally all the time.

I should point out as well, it is not at all uncommon for these audits not to be done by the 15th. Through no fault of our own (as the TPA) and despite the CPA's very best intentions and efforts, these audits do not get done in time. I think it is generally accepted as the norm to file the form sans audit report and get it done and amended and filed as soon as possible. You might get a DOL letter before you are able to amend but that usually says you have 45 days to comply. So I agree you're not going to have an audit done by 10/15th but I've rarely (not never) seen actual penalties imposed for delay. Many years ago my advice was to NOT file and then use the DFVC program later in liue of filing a 5500 that was known to be deficient. I was in the clear minority on that position due chiefly to the fact that everyone else was filing on time without the audit report. If the 5500 is filed without the report I can confidently tell you, your client will have a lot of company.

If you turn 60 at any time in 2025, you are eligible in that year for the whole year. You will therefore turn 63 in 2028. Because you turn 63 in 2028 you will of course not turn 64, so 2028 is the last year. So 2025, 2026, 20278 and 2028 is 4 years (60, 61, 62 and 63). So your assumption is correct. Happy Coding to you!!

I find it hard to believe that in the face of overwhelming evidence they would have no choice but to concede. Perhaps if you send them a screenshot of this post, with the Austin Powers, confirming they need the audit, they will realize the foolishness of their ways. I feel like this question is akin to the follwing: The client says "2 + 2 = 5" please proceed accordingly. IT's unsolvable equation and therefore it's impossible to suggest the proper path. If you file the 5500SF with 135 balances I assume the DOL would flag it as invalid in need of an audit (seems to be a pretty basic check, even the software validations should flag that). And if you file the large 5500 without the audit, it's only a matter of time before the DOL comes calling for sure. So again, this is the unsolvable equation.

This rule just changed for 2023, and I think we all noted your post does not say "there are more than 120 people with balances" perhaps you were just writing in shorthand and there are 1,000 people with balances but it's the big shiny object in your post that I cannot unsee 😁

If a school district sets up a foundation and funds the foundation (and perhaps has the ability to hire and fire board members), is it possible that the foundation and school could be in a controlled group? Not sure if this is a thing, but my first google search found no results...

I've given many presentations on S2.0 and this is something I bring up a lot. A lot of payroll is done only as a means to an end with respect to a larger operational system. I have a trucking company as a client, and they use software that does payroll, sure, but also tracks everything about miles driven, trucking routes, assigning jobs to truckers, tracking the trucks (maintenance, miles,, etc.) Are they really going to spend a bazillion dollars on this? I hope the answer is yes but really who knows.

On a seperate note, curious to know if others agree or perhaps have heard that payroll companies are implementing this as a modification of existing catch-up rules, and not an optional provision to "opt into." I just think their payroll systems are going to calculate the limit differently as a result of this change. They have already made decisions on how to proceed here since it is effective in just 4 months. Has anyone heard from the likes of ADP/PayChex/Paylocity, etc?

Well I'm still waiting on their response so perhaps they will surprise me. But if I were drafting amendments and giving counsel about brand new legislation, and knowing that advice will affect thousands (nay, tens of thousands of plans), and I knew there was this much ambiguity in the law, I think I would try and delay until the IRS at least told us what they thought. Wouldn't it be a shame to have to come back to all their clients with their tail between their legs and say "Well I think I was right but the IRS disagreed so everything I told you shouldn't be relied upon." That's not a position I would like to be in. And not for nothing, but this decision for sure is not in a vacuum. I would be shocked if every payroll company out there is trying to accomodate this new catch-up limit, and I'll bet a million dollars they're not asking their clients if they want to take advantage of that new feature. They are just turning it on when it's ready for all of their clients. I have no proof of this of course, but I'm pretty sure I'm right!

Well they could tell us. I am waiting for Relius to respond to me on this question. I did suggest that now would certainly be a good time for them to tell us what they think. But then I'm sure the answer is "we're waiting for the IRS to tell us what they think." Kinda hard to argue with that.

Right about now would be a great time for the IRS to weigh in 🤪

You forgot the part about the mandatory Roth catch-ups determination being based on Social Security Wages. An oversight I'm sure!

I submitted this question to Relius a well but curious if you are all in agreement: My reading of the Relius 403(b) document and the Corbel formatted 401k prototype document is that the 60-63 catch-ups will automatically be added because those documents merely reference "up to the catch-up limits". And now that limit is just higher for ages 60-63. Have others come to the same conclusion? I believe I saw an FT William email taking the position that this was their reading of their own document, which was what got me thinking.

I think it is pretty widely accepted that even owners with less than $100K of comp get the credit. if you look at the text, the words "NHCE" do not appear anywhere in there (its not very long). It only says people with more than $100,000 of comp are not eligible. I'm really talking myself into this...

If they are excluded from the plan no gateway. You could exclude them by name but you would not be able to use average benefits to pass coverage. note that you could also have 2 SPDs; one for those excluded employees and one for everyone else (so everyone else does not see the list of names). But that would be administratively challenging for a TPA to make sure you always manually edit any new SPDs. i assume they are already eligible. If not they could irrevocably elect to be excluded PERMANENTLY (perhaps redundant but I have definitely seen people ask if there is any way to revoke their irrevocable election 🤔) Pretty sure this is an exhaustive list of options unless there is some other differentiator between them and the other sub 1% owners (like job title)

1) they just don’t contribute their own money 2A) Plan NOT top-heavy; use the “each participant is a seperate classification” election for profit sharing and just don’t give them a contribution. 2B) Plan IS too heavy: exclude any direct owners who owns less than 1%. Anyone excluded from the plan is not required to receive the too heavy minimum. both assume you can pass coverage and non discrimination.

It seems to me that if a business owner has no employees and has less than $100,000 of compensation they would be eligible for the employer contribution credit. The admin expense credit would not be available because the cap is based on the number of NHCEs and in this example there are zero. But the only restriction on the employer contribution credit is the 100k of comp limit. Thoughts?

Why woudn't a contribution to the plan be deductible? I never saw anything in EPCRS say that when you make that deposit to the suspense account it;s not deductible?

yeah one is an HCE who closed their account. So at a minimum I ask for the funds back, fine. But what do you think about the sponsor depositing the overpayment to forfeitures and using to offset contributions they are going to fund anyway? How about this, every time they make a deposit we take the position that's the employer repaying the overpayment. Explain to me how that doesn't work, I dare you .

Actually the ERISA Outline did a nice job going over it... Although I do still have these two questions because I cannot tell if S2.0 eliminated them... Do I have to ask for the money back? I can't tell. Does the Employer have to deposit the overpayment to the plan's forfeiture account? This would make no difference as the forfeitures are used to offset contributions anyway, but for the same reason it seems like a ridiculous requirement.

I have a plan where 3 or 4 people were over-funded for profit sharing due to max comp issues, and severance being used. But of course they closed their account. I read 4 articles on SECURE 2.0 provisions and each was less clear than the last. None of them have nuts and bolts examples about what should be done. Do I have to ask for the money back? I can't tell. Does the Employer have to deposit the overpayment to the plan's forfeiture account? This would make no difference as the forfeitures are used to offset contributions anyway, but for the same reason it seems like a ridiculous requirement. The articles all seem to go back a forth between distributions of vested money before they were eligible for a distribution, and paymetns of funds they were never entitled to, which is what I have here.

I just had a such a good idea. The IRS should provide guidance!! Can someone please call them and make this suggestion? Thanks in advance!!

Not a lot of talk about this one but it also seems to destabalize the regulatory process. https://www.napa-net.org/news-info/daily-news/scotus-kicks-open-another-door-future-litigation

This all must mean SOMETHING because of everyone agrees it has to. Less clear is what actually changes. Perhaps in reality we will just continue to blindly follow all IRS pronouncements as gospel until we hear otherwise--and for 99.99% of the rules we will never hear otherwise. I think the DOL's fiduciary rule is in the most trouble from the sounds of it. Seems to check off all the "right" boxes for trouble under the Supreme Court opinion. The LTPT rules and the new auto enrollment guidance are safe (in my opinion) if for no other reason than any litigation in that area just seems really remote. My speculations above were more theoretical than actually thinking actual litigation was likely. We shall see!

https://www.napa-net.org/news-info/daily-news/could-scotus-chevron-decision-undermine-fiduciary-rule Really cool write-up on this by NAPA.