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Controlled group Thank you. That's what I suspected.

S-corp. sponsors a DB plan and sole-prop (spouse) is an adopting employer of the DB plan. Both make over the compensation limit. If the sole-prop (spouse) is the only entity making/deducting contributions into the DB plan (above the minimum funding requirement), can the S-corp. make the maximum ps contribution ($58k) into a DC plan and not trigger the deduction limit under 404(a)(7)?

I searched but couldn't find anything. I thought their determination would only take a year after the ASPPA article in April 2017. The PBGC was very methodical. They were asking plenty of materials, including the corporate tax returns. The PBGC letter even commented on the type of clients the advisor serviced, assets held under management, and credentials.

The PBGC finally made a determination that the plan sponsor (Investment Advisor) is considered a professional service employer under 4021(c)(2)(A). Further, the sole-owner is a professional individual under 4021(c)(2)(B). It only took the PBGC three years to make the determination since our request.

Plan currently provides SH 401(k) match contribution (100% up to 6%) on a payroll basis. Can the plan be amended mid-year to reduce the match to 100% up to 4% prospectively for the rest of the year?

Never heard this type of corporation. How does this work when it comes to retirement plans (i.e., sponsorship, wages, etc.)? I'm taking over qualified retirement plans for a one-person plan. From what I've read, the corporation is established and employs the person. The employee is then paid by the corporation. I'm assuming the corporation sponsors the plan. Who owns the corporation? Thanks

I just found out that a sole-proprietor who sponsors a defined benefit plan died in 2015 accruing 1,000 hours. The plan was effective in 2014. Can the executor of the decesased sponsor waive the minimum funding requirement in the year of death of the plan sponsor?

I thought the IRS must rely on the lastest DL. Am I wrong with that assumption? Also, I thought only the DOL can request for prior documents in an audit.

Took over a first year cb plan (2012) where the interest credit is defined to be actual return on assets. The resulting deduction limit is far less than the contribution credit since the IC is zero and the Plan does not have a floor other than IC cannot be zero. Is there a way to increase the deduction limit equal to the contribution credit for 2012? Tried at-risk but it's not enough. Plus, there's no prior service cost so I have no FT. Any ideas?

Yes death ben is pvab. I'll have to look at the alternative forms.

Particpant, whose RMD started in 2011, died in 2012. How do I determine the PVAB payable to beneficiaries in 2013? Do I use AE to determine the PVAB at death and have it accrue interest (AE) to a payment date without regards to mortality? Sorry for being vague but not sure how to post this question. Thanks

Should I be using a setback of 6 for lump sum purposes, which I think was a female rate on the unisex table?

It's been a long time since I determined a PBGC annuity factor at 120% and I can't remember if there was a setback on UP-1984 unisex. Can someone confirm that I'm on the right track? Using a rate of 4.75%, I get a factor of 11.1038 at 65 using a setback of 6. Thanks

Took over a frozen plan and the plan has $1.231M in prepaid and loss of $1.491M. EOY PBO is $1.243M and assets are $0.983M. Shoud we continue carrying those liabilities forward? The accountant didn't like the suggestion to have it expensed.

Gut feel/vague recollection and some degree of reasoning... I think I remember doing amendments for GUST restatements that looked a lot like this language, because the IRS required them, but I also think I was told by our then-document provider that this didn't specifically authorize extra contributions; they just wanted the gateway language in the plan. I think the problem here is that it just says you have to meet the gateway, not how - you have the option to reduce HCE contributions to 9%. So it's not definitely determinable. By contrast, if you look at the top heavy language in any plan, I'm quite sure it will say something like (as ours do): This minimum allocation shall be made even though, under other Plan provisions, the Participant would not otherwise be entitled to receive an allocation, or would have received a lesser allocation for the Plan Year because of: (i) the Participant's failure to complete 1,000 hours of service (or any equivalent provided in the Plan); (ii) the Participant's failure to make mandatory employee contributions to the Plan; or (iii) compensation less than a stated amount. So it's very specific about the effective override of the service requirement. The gateway language that we're discussing here doesn't say that. FWIW, our current Fort William document has this great language that says we can waive allocation requirements (last day/1000 hours) if a participant is getting another 'er contribution; that's in the basic plan document. The adoption agreement has a reference to the BPD "...for 'failsafe' rules regarding the gateway test." There is no definition of the gateway test that I can find. I saw that in my review since we're considering moving to Ft. William.

I asked the vendor about the language (no response yet), and historically, their the language has been vague, and I prefer it that way, instead of having it written down for each possible scenario. I also have a document from a different vendor and they define participants who are eligible for gateway to be anyone receiving employer contributions, other than match cotribution. This language does not state that the contrbution requirements are superceded by gateway for NHCEs.

It probably hinges on this exact language; do you care to post it? In any event, as noted, if this language does not trigger a gateway, then they could always do a corrective amendment. The attorney may be right but s/he doesn't appear to be giving the sponsor all of its options. Let me see what I can do without identifying the vendor; it is a VS doc. Here is the portion defining gateway: Minimum Allocation Gateway. The term Minimum Allocation Gateway means, for Plan Years beginning on or after January 1, 2002, a minimum allocation that must be provided to each Non-Highly Compensated Employee who receives an allocation of any Non-Elective Contribution (including any ADP Safe Harbor Non-Elective Contribution) or any Qualified Non-Elective Contribution under this Plan (or any other defined contribution plan that is aggregated with this Plan) that performs the general test for non-discrimination based upon Equivalent Accrual Rates as set forth in Regulation §1.401(a)(4)-8. Notwithstanding the above, in determining the Benefiting Participants for purposes of the Minimum Allocation Gateway, the permissive disaggregation rules under Regulation §1.410(b)-6(b)(3)(ii) and §1.410(b)-7©(3) will be applied. The Minimum Allocation Gateway is subject to the following rules: (a) Minimum Allocation Gateway Satisfied So Long As This Plan Is Not Aggregated With Any Defined Benefit Plan. The Minimum Allocation Gateway can be utilized so long as neither this Plan nor any other defined contribution plan (that is aggregated with this Plan) is aggregated with any defined benefit plan in applying the general test for non-discrimination based upon Equivalent Accrual Rates for the defined contribution plan(s). If this Plan or any other defined contribution plan (that is aggregated with this Plan) is aggregated with any defined benefit plan for purposes of applying the general test for non-discrimination based upon Equivalent Accrual Rates for the defined contribution plan(s), then the Minimum Allocation Gateway pursuant to this definition will not satisfy the requirements of Regulation §1.401(a)(4)-9. (b) Minimum Allocation Gateway Amount. The amount of the Minimum Allocation Gateway is equal to the lesser of (1) five percent (5%) of the Participant's Code §415©(3) Compensation; or (2) one-third of the Allocation Rate of the Highly Compensated Employee with the highest Allocation Rate. © Satisfaction of Minimum Allocation Gateway. The Minimum Allocation Gateway may be satisfied with any Non-Elective Contributions (including any ADP Safe Harbor Non-Elective Contributions) or any Qualified Non-Elective Contributions. (d) No Permitted Disparity. For purposes of this definition, allocations and Allocation Rates must not take into account the imputation of permitted disparity under §1.401(a)(4)-7. (e) Compensation Limited to Compensation After Entry Date. For purposes of determining if the Minimum Allocation Gateway of paragraph (b) has been satisfied, Code §415©(3) Compensation will be limited to the Participant's Code §415©(3) Compensation on and after a Participant's Entry Date of the Plan's component subject to the Minimum Allocation Gateway. (f) Treatment of Otherwise Excludable Participants. For purposes of the Minimum Allocation Gateway, Otherwise Excludable Participants will not be considered. Here is the portion about testing where it refers to gateway: General Non-Discrimination Test Requirements. For Plan Years beginning on or after January 1, 2002, if the Sponsoring Employer applies the general test for non-discrimination as set forth in Code §401(a)(4) based upon Equivalent Accrual Rates to demonstrate that a Non-Safe Harbor Non-Elective Contribution that is made to this Plan is non-discriminatory, or if a Non-Safe Harbor Non-Elective Contribution that is made to this Plan is aggregated with one or more other plans of the Sponsoring Employer so that the Sponsoring Employer can apply the general test for non-discrimination set forth in Code §401(a)(4) based upon Equivalent Accrual Rates for the defined contribution plan(s) (including this Plan) to demonstrate that the plans (including this Plan) are nondiscriminatory, then the following rules will apply: (a) Defined Contribution Rule. If this Plan (or any defined contribution plan(s) which are aggregated with this Plan) is not aggregated with any defined benefit plan of the Sponsoring Employer for purposes of applying the general test for non-discrimination based upon Equivalent Accrual Rates for this Plan (or any defined contribution plan(s) which are aggregated with this Plan), then any NHCE who is a Participant in this Plan (or, if any defined contribution plan(s) are aggregated with this Plan, any NHCE who is a Participant in this Plan or the other defined contribution plan(s)) and who receives an allocation of Non-Elective Contributions and/or QNECs must receive an allocation of Non-Elective Contributions and/or QNECs that is at least equal to the Minimum Allocation Gateway for the Plan Year, subject to the following provisions: (1) Circumstances When Minimum Allocation Gateway Not Required. The Minimum Allocation Gateway requirement need not be satisfied if this Plan (or the group of any defined contribution plan(s) which are aggregated with this Plan) has Broadly Available Allocation Rates or a Gradually Increasing Age or Service Schedule. (2) Treatment of Otherwise Excludable Participants. For purposes of this paragraph (a), Otherwise Excludable Participants will not be considered. (b) Combination of Defined Benefit/Defined Contribution Rule. n/a

Tom, I think the administrator offered an amendment under -11(g) but I attorney nixed the idea. I'm trying to get a detailed reason as to why he didn't like a corrective amendment since I was not involved with the attorney directly.

It probably hinges on this exact language; do you care to post it? In any event, as noted, if this language does not trigger a gateway, then they could always do a corrective amendment. The attorney may be right but s/he doesn't appear to be giving the sponsor all of its options. Let me see what I can do without identifying the vendor; it is a VS doc.

We have an ERISA attorney reviewing a dc document (it's a new comparability plan), and he is questioning the gateway allocation. The plan has last day and 1,000-hour requirements and is providing 3% SH. There are two participants who received a 3% SH but have terminated employment before year end and both are in the covered test. The ERISA attorney is having a hard comprehending that those two participants require a gateway minimum (5% in this example) because the document does not explicitly state the gateway minimum overrides the last day/1,000- hour requirements. The gateway definition only states that it must be give to NHCEs. He further says that since this is discretionary contribution, the HCEs should lower their allocation (ie to 9%) instead of having to give those two participants an additional 2%. Any opinion would be appreciated. Thanks

Tom, I believe it's Announcement 2011-21

Does anyone know #$%! 6 and 12?

Has anything change recently in determining an assumption for the expected rate of return on assets? Thanks

Can someone provide a regulation that would allow a participant to reduce or stop salary deferrals immediately, or 30 days, upon a participant's request? Thank you.

The client failed to deposit non-elective contributions for the prior year by the their tax filing deadline of 09/15. Can I rely on the 30-day period under 415© that it will not affect any non-discrimination issues for the current year? Therefore, the timing of deposit for the prior-year contribution will only be a deduction issue. Thank you.