drakecohen

Out of curiosity, if it were a CP-406 notice the client got could they still submit under DFVCP?

Sorry if this has been covered before but I also have variations on the initial question that may be unique: Situation: Sponsor has DB and SH DC plan. 2 NHCEs. HCE1 is sole owner and only Key, non-owner HCE2. Since no PS in DC Plan that plan is exempt from TH. DB document says any TH to be provided under the DB. Q1: Would the TH minimum in the DB be 2%- or 3%- of pay? Q2: If any PS contribution were to be made in the DC plan then would the answer to Q1 change? Q3: If HCE2 were excluded from DB plan would any TH be due them under DC plan if no PS made to DC? Q4: If HCE2 were excluded from DB plan would any TH be due them under DC plan if a PS were made to DC and would that TH to HCE2 be 3%- or 5% of pay?

The PPA 2006 Lump Sum Calculator website just added AMT18 and I got their annuity value when ignoring the IRS q0 number. In the past I developed the lx factors from the qx starting with q1. I wonder what the q0 is and how it would apply. Comparing AMT18 to AMT17 based on the 10/17 segment rates it came out to a 3.9% hike.

Has anyone used the 2018 factors yet to get an AMT18 table. No AMT18 table yet on this website that I use for cross-checking: https://www.pensionbenefits.com/calculators/cal_main.jsp?sub_item=ppa06_lumpsum_cal When I go to input the Qx factors the 2018 ones now start at age 0 instead of age 1 (2017 and 2018 factors attached). Are the ages 0 and 1 in the 2018 listing supposed to be added together? qx-2018.pdf qx-2017.pdf

The PBGC recently filed a bankruptcy claim for $937 million against a plan sponsor who went bankrupt last March but where the Defined Benefit Plan they sponsored had an AFTAP OF 115% in 2015 ($911 million in assets and $789 in liabilities). In looking over the 5500 all the assets are reported as being in a Master Trust Investment Account. Could an MTIA really be worthless in a bankruptcy? Or could this be the PBGC filing a routine claim to protect themselves? 2015 5500 and PBGC claim letter attached Westinghouse - pbgc claim-1.pdf westinghouse-5500.pdf

Accountant posed this question and could not find anything definitive as to an answer. One-participant Defined Contribution Plan with life insurance and participant over age 70-1/2. For simplicity let's say: 12/31/15 account balance: $100,000 (including cash value of life insurance) Payout factor: 22.9 PS58 cost: $200 2016 RMD $4,367 ($100,000 / 22.9) Does the participant need to get a check for $4,367 during 2016 or $4,167 with the other $200 covered by the PS58 cost?

Can a doctor who sold his practice to a hospital set up a Defined Benefit plan based on additional income he now gets. Specifically: 1) MD and his two employees are now on the hospital payroll and he does surgery for hospital patients 2) Excluded from his contract with the hospital are other medical procedures (elective surgieries, routine consultations) for which MD gets fees paid to his corporation which he still maintains. Any issues with : (a) setting up a plan using that non-hospital income, or (2) those other two employees not being covered under the MD's own plan?

There is a cash balance/PS-401k combination being tested for nondiscrimination. Cash balance has statutory 21 & 1 eligibility but PS/401K has a 3 month wait. Do all participants need to be included in the General test or only those meeting the 21 & 1 eligibility requirements? Would it matter if only the 401k part had a 3 month wait and it was 21 & 1 for the PS portion of the DC plan?

Would 415(b)(2)(E)(ii) apply to adjusting all optional forms of benefit including lump sums or does it not apply to lump sums? I am getting conflicting opinions. Here is the wording (also attached): (ii) For purposes of adjusting any benefit under subparagraph (B) for any form of benefit subject to section 417(e)(3), the interest rate assumption shall not be less than the greatest of - (I) 5.5 percent (II) the rate that provides a benefit of not more than 105 percent of the benefit that would be provided if the applicable interest rate (as defined in section 417(e)(3)) were the interest rate assumption, or (III) the rate specified under the plan. Example: High 3-year average salary/annual benefit: $100,000 Participant age: 70 Plan interest rate: 5% AMT15 mortality table (i) 5.5% factor - 10.2 (II) 417(e)(3)/1.05 = 11.4 (III) plan 5%: 10.5 Would the maximum lump sum payable be $1,020,000 = 10.2 x $100,000 or does this section not apply to lump sums? Related question: any limits on the mortality table that can be used? For example, instead of AMT15 can GAR94 set back 30 years be used for (i) and (iii) above? 415b.pdf

Is the rule that a Defined Benefit Plan has to be 110% funded AFTER the substantial owner takes his/her distribution and, if so, what factors is that liability value calculated with? Options: 1) plan document; 2) 417(e) 3) whatever factors the owner's lump sum was based on 4) HATFA rates 5) PPA rates

Another twist. This Kiplinger article from 2013 - last paragraph: http://www.kiplinger.com/article/retirement/T047-C000-S004-moving-ira-assets-into-a-401k.html Another candidate for a reverse rollover: someone who is still working at age 70 1/2, when required minimum distributions must start. There's an exception to the RMD rule: A worker at that age does not have to take RMDs from the 401(k) of his current employer unless he owns 5% or more of the company. To avoid RMDs while still working, he could roll his IRA and any 401(k)s from former employers into the 401(k) of his current employer. The current 401(k) plan must allow such rollovers.

If you are still working at a company with a 401(k) plan but your account has money rolled over from either a prior unrelated employer or an IRA would that rolled-over portion of your account be subject to RMDs at age 70-!/2?

One-participant plan with principal now at age 70. Plan Normal Retirement Age: 62 High-consecutive 3-year average-pay at $150,000 and was accrued at NRA Contributions were being made after NRA due to PPA higher limits on deductions and now the plan is overfunded by about 50% when valuing an annual benefit of $150,000. Assuming an annuity factor of 10 at age 70 is the maximum lump sum that can be paid: a) $1.5 million = $150,000 x 10 b) $2.7 million = $150,000 x 10 + $150,000 x 8 (8 years of missed payouts); or c) around $2 million with the $150,000 annual benefit at NRA actuarially adjusted up though not above the 415(b) dollar limit Thanks in advance for any responses and if answering either (b) or © can you provide a cite?

A was told that the affiliated Service Group rules described in Treas. Reg. § 1.414(m) provide that all employees of the members of an affiliated service group shall be treated as if a single employer employed them and thus A couild not maintain a separate plan from B.

B considers itself an Affiliated Service Group. A's former employees are now B's W-2 employees (except for the doctors who still get their W-2s from A). Since B's plan has no company contributions the question is what the doctors in A can do: a) Keep their plan as is and include B's employees as if they were their own; or even b) Keep their plan only for themselves knowing there would be no company contributions allowed but make their $24,000 in 401(k) deferrals.

In what might become a common situation for insurance reasons: Medical practice (A) with two doctors and 5 regular employees has a SH 401(k) plan where the doctors maximize. As of 2/1/15 the 5 regular employees of A will be on the payroll of an ASG (B) which has about 100 other arrangements like this with other medical practices. B maintains a 401(k)-only plan. Questions: 1) Can practice A continue their plan if they include those 5 employees going on company B payroll? 2) Any other issues? Thank you.

This is a great question. Due to some action(s), is it possible that the plan is terminated automatically under its own terms? This is a real life situation and the MD retired as of 9/30/13. He sold his practice and I'm not sure of the fate of the other 4 employees , if that affects anything, but they are definitely off his payroll. The accountant is now doing his 2013 taxes and wondering if there's anything he can put in for the final year that could only go to him since as of 12/31 he is still employing himself.

Sole Proprietor MD with 4 regular employees all in a Profit Sharing Plan. Practice sold on 9/30/13 in an asset sale. As of 12/31/13 none of those 4 employees are on his payroll. Is there anything precluding him from make a 2013 Profit Sharing contribution only for himself?

Assume two participants: one key and one non-key. The non-key however is an HCE so ADP testing is not an issue. The plan went top-heavy for 2014 and the key employee wants to terminate the plan effective 4/30/14 No safe-harbor provision and the key employee has already made $5,000 in 401(k) deferrals on a salary of $50,000 for 2014. Questions: 1) Assuming the non-key employee will still be employed as of 4/30/14 is a top-heavy minimum of 3% of their 1/1/14 - 4/30/14 salary due to them? 2) If so, to avoid paying any top-heavy minimum is there any way the key employee can take back his $5,000 401(k) deferral for 2014?

Is this scenario feasible? Plan company owner has all union employees and is also paying union dues on his salary.(to get in the union health plan?) Can that owner employee receives his compensation in two parts: (a) compensation subject to union dues and (b) compensation not subject to union dues and be eligible to maintain a separate plan for himself alone using that part of his compensation not subject to union dues?

Must eligible employees (whether deferring or not) under a safe-harbor (match) 401K Plan receive a 5% top heavy minimum contribution if the employer also sponsors a defined benefit pension plan? Can the safe-harbor match be applied toward the 5% top heavy obligation? Thank you.

Corp. owned 49% by Father and 51% by his Daughter. Daughter and 3 other unrelated non-union employees participate in a 401(k) plan sponsored by the Corp. 401(k) excludes union members. Father has modest W-2 ($12,000) from Corp. and is paid a large 1099R ($200,000) from Corp. for Management Services that goes on his Schedule C. Assuming Father is a union member, can this be considered a Controlled Group or Affiliated Service Group to allow the Father entry into the plan based on his Schedule C income?

Any problem with this scenario: Corporation-sponsored Profit Sharing Plan with 401(k) feature including catch-ups One participant 2012 salary: $250,000 2012 Profit Sharing contribution $50,000 2012: 401(k) deferral: $5,500

Facts: 1) Participant born 7/2/1950 2) Terminated employment in 2007 and rolled over $100,000 into an IRA 3) In 2009 cashed in the IRA. Question: Would the age 55 exception from the 10% penalty tax to qualified plan distributions maintain after it's been rolled over to an IRA?

Thanks for the response. Any problem with limiting deferrals by individual?