Bird

I think it is a legit ongoing plan expense, especially if the change resulted in lower ongoing fees to participants. If such fee reductions are percentage-based, then it would be appropriate to charge on a pro-rata basis, IMO. Having said that, I think I'd urge the sponsor to pay.

Sure. But I've said multiple times and multiple ways that it is unlikely to be a problem. Assuming they are whole life policies, the CUMULATIVE limit is 50% of contributions. Maybe I'm making an unwarranted assumption, but I get the idea this is a one year bump, and it seems unlikely to put them over 50% of cumulative contributions. If they've been doing this for years, then yeah...

Yes. I'll bet you also check to make sure the right people got the right contributions; what a thought!

Exactly. How likely is it that this (the incidental benefit rule) is a problem if they exceed 415 (for what I believe to be one year)?

Your situation is no different from simply contributing too much to the "side fund" (if you are old) or the regular investment account. That is indeed a possibility, but (highly) unlikely in my experience.

Yes. The insurance policies are plan assets and the premium payments are contributions. Reimbursing them from anywhere is not ok.

Yeah this. We don't do a la carte LIIs so the whole discussion is foreign to me.

If anyone is aware of any problems arising from removing annuity options, please post. We all come at this from different angles, but as a TPA, I want to keep things as simple as possible in a complicated field, and don't want to have to explain to someone why spousal consent is needed just because a plan is written a certain way when it didn't have to be, and when the IRS has given us a specific exception to the cutback provisions allowing us to remove annuity options (and indirectly remove spousal consent requirements).

I'd like to give you the benefit of the doubt and assume you are using shortcuts in your language. To be precise, it is the presence of annuity options that triggers the QJSA. So it's not like you can just remove the spousal consent (and leave annuity options). Back in the day (1980s!), my mentor had the attitude that you just included any/all options; no reason to limit a participant. Then, the rules changed so if you had any annuity options, the QJSA was the default, which required spousal consent to waive and take a lump sum. Fortunately the IRS allowed us to remove those options without it being a cutback, and we did that for most of our plans.

I wouldn't say "Plan's discretion" - that implies a case-by-case decision - but it depends on how the plan is written, yes.

My senile computer is being an a-hole and won't copy and paste, but the thread is titled "Calculating 25% of eligible compensation for deductibility limit." Google that or search within BL and it should come up.

Mmm, I may have been stuck in the old days when deferrals counted against the (then) 15% limit and so comp used for deferrals would count. I found at least one old thread that backs up C. B Zeller's position on this. I guess I stand corrected (but note that giving $1 of PS fixes the problem).

Shrug. Not really. Eligible for PS, just not getting any. If you said eligible to defer and excluded (by plan language) from both SH and PS, I'd have to think about it, but don't really feel like it. Offhand I think eligible to defer is good enough.

Yes/yes

Uh, in a discriminatory manner not in accordance with the plan document?

The short and practical answer is "no." Of course morons shouldn't be allowed to invest in bitcoin, but where do you draw the line? How do you determine who is a moron (other than wanting to invest in bitcoin 😉). If some is ok, why is 20% ok, and not 15%, or 5%, or whatever. And frankly, why are retirement plans so special that they need special rules? Someone could be saving in a non "retirement account" for retirement. Now that I'm nearing the end of my career, I wouldn't care if they did away with "retirement" plans altogether. Lots of silliness for questionable gains, IMO. (I didn't start out cranky but sure can get there quickly.)

Exactly, and I was very vaguely alluding to this in my first response. We provide a one-page statement with that particular info (from FTW) for such programs.

I dunno, a form was filed, and it was late. They might be onto something in that the voluntary filing triggers the penalty even though it was not required. In any event I would beg for mercy, and do it again if they say no. Repeat as necessary until they see the light/logic. Stating the obvious - never file late and just wait to see what happens! Both the DOL and IRS programs are super-reasonable. (I know it's not your case, WDIK.)

That is my take, at least as far as brokerage accounts as Lou S said, and I think that's what you are working with.

Seems like there is some confusion or conflation between the lifetime income statements and the quarterly/annual statements required by PPA. The OP did not seem to mesh with the subject line. In any event, what C. B. Zeller said: "You provide it because it's legally required, and because if you don't, there is a penalty of up to $100/day/participant."

We have a client who has real estate income and considers some of it self-employment income since they are managing the properties. I think that is reasonable and appropriate. It depends.

Good point, I kind of misread the question - got distracted and missed the main point that they were in fact distributed in 2021. I agree.

There's no doubt the plan was terminated, if the termination document(s) said it was. I'm confused by your tenses - "made every effort to liquidate before 12/31/2021 so that the plan can be terminated." "Could" be? Was it in fact terminated? Anyway, the issue is whether to file a 5500 for 2022. If it were trailing dividends of $25 or so, I'd ignore it and file a final for 2021. For $1900 I think I'd file a 2022 return, especially since it is a "ML back office problem." No need to cover for them; they can pay for the extra fees (ha ha).

You mean, use the new name? I disagree. I'd use the name in effect on the last day of the year. If the 5500 had been filed on 6/30, there would have been "consideration" of the issue, and I see no reason for that to change based on the filing date.

I agree. But there would be little or no point to having a SIMPLE k vs regular k; that's why they essentially don't exist in the wild.