Bird

From a retirement plan standpoint, it doesn't matter. Max contributions devolve to pretty much the same number. I doubt a C Corp is advisable (you have to carefully zero out corporate income otherwise there is corporate tax) and I doubt an S corp is worth the trouble of setting up that separate entity and then having to take payroll to make retirement plan contributions. Most, or at least many, people who are setting up a partnership or sole proprietorship these days do so an LLC and then elect to have the LLC taxed as a partnership, or a sole proprietorship as applicable or desired. If you are not worried about liability (and I think that risk is somewhat overblown but that is a different discussion) then you can skip the shell Limited Liability Company and just set up a partnership or sole proprietorship. I don't know the answer about HSA and HRA combo. My business (C corp) has both and when I researched it a few years ago I determined it was ok, but not crystal clear. I don't remember the details on the reasoning. It might be a little agressive - someone might come along and say that it's not ok. (I have no problem telling someone they need to hire a retirement plan professional for that stuff while not doing the same myself for other stuff. ?)

The plan has to be adopted and effective before money is withheld from his pay; that's about all.

Yeah I didn't mean to be curt or rude but most of us here are fee for service people so any advice we give is a freebie. That's ok and most of us don't mind, up to a point. There are some red flags in your post (two plans when you only need one; although there isn't necessarily harm in having two and it's a way to keep the different types of money separate). As suggested, ask your broker or CPA if they can recommend a local third party administrator or try a search in your area - it's not necessarily to have someone nearby but (I think) you're more likely to get a hands on type of person rather than a giant national firm that doesn't do service very well.

Your wife needs earned income to contibute, so when you say you will give her the money, it would have to be as some sort of taxable income, either as W-2 from your company, in which case she can contribute to your plan, or as 1099 income from your company to hers, in which case she needs to set up her own plan. Whether that income is legit is a different matter. If you're doing this on your own...good luck, you have enough rope to hang yourself.

Very important point. I'm guessing that this the allocation formula is either pro-rata or integrated w/SS if you're having to give 24% to pass the 410(b) ratio test. Are the terms younger than the owners? Have you looked at a new comp allocation to reduce that contribution? It's not too late if the plan has a last day requirement.

This was answered by MWeddell above. If you get a different answer from ERISA counsel please let us know; I think everything you have raised has been answered right here.

My bad (typo); I understand. Well certainly they are determining and presumably showing the allocation somehow. The problem is the offset, presumably on account balance, is a complete unknown.

Shrug. I don't see any room for interpretation or misunderstanding. It may have been misstated; that's different from misunderstanding. I don't know how they could be "qualified internally" and at the same time "...not allocated between the three money types."

Can the participant go online and see it on the DOL website? Can you just send a pdf? I guess the SAR says they have the right to examine at the office so...if you don't want to do that, waive the $2 fee and send it.

Any/all of our MP plans were either merged or restated into something else long, long ago. You have to maintain the accounts separately and keep the J&S annuity provisions on those accounts if the rest of the plan doesn't have them. Our (FTW) prototypes have a checkbox to indicate if such money exists and it triggers the necessary language in the SPD and elsewhere.

You say that only PS balances are used to offset a DB plan, but say that you don't know that number since there is only a total balance. Unless I'm misunderstanding something, that would appear to be an insurmountable problem. How has the offset been calc'd in the past? Setting that aside (tough to set aside since it is so significant), as I think I noted recently in a similar thread, for other purposes - it doesn't matter until it matters. And it is likely to matter sooner or later. Pulling the offset issue back into play, IT MATTERS.

We are considering that question right now. I believe - I'm sure - that we will be preparing a "yes we will" notice for 2020. I don't think we need a maybe notice now for 2021 and can just issue a "yes we are" notice each year in November going forward. Probably slightly different wording since it won't refer back to the maybe notice. FTW is doing a webinar today and I'm hoping to get some feedback. I think they have revised their notices (we use our own but refer to theirs for guidance) but I haven't looked yet.

Luke Bailey, my response is that I've read and participated in these discussions many, many times, going back to PIX days and continuing here on BL, am quite sure it has been discussed in ASPPA (maybe ASPA) IRS Q&A sessions, and always the firm conclusion is as Bill Presson described it perfectly. I know the TAM facts don't line up perfectly but it doesn't take much to take them to the logical conclusion that the right to an allocation under an existing formula is earned when the conditions to receive an allocation are satisfied. It's seared in my brain and if the IRS came out with something now that said otherwise, it would take a long time to get it out of my brain. You can think otherwise but I don't think there is any gray area here.

July 2017 discussion Quoting myself: --------- I think it is TAM9735001 Key language: " Under section 1.411(d)-4, A-1(d)(8), the conditions for receiving an allocation of contributions or forfeitures for a plan year are subject to section 411(d)(6) after such conditions have been satisfied. That is, once a participant has satisfied the conditions for receiving an allocation, the participant's right to an allocation becomes section 411(d)(6)-protected, and a plan amendment cannot add further conditions. " -------- I think the reg is clear enough and not sure whether the TAM predates it or not, and don't see that it matters. I can't believe there is any dispute about it.

Not much will happen if the recipient pays the tax directly. Yes, 20% is required but there are no direct penalties (I'm not sure Sec 6651 applies). The participant could say the sponsor is liable (true) but then the sponsor would have an equal claim against the participant. A good scolding is in order, and you might want to consider whether you should(n't) be getting copies of statements directly rather than relying on someone sending them (much) later.

I don't know the answer to your question but I don't think annuitized payments (for life or a period of 10 years or more) are eligible for rollover.

Well first of all it's pretty rare to see A shares in plans any more. There are potential issues with that that I'll leave alone. Most, or at least some, investment companies will waive sales charges on money coming back in, at least for 12 months. Are they aware this is money that was removed and is being put back? Or did I misunderstand something? When you ask "...do you not charge..." what did you mean by that?

(I think) the point of the new rule is that all money has to come out within 10 years; it doesn't matter when or how. Effectively there is nothing saying anything has to happen in the year after death.

Interesting question; hadn't thought about it. As you note, it's not all that frequent. We'll probably offer whatever the law allows just to avoid confusion.

The answer boils down to "yes", at least as we would handle it. All contributions for a self-employed are treated the same on his/her 1040, so then it is a matter of deciding how to allocate on the admin side. The way I see it, a self-employed cannot exceed 402(g) if things are done properly - and by that, I mean having an election in place before the end of the year, and that election cannot or at least should not elect greater than the 402(g) limit. So if s/he is just throwing money at the plan, which is not uncommon, then the amount received up to the 402(g) limit is deferrals, and anything else is...something else. Whether that something else is within those limits is another matter, but likely no problem at all.

I think so. Also Vanguard has a program with Ascensus as RK with a "direct" (no broker) relationship.

We've seen this on occasion and have always taken the position that the employment agreement has no impact on the plan. We'll help them get to where they want to go if possible, with an actual amendment or creative ideas.

He might get to the same place by starting a SEP.

T. Rowe Price

Good point, I wasn't thinking. And thanks Belgarath for the cite. I may have been on the committee at the time...