John Feldt ERPA CPC QPA

We'll have the chauffer deliver a copy to you.

Find HR 1865. Go to Division O, section 114.

The new rule, to start RMDs at 72 instead of age 70.5, are only changing the age, like this: If you turn 70.5 after 12/31/2019, then your first RMD year is the year you turn age 72. The rest of the rules that apply, such as being a 5% owner, or being retired, are unchanged. The RBD is also not changed. The first RBD should be April 1 of the year you'll be age 73 with another RMD due by the end of that same year.

My understanding is that pension plans can allow an in-service distribution at age 59.5, but that the normal retirement age rules still apply as described above in Larry’ post.

Thanks! The photo is my son, actually. He's now an eagle scout and is already in college! Boy, time sure flies by when working on this exciting pension stuff!

Yes. Take a look at IRS Notice 2016-16: https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&uact=8&ved=2ahUKEwjC5vPSlMXmAhVHZ80KHQiPBPsQFjAAegQIBRAC&url=https%3A%2F%2Fwww.irs.gov%2Fpub%2Firs-drop%2Fn-16-16.pdf&usg=AOvVaw0WCEJy-VYCn2e8f-i6FC6l

My understanding is that any funding deficiency reported on the SB automatically puts the plan on the “please audit me” list for the IRS to consider. Not all get audited, of course.

Yes. You can even do it for 2019 if the PS has a last day requirement and they execute the amendment before 12/30. edited to change 12/31 to 12/30

Give that man a trophy!

Maybe someone could volunteer to write up a plan where the safe harbor match is 221% of deferrals up to 6% of pay for only Group 1 (just happens to be the doctors) and the other group (the rest of the employees) only have a 3% safe harbor non-elective? Submit the document for an IRS determination letter and be sure to point out in the cover letter the dissimilar but aggregated safe harbor formulas. I was about to say "I can't imagine getting a favorable determination letter on that!", but then I actually imagined it before I could type that all out.

If they pass coverage without aggregating the two plans, yes, no problem. Otherwise, when you aggregate for coverage, the nondiscrimination testing is done as if it was one single plan - can you do what you're describing in one single plan? Meaning, could a single plan say that only some employees get safe harbor type #1 and another employee group gets a safe harbor type #2 plus a discretionary match?

Or, what if the employer signs the resolution today to terminate the plan as of 12/31/2019 and some employees quit tomorrow at 0% vested and a few partially vested employees terminate the next day and take their entire vested distribution a week or two later. Do any of them vest at 100%

If they are aggregated for coverage, they must be aggregated for nondiscrimination. You either cannot aggregate or you at least lose the safe harbor status if you do aggregate the plans. In either scenario, it is possible for an HCE in one plan to get a larger employer benefit than a NHCE in the other plan if they both defer the same percent of pay. My understanding is that at least blows the safe harbor. Try running the average benefits test for coverage, there are only about a zillion scenarios you could try. Otherwise, if they are separate lines of business, and all have the same plan year end, and have enough employees, perhaps put two employers in QSLOB #1 and one employer in QSLOB #2. Too late to do that for calendar year 2018 though. Perhaps amend under -11(g) to add participants and their corresponding QNECs/QMACs. Unless you’re trying to fix calendar year 2018, as it’s too late for that again.

They will need to have some procedure for processing/preparing the Form 1099-R for distributions. Although I have not used the Relius system that way, i was involved in the day-to-day administrative details many many years ago where we used company issued employee ID numbers for processing the client files each payroll (monthly). We had no more problems than any other plan (mainly rehires that inadvertently were given a new ID number instead of keeping the old one). About 8,000 full-time employees.

I agree. The general question being "what is the rule for changing from Prior Year to Current year"? You don't have to look back at the 5 prior years to switch now to current year testing.

You can always amend to use current year. The limitation applies when you try to amend from current year to prior year.

Limit Year DB $ Limit DB $ Limit (unrounded) Key Employee Key EE (unrounded) HCE Limit HCE Limit (unrounded) 2019 $225,000 $226,992 $180,000 $184,431 125,000 $ 128,208 2020 $230,000 $230,976 $185,000 $187,668 130,000 $ 130,464

Limit Year catch up catch up unrounded Deferral Limit def limit unrounded Comp Limit Comp Limit (unrounded) DC $ Limit DC$ Limit (Unrounded) DB $ Limit DB $ Limit (unrounded) Key Employee Key EE (unrounded) HCE Limit HCE Limit (unrounded) 2019 $ 6,000 6405.50 $19,000 $19,217 $280,000 $283,740 $56,000 $56,748 $225,000 $226,992 $180,000 $184,431 125,000 $ 128,208 2020 $ 6,500 6518.00 $19,500 $19,554 $285,000 $288,720 $57,000 $57,744 $230,000 $230,976 $185,000 $187,668 130,000 $ 130,464

There is no 12 month wait. A 401(k) plan is not a successor plan to a 403(b) plan.

August CPI-U released today. Based on Tom's spreadsheet, the numbers above are still good projections for 2020. They would only be off if we have extreme (unprecedented) high inflation or extreme (unprecedented) deflation for the rest of September.

I fully agree with the who cares part, but since the question came up (is the plan required to use the better table or not), thus the question.

A vested terminated participant has been taking RMDs the last few years from the qualified DC plan using the ULT table (the one that assumes a 10-year younger spouse). Suppose this year we are told that, all along, their spouse (and designated beneficiary) is actually 20 years younger than they are. Does that mean the joint table (with its larger divisor factors) is required to be used for determining the RMD? If so, was 20% mandatory withholding missed on the non-RMD portion of the amount distributed for the prior years because those amounts could have been rolled over?

No, I was unclear. I am saying to look at the plan document's section regarding how it can be amended (Article VIII (8)? in the BDP). See if it still allows the document practitioner to execute amendments on behalf of the employer - that's what I was talking about.

It may be a better practice to actually remove those provisions manually and to modify the Amendment section of the document so that it does not give authority to amend to a vol sub practitioner, because they really can’t do that in an IDP. However, those manual changes add time and costs. I have also seen attorneys do something very similar for church plans, and receive D Letters. In any case, if they have not applied for an IRS Determination Letter, I would suggest strongly that they do so.

Age 50 catch-up provisions can be written into a 457(b) plan only if the plan sponsor is a government. The special “last 3 years” catch-up provisions can be written into any 457(b) plan regardless of the type of plan sponsor. No gray area there.