John Feldt ERPA CPC QPA

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.

My understanding from the EZ instruction alone is that the determination of the type of 5500 to file is based on the eligible participants in the plan you are filing. So if that plan is written to cover only the 100% owner (and spouse), or only partners (and spouses) in a partnership, then you aggregate the balance with any other owner-only plan to determine the 5500-EZ threshold and you still file 5500-EZ regardless of being permissively aggregated for coverage with any plans covered by ERISA.

Larry is not wrong.

Have them re-read Treasury Regulation section 1.401(a)(4)-4(d)(4)? (4)Permissive aggregation of certain benefits, rights, or features- (i)General rule. An optional form of benefit, ancillary benefit, or other right or feature may be aggregated with another optional form of benefit, ancillary benefit, or other right or feature, respectively, and the two may be treated as a single optional form of benefit, ancillary benefit, or other right or feature, if both of the following requirementsare satisfied: (A) One of the two optional forms of benefit, ancillary benefit, or other rights or features must in all cases be of inherently equal or greater value than the other. For this purpose, one benefit, right, or feature is of inherently equal or greater value than another benefit, right, or feature only if, at any time and under any conditions, it is impossible for any employee to receive a smaller amount or a less valuable right under the first benefit, right, or feature than under the second benefit, right, or feature. (B) The optional form of benefit, ancillary benefit, or other right or feature of inherently equal or greater value must separately satisfy paragraphs (b) and (c) of this section (without regard to this paragraph (d)(4)). (ii)Aggregation may be applied more than once. The aggregationrule in this paragraph (d)(4) may be applied more than once.

I personally like the Relius (PPD version) for DC plans, especially because of some of the flexibility that is available in the BPD (particularly regarding irregular compensation and for discretionary matching - they've gotten a lot of plans out of some trouble there with that). ftwilliam has additional flexibility in some areas, but less flexibility in other areas. Hard to compare. in my experience, FIS has provided good solid document support. ftwilliam has greatly improved in that area. I have used the FIS (Corbel) cash balance document in the past. For their PPA restatement, I did not see a place to specifically identify the stability period and the lookback month(s) for any cash balance plan that defines their interest crediting rate as tied to a variable rate, such as the 30-year treasury rate. I see it for the actuarial equivalence/417 definition, but not for defining a non-fixed rate crediting rate. For example, it asks you to select the crediting rate, such as the lesser of the 30-year treasury or 5%, but I do not see where it asks you to define how the 30-year treasury is determined or for how long that rate stays in place. That's a really big deal for a cash balance plan. That said, I am sure this has been pointed out to them and they probably already have a custom language section in their system already to handle with a manual work-around. I do like that they give you a nice checkbox to apply the 1000 hours requirement for accruals only to HCEs (to help with 401a26 for young terminees that leave with few hours). I use the ftwilliam document now for cash balance due to a change in jobs a few years back. There may be some things in their document that I'd like differently, but it does allow you to define the stability period and lookback period for a plan that does not use a fixed rate as its crediting rate. ftwilliam also has a wonderful time-saving checkbox to say: shall we provide a separate SPD for each cash balance rate group? or just one SPD with everyone's formulas in it?

FIS (SunGard) (Relius) (Corbel) (PPD) (etc.)

Great to hear from the great Derrin Watson! As you start ding the testing, if you see some of them failing coverage, keep in mind that you might be able to aggregate some plans together. For example, when we did this for four large plans and one small plan for five employers all owned 99% by a foreign company, two of the plans were current-year tested and could be aggregated (that helped us pass), two were prior-year tested and could be aggregated but did not need to be aggregated to pass, and the last small plan was safe harbor and had to pass by itself. That last plan just squeaked by using the average benefits test for coverage and by applying the OEE rule and some other uncommon testing options that are available. Of course, it's more complex than just that since you have up to three coverage tests for each plan as Derrin mentioned, but just keep aggregation in mind when you start getting these going (after they've engaged you, of course).

Ned Ryerson (Ground Hog Day) must be the agent.

My understanding is that amendment, as you described, would end the transition period. If your client is a serial acquirer, this is certainly one on the problems they face if they are relying on using the transition period.

Sure, you can amend to change the trustees and to change the plan name, things of that nature.

My understanding is that only if it’s under $200 that you can just give them the check and the 402(f) notice with no advance period or election.

Operational failure. After reviewing the document and the amounts involved, if it’s really 15 years, negotiating a solution under VCP would probably be the recommendation.

That’s right, cash for minimum funding. Above that you may have other options, but you really never should do it in a small plan. https://www.chicagotribune.com/news/ct-xpm-1994-05-11-9405120061-story,amp.html

If they ask the Treasury Secretary, they may be able to get it allowed, however that is very expensive to try and very unlikely to get approved. Was GM able to do something like that?