Calavera

Per instruction page 12: (1) as the last day of the preceding plan year, at least 95% of a small pension plan’s assets were “qualifying plan assets". Note that 100% of the assets should be "Eligible Plan Assets"

Guru indeed. Then it means we are missing something. Otherwise it would be too easy to get out of 415 rules.

Affiliated employers rules are not referred to ASG. They are referred to affiliation rules described in 1.415(a)-1(f)(1), which is about controlled group. I would think that the fact of one entity being terminated long time ago will not take it out of controlled group situation under one common owner.

Would Affiliated employers rules apply in this case? See 1.415(f)-1(b). And in this case your old terminated plan will be considered a formerly affiliated plan. Also see 1.415(f)-1(c)(2): Where plan is not maintained by successor. With respect to an employer of a participant, a former entity that antedates the employer is a predecessor employer with respect to the participant if, under the facts and circumstances, the employer constitutes a continuation of all or a portion of the trade or business of the former entity. This will occur, for example, where formation of the employer constitutes a mere formal or technical change in the employment relationship and continuity otherwise exists in the substance and administration of the business operations of the former entity and the employer. Of course you may say that it is not a continuation of the trade or business, but it definitely the same administration of the business operations.

As long as he did not roll over the whole amount of his lump sum to an IRA, he should be fine. The portion of the lump sum would represent the 2015 RMD and is not allowed to be rolled over.

Maybe they have some kind of ASG but not CG.

When you create your own activity, under the "Time Period" elect option "Since my last visit"

Alternative solution could be the DOL lost earnings calculator located here: https://www.askebsa.dol.gov/VFCPCalculator/WebCalculator.aspx With the principal of $35,000, loss date of 11/1/2009, and recovery and payment date of 6/1/2014 it shows only $5,830 of missing interest.

Under "Unread Content" / "Time" there is an option "Since my last visit"

Permanency issue usually refers to plan termination, and not to plan freeze. As Effen said it is a facts and circumstances issue. So if you have a valid business reason for a plan freeze, it most likely will not raise any problems.

Generally on a 3-year 100% vesting setup, the first RMD should be due 1/1/2017

Mixing RMD, with 415, with multiple annuity starting dates (MASD) - it is so gray area. I am not an expert here. Need to follow plan document, 415 regs, MASD ideas, etc. I know there was a session on MASD at 2016 EA meeting. I am not aware of any clear guidance at this point.

Rules are in 1.401(a)(9)-6. 2 RMD are not eligible for rollover (one for 2016, and one for 2017). Account balance method still could be used for the full lump sum payment. The actual lump sum amount divided by the factor corresponding to his full age as of 12/31/2016 (27.4 for age 70, or 26.5 for age 71) will give you the amount not eligible for a rollover due to RMD for 2016 year. The same lump sum amount divided by the factor corresponding to his full age as of 12/31/2017 will give you the amount not eligible for rollover for 2017 year. Factors may be higher if spouse more than 10 years younger.

I agree that even with $0 compensation owner should be credited with year of service and participation. But I would not recommend $0 compensation. Since plan is overfunded, you will not be able to make a statement that owner needed to make this contribution in lieu of taking a reasonable salary as owner should. So I suggest: Step 1: Account for all deductions, and minimum required contributions to a DB plan. Step 2: Take a reasonable salary (consult accountant). Step 3: Contribute the rest. Additional option could be to open solo 401k plan and defer a portion of the salary.

No problem Effen. I wasn't thinking about multiple plans either, just tried to cover all the bases. Looks like it worked.

Dan said "applicable to all participants" and also "owners only". So I assume there are multiple owners and plan continue to exist for some time. It wasn't clear if plan termination will be somewhere in the future after the owner's retirement, or if all actions occur at the same time as part of the plan termination. So if owner plans to "retire" first, then 110% rule would still apply.

1. Need to be sure that plan is over 80% funded after amendment and before the owner's retirement assuming everybody retiring at age 55 with unreduced benefit. 2. Need to be sure that plan is over 110% funded after the owner's retirement. 3. Language of the amendment should mention that benefit are unreduced at early retirement, but still limited by 415. 4. When plan is terminated, remember to pay everybody out by giving present value of benefits deferred to 55. 5. Need to be sure that accrued benefit and lump sum payment are under 415 Alternatively, you can amend the lump sum definition to be greater of 417(e) rates and arbitrary low rate that is enough for your purposes and still keep lump sum payment under 415. Everything above will still apply.

Is it owner only plan?

Of course I didn't (but you knew it already didn't you). $2.888 at 68 is good.

Matching 62 and 65. Got $2.92 million at age 68 as $215,000 * 1.05^3 * (12.1996 / 11.2637) * 10.8318

Just be sure that is really not sufficient. Check the form of benefit. Check the 415 application. Check the time of commencement: was it Required Beginning Date (i.e. 4/1) or earlier. If it was RBD, note that it only requires to receive benefit accrued as of 12/31 prior to RBD.

Agree with chc93. In-service distribution should be allowed. Plan needs to be fully funded on a lump sum basis. Participant will take the in-service distribution as of 12/1/2016 of his full accrued benefit as a lump sum. The actual lump sum amount (not 1/1/16 PVAB) divided by the factor corresponding to his full age in 2016 (27.4 for age 70, or 26.5 for age 71) will give you the amount not eligible for a rollover due to RMD. Alternatively you can wait until 4/1/2017. That will give you time to properly fund and amend the plan, if needed. Two amounts not eligible for a rollover due to RMD (one for 2016 and one for 2017) will need to be calculated at that time.

Agree with jpod as well. Not sure if this situation requires VCP or self-correction is allowed. Plan needs to be amended to allow in-service distribution at least for these particular cases. Plan will owe him back payments with interest to I guess age 78 or so.

For PBGC purposes only count those who have any associated plan liability (i.e. after offset).

Tax lawyer 's comment about the disqualification may be related to a SEP that was opened with a Form 5305. Otherwise, as Lou S. mentioned above, it is only a deduction problem.