Calavera

Just adding for a clarification. If this partnership would have other employees, contributions toward the benefit of these other employees will be deducted on a partnership level, therefore reducing K-1s for partners. As mentioned above, the 2023 net earned compensation will be very low, so we assume that net earned compensations in prior years were high enough to support all 2023 calculations.

Is this a partnership or a corporation? If it is a corporation, K-1 has nothing to do with the contributions. If this is a partnership, K-1 should not be reduced by contributions.

Good point about predecessor employer.

Assuming Joe and Mary are not related, I don't think the offset would apply. Companies are not in a controlled group.

The owner will deduct his/her pension contribution on the Schedule 1 Form 1040 line 16.

I agree.

Unfortunately, this is not correct. Under the current regulations you need to satisfy the 415 limitations on benefits paid and on benefits accrued during the year.

Did participant terminate his employment in 2022 or 2023?

Long time ago I got the same answer from one of the IRS agents when I called them to clarify the word "maintain".

Just want to mention the extra layer of complexity. In absence of suspension of benefits, it is possible that based on the compensation history, this person's benefits crossed the 415 limitation long time ago, and therefore should have started at that time.

For 5500EZ, SB is not attached but should be provided to the client. Does "no SB signed" mean client doesn't have it, or does it mean the prior actuary never did it?

You certainly should check the plan document. The document may specify that after 1 year break-in-service, the eligibility computation period switches back to 12 months from the rehire date.

This may be helpful https://www.asppa.org/sites/asppa.org/files/PDFs/GAC/ASAPs/04-07.pdf https://ferenczylaw.com/article-the-elusive-irc-section-410b6-transition-rule/

Cash balance plans are defined benefit plans. They have to provide a QJSA to a surviving spouse. Any other provisions are optional. I personally haven't seen a cash balance plan with limitations to death benefits. I have seen "standard" defined benefit plans where death benefits were payable to the spouse only, and also where death benefits were payable only to the spouse or to the designated beneficiary.

Or the document may say: no spouse and no beneficiary form - no benefits

It looks like you are using the end of the year valuation date. If the valuation date was not changed in any of the four preceding years, you can change it to the first day of the Plan Year, i.e. 1/1/2022. If it's not enough to get your minimum contribution to $0, see Nate S' comment above.

1. If plan was frozen in 2017, you would use the 2017 limit of $215,000. 2. If the freeze amendment specifically allowed the future $415 limit increases, you will use the current $415 limit. 3. Based on the plan document definition of years of benefit service and years of participation, owner may have 4 years of participation for $415 proration purposes. If none of this helps much, just unfreeze the plan.

I am not sure it matters how plan got frozen. So this person accrued benefits for 5 years, and then plan got frozen. Wouldn't frozen plan satisfy 401(a)(26) automatically?

What was the effective date of the plan?

Not really. Annuity multiplied by a ratio of immediate to deferred factor will give me an actuarially increased annuity which will be compared to an accrued benefit. The greater of amount will be the starting point for the next year comparison.

I would use the ratio of an immediate factor to a deferred factor.

If an employee worked 83.33 hours in April of 2022, the entry date maybe October 1, 2022.

I think you will find these useful:

Your first computation period is 3/1/22-2/28/23. Since an employee worked only 250 hours in this period (<500 hours), an employee may incur a one-year break in service for the eligibility purposes. You need to check your plan document on how the year of service for the eligibility purposes, and the one-year break in service for the eligibility purposes are defined, and if this break in service reset the eligibility computation period to the 12 months from rehire date.

Looks like your initial computation period is from March 1, 2022 through February 28, 2023.