Calavera

If a 3-year average W2 compensations was established already, you may not need any current compensation for a defined benefit plan. However, you may need a reasonable compensation paid for services, but this is the question to an accountant/tax advisor.

The goal of a QDRO in a defined benefit plan is to provide an Alternate Payee (AP) a portion of participant's benefit for AP's life. In a case of a Shared Interest QDRO, an Alternate Payee is assigned a portion of participant's benefit over participant's life. To ensure that the Alternate Payee will actually be receiving some benefits until he/she dies, the Shared Interest QDRO is forcing a participant to elect a J&S benefit, so upon participant's death, the shared portion payable to AP will stop, and J&S portion will start. However, this requirement applies only, and I am using words from your QDRO, "to the extent of the calculated interest". Here is a simple example: The total benefit is $1,000 per month under 50% J&S. Marital portion of this benefit is $600 per month. AP is assigned 50% of the marital portion under the shared interest QDRO. Essentially it means that you are "receiving" $600 and "sharing" it with your ex 50/50 (each receives $300). When you die, you stopped receiving $600 and there is nothing to share anymore. The 50% J&S provision kicks in where AP receives 50% of the total benefit of $600, i.e. AP continues to receive the same $300, she was receiving before you died. Furthermore, the remaining $400 are not part of the marital portion, and you should be able to elect any other beneficiary for this benefit. However, if your marital portion is 100% of your total benefits, I think there is nothing you can do to change it, unless you will be able to completely nullify the existent Shared Interest QDRO and create new Separate Interest QDRO. Your pension department should split your total benefit to "marital" benefit and "non-marital" benefit in regard to your ex and treat these separately. The "marital" benefit will be subject to the QDRO, and "non-marital" benefit will be subject to your election.

It sounds like this is a defined benefit plan, it was a Shared Interest QDRO, and neither you nor your ex started receiving benefits yet. If I am correct in these three assumptions, you cannot change the beneficiary for the portion of benefits subject to the QDRO, unless it is possible somehow to nullify the old QDRO and create a new Separate Interest QDRO upon agreement between you and your ex. However, if only portion of your benefits (<100%) were subject to a Shared Interest QDRO, you can elect your current spouse to be a beneficiary for the remaining benefits.

First you take into consideration whether you have a short plan year or a 12 month plan year. Then you look at the benefit formula and employment/participation history. See CuseFan's comments above. If you have a short plan year or if you have a benefit formula that using monthly compensations, you prorate. If you have a full plan year, and you have a benefit formula that is not using monthly compensation, you don't prorate.

I believe if your plan's benefit formula using 36 months and not 3 years, you have to apply a monthly limit to a month of compensation, essentially applying the proration.

Elapsed time means elapsed time. This person will have 1 year and 7 months of vesting service.

Scan 2023 signed SB with all 2023 attachments in one pdf file and attach it as "Other".

Usually having just PS/401k plan at that age is easier and comparable if the current compensation is high enough due to very low 415 benefits at the age of retirement. However, from the legal plan setting up perspective I would recommend NRA 62, ERA 55, benefits unreduced at ERA, expected retirement age for valuation and contribution purposes is whatever clients tell you.

Just file the amended 5500 ASAP attaching the auditor's report. From Form 5500 instruction – “If the required IQPA’s report is not attached to the Form 5500, the filing is subject to rejection as incomplete and penalties may be assessed.“ From DOL EFAST FAQ – “Q25: Will EFAST2 receive my filing if I do not attach the IQPA report to my Form 5500 annual return/report? EFAST2 will receive your filing, but the filing is incomplete without the required IQPA report. An incomplete filing may be subject to further review, correspondence, rejection, and civil penalties. Please note Schedule H, line 3 specifically asks for information regarding the plan’s IQPA report. If you do not submit the required IQPA report, you must still correctly answer these questions. If you have to file Form 5500 without the required IQPA report, correct that error as soon as possible.”

I think for the Line 14 (FTAP) the PFB used to offset MRC should not have any impact. The 5500 Schedule SB instruction doesn't mention any adjustments, and it seems pretty clear. However, for the Line 15 (AFTAP), I would take it into consideration.

The terms “shared interest” and “separate interest” are used a lot in DROs for splitting benefits earned under defined benefit plans but could also apply to defined contribution plans as well. Attorney should be able to help you to answer questions and to draft a DRO. You can find more information here: Qualified Domestic Relations Orders and PBGC | Pension Benefit Guaranty Corporation QDROs The Division of Retirement Benefits Through Qualified Domestic Relations Orders 2020 (dol.gov) FAQs about Qualified Domestic Relations Orders (dol.gov) FAQs Drafting Qualified Domestic Relations Orders (dol.gov)

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.