Calavera

Sorry, should have mentioned that this is a calendar year plan and there are no any weird gotcha provisions. Assigning will be proposed by the actuary to the plan sponsor over email in order to save some PBGC premiums, and the plan sponsor will reply agreeing to the split. Having two separate checks certainly will not have any issues. Concern was simply raised due to it being one contribution instead of two separate contributions and split would not be known until the actuary would do all necessary calculations. Thank you all.

A $1,000,000 contribution was made to a db plan on 7/1/2022. Are there any problems assigning a portion of this contribution to the 2021 plan year, i.e. $700,000 will be shown on the 2021 Schedule SB, and the remaining $300,000 will be shown on the 2022 Schedule SB?

Take a look at Rev. Proc. 2021-30. I recall there was something about overpayments under $250.

Since your ex didn't commence his benefits yet, if you start your benefits before his age 65, your full share will be reduced due to an early commencement. His retirement plan administrator should provide you, upon your request, the calculated amounts of your benefits under scenarios of retiring now and retiring 3 years from now (at his age 65), so you can see what is the reduction, and then decide if you would want to take it.

Just a side note - If in-service distribution is allowed, participant may take a full distribution of the benefits as a lump sum and use an account method for calculating RMD.

I would actually want to be covered by PBGC. For a really small PBGC premium payment, you get full 401k/PS/CB deduction.

Offset is applicable post MRD as long as plan has the language for the "greater of" calculations. Here is excerpt from 1.401(a)(9)-6 Q/A-9: "The actuarial increase required under section 401(a)(9)(C)(iii) for the period described in A-7 of this section is generally the same as, and not in addition to, the actuarial increase required for the same period under section 411 to reflect any delay in the payment of retirement benefits after normal retirement age." Here is also excerpt from the 2007-17 Gray Book: The phrase “any additional benefits accrued after that date” are those required under the rules of IRC §411(b)(1)(H), which provide that an accrual for additional service during a year may be offset by an actuarial increase for delayed retirement."

1. In my practice (following plan document of course) when plan is ongoing and someone started in-service distribution, we would recalculate benefits each 1/1 to see if the value of accrual is over the value of benefits received. If yes, benefits will increase for the difference. If no, benefits will stay the same. 2. It is also possible for a participant to reach the 415 salary limit.

If this CPA really thinks that it cannot be deducted for 2021, your client may need another CPA.

As Effen said, you will get multiple answers. One of them is LS is recalculated as of 3/1 and you add 2 monthly payments with interest for 1/1 and 2/1.

See if you can justify lower credited interest rate, or retiring at later ages, or both.

Not sure what you meant by an annuity option, so here what I have seen. Participant elects lump sum, but you pay only what you can (i.e. annual benefit) and bring the remaining lump sum amount up 1 year with interest. At any time you can pass 110% test, you pay the remaining lump sum. And just a reminder, 110% is measured after the distribution. Liability is calculated without this person. Asset is calculated subtracting the payment to this person.

Is plan underfunded, overfunded, or underfunded with future contribution to make it whole? In my experience, it is always a bad idea, especially if you need to distribute the exact amount at 415 limit. Value of funds leaving the plan almost never equal the value of funds received by IRA.

I think you do have control group issues. The way I understand it, you have 3 controlled groups, since the exception to spousal attribution will not apply to Company B: 1. B with A and C 2. A with B 3. C with B For Company C to have a pension plan, Joe has to be in the plan.

Just curious. If a plan has an annual cap on ICR of 8.5% and cumulative 0% (i.e. capital preservation), what rate you would consider a "reasonable" rate for a meaningful benefit minimum participation testing?

Don't know much about market ROR ICR, so just thinking out loud. Do you have to test it on actual ROR, or on some arbitrary long term ROR, since person is not really retiring? Can you say that using 3 or 4% for the meaningful benefit testing is acceptable (no matter what the actual ROR in a particular year?

Unfortunately not just small CB plans. Which brings whole different set of issues that plan sponsors are thinking about CB plans in terms of 401k plan, that in order to allocate something they actually need to contribute that something. Or because they already withheld something from partners, now they have to contribute exactly what they withheld, not more, not less.

Am I only one who is confused by this question? The plan sponsor have to make the minimum required contribution, and may make more than the minimum required contribution. The plan sponsor doesn't really makes deposits on anyone's behalf.

Only 1, 2, and 5. Adult son owns 100% of Company 4 and it is not attributable to parents.

Person terminated in 2021 and his required distribution date is 4/1/2022. The form of benefit taken is a lump sum. The amounts not eligible for a rollover should be calculated for 2 years, 2021 and 2022. Generally to calculate the amount of RMD that is not eligible for rollover under the account method, you would divide the lump sum amount by the distribution period taken from the Uniform Life Table. The two distribution periods will correspond to the age of a participant as of 12/31/2021 and as of 12/31/2022. Effective 1/1/2022 the IRS amended the Uniform Life Table with longer distribution periods, and therefore smaller RMD amounts. So question is: Will you use both distribution periods from the amended table, or will you use the distribution period from the old table when calculating RMD amount associated with 2021, and the distribution period from the new table when calculating RMD amount associated with 2022?

I am with pmacduff on this one: Yes to PS allocation, and Yes on active status.

Not saying it makes it right, but this was exactly my point. If I need to have anything for potential arguments, I would use signed SB as "certification", it has all information and it was delivered to the plan sponsor by their actuary. Taking into consideration the recent ARPA guidance where signed and filed Schedule SB serves as the deemed election by plan sponsor, it should work.

Does client have copies of Schedules SB for all years?

If accrued benefits were not frozen at plan termination date - $245,000. If accrued benefits were frozen at plan termination date, it depends on the language of the freeze amendment: no special language - $230,000; allowing increase in 415 dollar limit post benefit freeze - $245,000.

In this case the plan year is still the calendar year. The plan year-end date remains the same and all filing and contribution due dates remain unchanged. The valuation date is still 12/31, but the minimum funding requirements are calculated as if it is a short plan year, prorating the normal cost and amortizations. The valuation date could be changed to the beginning of the year, and it is a method change ( rp-17-56.pdf (irs.gov) )