Calavera

The actual max deduction under the rules would be $33,539, but in this case your client will not be able to deduct his full medical insurance of $14,400 (see 1040 instruction for line 29). What CPA is trying to say is, "please do not make $9,539 of employer contribution, and if a client made it during 2018 year, please do not count and deduct whole amount."

I wish. See below (emphasis mine) Code D - Use this code for a participant previously reported under the plan number shown on this form who is no longer entitled to those deferred vested benefits. This includes a participant who has begun receiving benefits, has received a lump-sum payout, or has been transferred to another plan (for example, in the case of a plan termination). Also complete columns (b) and (c). Participants should not be reported under Code D merely because they return to the service of the plan sponsor.

Do not forget to report all terminated people reported previously, with code D under plan A.

No. See following for more details: https://benefitslink.com/boards/index.php?/topic/53060-top-25-lump-sum-restrictions/ https://benefitslink.com/boards/index.php?/topic/44667-restricted-distribution-eligible-for-rollover/ https://www.irs.gov/pub/irs-wd/1031042.pdf

I believe plan owes him EE contribution with interest only, unless it was already paid out in 2008.

Love it.

There was a good article also mentioning the same PLR. http://www.employeebenefitsupdate.com/benefits-law-update/2015/2/12/when-a-termination-is-not-a-termination.html

#1 - After reading through some materials related to the Heinz case, I am still not sure if it is not allowable. All examples are pointed out to employees currently eligible for early subsidies or late retirement increases, and not to those who are not eligible yet. #2 - I agree that you can not amend the plan, but maybe if you already have this provision in the plan you may start implementing it. I let attorneys to decide on both cases.

Some other options in addition to David's suggestion of amending the plan for in-service distribution at NRD: 1. Client can implement Suspension of Benefit for active employees who didn't reach NRD yet, and stop actuarial increases for them if they continue to work past NRD (subject to RMD rules). 2. Client can implement Suspension of Benefit for active employees who are over NRD, and stop actuarial increases for them after suspension is provided (subject to RMD rules). 3. Client can amend the plan for RASD and provide two options: a) current retirement and NRD retirement. Consult plan's ERISA counsel for more information.

Thanks Dave for that awesome reference. Jpod, keep in mind that plan document should have the appropriate language You will need to apply for a disallowance

1. Not permissible 2. If the interest credit rate is a variable rate, the rate of interest used to determine accrued benefits under the plan shall be equal to the average of the rates of interest used under the plan during the 5-year period ending on the termination date

From http://www.ccactuaries.org/archives/meeting-materials Released annually at the Enrolled Actuaries Meeting between 1990 and 2015, the "Gray Book" was an essential compendium of questions from actuaries and answers from the IRS. The Super Gray Book consolidates these materials on a USB with searchable indices for the each set. Note: Due to reallocation of resources at the IRS & Treasury, competing priorities, and government concerns surrounding reliance upon responses in the Gray Book, the Gray Book will no longer be produced.

For what it worth from Gray Book 2004-42: Treas. Reg. §1.401(a)(9)-2, A-2(a) provides that except in the case of a 5%-owner, the “required beginning date” is April 1 of the calendar year following the later of the calendar year in which the employee attains age 70-1/2 or the calendar year in which the employee retires from employment with the employer maintaining the plan. If December 31, 2003 is the employee’s last day at work, and the last day for which he is paid or entitled to payment of wages, is that the date of “retirement”. Or is January 1, 2004, the first day he is not employed, the retirement date? When is the employee’s required beginning date? RESPONSE “Retirement” is the last day worked, not the definition of retirement date in the plan. What date is an employee’s last day worked is a facts and circumstances determination. The facts and circumstances are based on the employer’s practice concerning the last day an individual is considered an employee.

Bravo!

Assuming HJ is the S-corp. owner - It most likely will be a combination of a qualified defined benefit plan with 401k/Profit Sharing plan. Talk to your accountant and/or google for a small actuarial businesses/consultants for a proper advice.

Agree with Tom and Larry. The testing age is 65 (latest of 2 uniform NRAs). Generally, the best way forward is to amend DC plan NRA to 62.

Generally actuaries will not deal directly with participants (unless it is a one person business). I suggest to contact the company sponsoring the plan (HR, benefit administrator, etc.). Then company will request a recalculation from their actuary.

1. You can try requesting plan sponsor to recalculate RMD amount based on the account method. 2. I do not think either method is considered to be a default method. 3. A lot of TPAs are using annuity method because they think it is easier, which is not true. 4. It appears your $4,115 not eligible for rollover out of $105,358 corresponds to the following: spouse terminated employment during 2018 spouse will commence his/her benefits in 2018 spouse is 72 years old as of 12/31/2018 if any of the above bullet points are not correct, the $4,115 needs to be recalculated

We should not be a "Trad'l DB guy" or a "CB guy". We should do what's best for a client. Just let it go Mike

Aha, takeover plan. - Sorry for a firing comment Well, then you are right on target. You have 2 options: 1. Opting-out of using lookback rule and fund 2017 year so your 2018 assets is higher reducing 2018 premium. I agree it is not practical because you will be stuck with estimated/amended filing (see Estimated Premium Funding Target section of the PBGC instruction). 2. Not opting-out, paying ~15k premium for 2018. Still funding 2017 year so your 2018 assets is higher to reduce 2019 premium. Additional ideas are: a) changing the retirement age assumptions (if possible); b) changing AVA to MVA or MVA to AVA (whatever is applicable in your case) if it is beneficial c) introducing termination assumptions along with immediate distribution upon termination if it is beneficial

Looks like your TPA gave you excuse to get him fired for not understanding the situation and/or not providing proper advices. Now regarding the actual situation: 1. The first year filing was 2017. 2. Since you mention that the coverage was triggered in the middle of 2017, the filing for the 2017 year is already late. 3. For the 2017 year plan will not have any variable premium due to an exemption. 4. For the 2017 year the flat premium is eligible for proration so your total premium should be under $1,000 5. You most likely will get penalized for the late 2017 filing. 6. If you intend to use a lookback rule, it appears that your estimated $15k premium will be for the 2018 year. 7. If you will opt out of using a lookback rule, you may eliminate the variable premium by making contributions for the 2017 plan year. However, due to the end of year valuation, you will need to file estimated PBGC filing and amend it later. I suggest carefully read the PBGC premium instruction to understand it better that could be found on pbgc.gov.

Not sure, but I think it depends on where he will file his taxes for this income.

Got it. Thanks Mike.

Not sure how amending the actuarial equivalent in the plan document will modify 415 maximum. Usually this is not a case. More information needed about benefits, ages of the owners, and the current asset value.

This is the way to go. Also note that 2 years of RMD are not eligible for rollover (he should have retired on 1/1/2018).