BG5150

Say I have 5 companies that all adopted a plan: A, B, C, D, E, F The CG's are: A B & C are one CG D & E are another A B & D also C & E too F is not part of any CG or ASG, so I have a MEP. Do I need to do 5 separate tests?

I never saw that the spouse had to consent to a contingent beneficiary before. is that common? Plus, it doesn't make sense. If the spouse is the primary beneficiary, then the only time the benefit goes to the contingent bene is if the spouse is deceased. Why would you need spousal consent for in a case where the spouse has no claim to the benefit (he/she is dead!)?

I really dislike bad actors in our industry. Seems like every couple years or so some guy who thinks he's outsmarted the system starts sending these letters trying to scare up business.

If they aren't insurance, I would start with the branch manager. Mention you think the material is first incorrect and second, and more important, misleading. Threaten to take the issue to their state's securities regulator, or maybe even the SEC. Or, you can PM me a copy of the letter and I'll do it. I love stirring up crap for creeps like this.

My guess is that a lot of the executives are participating and not many of the rank and file. With a generous SH match, it allows the company to a) give a bigger benefit to the execs without having to do a non-elective contribution and b) have the top heavy covered.

To the first bullet, that just usually goes on the SAR. But the SAR is not needed for EZ plans, right? To the second: are EZ plans subject to the vesting standards of ERISA 203? From the 2021 8955-SSA instructions: "Sponsors and administrators of government, church, and other plans that are not subject to the vesting standards of section 203 of ERISA (including plans that cover only owners and their spouses or cover only partners and their spouses) may elect to file Form 8955-SSA voluntarily." (emphasis mine) So, does this mean they MAY but don't HAVE to file one? (And why would you want to file one voluntarily? And you don't even have to give all the info: "If such a plan administrator so elects [to file voluntarily], the plan administrator is encouraged to provide as much information as possible, but no specific requirements are imposed."

I see someone beat me to it.

Why. You guys get the whole MONTH of October! (for 20 years, now.) https://nationaldaycalendar.com/employee-ownership-month-october/ https://esopassociation.org/employee-ownership-month#:~:text=October is Employee Ownership Month,to help you celebrate EOM.

You should speak to your accountant about that.

I think that's right. It does not match on deferrals over 6%, and I think that's the only cap.

Secondary question: Which takes precedence: a will or a properly executed beneficiary designation for the retirement plan? Say I name my brother beneficiary of my plan when I first start. Later in life, I make out my will and designate the benefit to go to my sister. Who gets the goods?

Participant passed away, so no new designation is possible. Our staff attorney opined that only the primary beneficiary election was revoked and everyone moves up a level.

Directly from the basic plan document: (f) Divorce revokes spousal Beneficiary designation. Notwithstanding anything in this Section to the contrary, unless otherwise elected in Appendix A to the Adoption Agreement (Special Effective Dates and Other Permitted Elections), if a Participant has designated the Spouse as a Beneficiary, then a divorce decree that relates to such Spouse shall revoke the Participant's designation of the Spouse as a Beneficiary unless the decree or a "qualified domestic relations order" (within the meaning of Code §414(p)) provides otherwise or a subsequent Beneficiary designation is made. Side note: there are no special instructions in Appendix A. So, the ex-spouse is no longer the beneficiary, but does that mean everyone else (the contingent beneficiaries) move up a level (secondary to primary, tertiary to secondary, etc)? Or is the entire designation scratched?

Me, too, Bri. That's my question. JUST the beneficiary, or the whole shebang. I have the question to my documents team now.

Participant indicates spouse is primary beneficiary and the contingent beneficiary is his nephew. participant then gets divorced so spouse is no longer primary beneficiary. Does the nephew now become the primary beneficiary until he (the participant) remarries? The bene form says the spouse is primary and if not living at the time of participants death, the the named contingent benes will get the benefit. But the ex-spouse is still living... Does the whole thing get blown up due to divorce, and new paperwork would need to be filled out or the plan's hierarchy will take over?

I'm not a big fan of this, as it could cause census nightmares. Chances are you are getting a census from each location separately, and you'd have to remember these X participants should be in the other plan.

Maybe send this to an ERISA attorney?

Has nothing to do with Safe Harbor or not. The voluntary after-tax (VAT )will be in the ACP test regardless. Like chc93 said, I've only seen it work in large plans, and then, only if there are a bunch of well-paid NHCE who are near the HCE comp limit, or in plans that have a ton of HCE but a bunch are NCHE b/c they use the top paid group. These days, I usually only see it in a owner only plan where the ACP test does not apply since there are no NHCE. The VAT used to be a great way to get more money into a retirement plan, especially when the limits were so low, like under $10,000. Now, with higher amounts allowed, and with the allowance of Roth Deferrals, participants and sponsors alike are bypassing the VAT.

This is a good point.

But will have to make up any withholding if he wants it as a tax-neutral transaction.

I don't see why this would be a problem. Same calendar year, same plan year, probably same tax year (unless sponsors tax year ends 5/31. As long as the contribution was made for the right amount and no one was left out. Like someone said above. At the time of deposit it wasn't a plan account, but now it IS a plan account. Could you MAYBE say that the value of the account on the day they executed the document was truly the contribution amount? Sure. But I doubt any IRS auditor would get upset at this, unless somehow the sponsor was trying to get some sort of unfair tax break.

What type of in-kind asset? Do they want to transfer over actual stocks instead of selling and re-purchasing them?

Can you give a QNEC to just one person?

The LTPT rules only allow for them to defer. has nothing to do with eligibility for match,

Datair has a similar option. Not sure about Relius of FTW and I'm too lazy to look. lol