BG5150

In any case, I would get a written statement from an attorney that this isn't a prohibited transaction before you go ahead and do it.

Plan doc excludes rollovers when determining the cashout balance. Participant has $550 PS (100% vested) and $45,000 Rollover. Because R/O is excluded, this participant is a candidate to be cashed out. Does the trustee just cash out the entire account and withhold $9,100? Or do they roll over the balance to an IRA? (The plan's threshold for IRA rollovers is $1,000)

It would be a controlled group, so the 415 limit applies across both plans.

If you have no HCE eligible for deferral but not for SH, then you pass the ADP test for that group automatically.

I don't see how the ADP test is failing (so badly). You would run the ADP test for the people who are not fully covered by the SH, you don't have to run an ADP test for the whole plan. The people who defer and cannot get a SH will almost be eligible to be tested separately. And unless you have a bunch of newly-hired HCE owners or family, that otherwise excludable group will pass. If you have an owner HCE, then hopefully it won't fail that badly.

I disagree, Bill. It says 1,000 hours in one Year Eligibility Service Period. That period likely ends on the 1 year anniversary (or really the day before) of employment. So, for both of the examples, the one Year period ends in 2020.

I would contact the attorney who drafted the document.

I'm good on the correction, I think. Just wanted to make sure I didn't miss anything with my meanderings through EPCRS, and if there was really anything in 6.06(3) that I needed instead of 6.06(4).

He will know his 2021 RMD on January 1, 2021 because the RMD is based on the 12/31/2020 balance. He can ask T Rowe Price for an RMD in the amount of (2021 RMD - total amount monthly payments).

DC plan paid someone out at 100% vested when they should have been only 20%. About an $8,000 difference. So start in EPCRS, Appendix B, Section 2, part .05 Correction of Other Overpayment Failures section 2.04(2)(a)(iii) But, 6.06(3) is Correction of Overpayment (defined benefit plans). Shouldn't I be using 6.06(4), Correction of Overpayment (defined contribution plans and 403(b) Plans.)?

It might not be a 415 failure. Just annual additions for 2020. It may curtail the 2020 employer contribution if there are those at or near the 415 limit.

If the contribution goes in now, it will be considered 415 annual additions for 2020.

Is the auditor insisting the sponsor pay the excise taxes, too?

I know I'm fighting a losing battle. I like these little mental exercises from time to time.

Forgot about the tresury regs.

Come to think of it, I just looked up 416. The minimum benefit section does not specifically mention employment on the last day of the year. Where does it allow for those not employed at EOY to be excluded from the TH minimum? The section further goes on to discuss when the TH minimum is less than 3% and aggregation groups and the like. I see nothing about employment requirements. Is it in another section of the code? Source: https://www.law.cornell.edu/uscode/text/26/416

I think the 11-g in this case is silly. They are following the TH rules. They aren't making a discretionary contributions, nor did they choose to exclude the participants not employed at EOY. Unlike a last day and/or hour requirement, or excluding a class of employees for an employer contribution such as match or PS, the exclusions for TH are codified.

Let's assume the terminated folks all worked 750 hours. Would I have to do an 11-g amendment to give 1 NHCE some sort of allocation? I forgot to put in my question, that there is no Profit Sharing declared for the year. It's just going to be the TH contribution this year. And say ABT fails, too. (Lawyer's office and all the attorneys are younger than the NHCE support staff.) BTW: This is an academic exercise, not a real-world situation at the moment.

I have a question: Is the TH contribution subject to coverage testing? What happens in this situation: 10 HCE including 1 Key. All employed on last day of the year. 10 NHCE/non-Key, 6 employed at EOY. So, the TH will go to all the HCE except the lone Key and all the NHCE at EOY. So coverage is 67% [ (6/10) / (9/10) ] Note: there is no Profit Sharing declared for the year. It's just going to be the TH contribution this year.

Did you mean KEYs? The language in the OP is what we use in all of our documents that we underwrite. Too, we add a PS component, usually a new comparability scheme. This way, the non-Keys get their piece and if the ER wants, they can get the Key EEs the same allocation via a PS. (We also exclude HCE from the 3% Safe Harbor to give the ER flexibility in spending.)

This is what I was told by our doc provider: The Sponsor Level SECURE Act and Expanded Hardship Amendment Plan Level Hardship Amendment if any of the optional provisions regarding hardship amendments were selected. A CARES Act amendment, if any of the CARES Act enhanced provisions were offered to participants. We have not created a CARES Act amendment but if any of your terminating plans did offer the participants any of these options, I suggest having your client sign the administrative checklist that can be found on our website and mention in the resolution that the checklist is a good faith amendment to the plan.

Make sure you check off the Penalty Relief box in Part I D. And follow all the instructions: Don't forget Form 14704! Late Filer Penalty Relief Program The IRS Late Filer Penalty Relief Program for late annual reporting for non-Title I retirement plans (one-participant plans and certain foreign plans) provides administrative relief to plan administrators and plan sponsors from the penalties otherwise applicable under sections 6652(e) and 6692 for failing to timely comply with the annual reporting requirements imposed under sections 6047(e), 6058, and 6059. Rev. Proc. 2015-32 provides, in general, that an applicant under the program must print in red letters in the top margin above the Form 5500-EZ’s title on the first page of the return: “Delinquent Return Submitted under Rev. Proc. 2015-32, Eligible for Penalty Relief.” A filer who marks box D and submits the delinquent 2019 Form 5500-EZ under the program is not required to also mark the return as described in Rev. Proc. 2015-32. The return must still be marked as described in Rev. Proc. 2015-32 for delinquent returns for years earlier than 2019 or if box D is not marked on the 2019 return. Please be aware that each submission under the program must include a completed paper copy of Form 14704 attached to the front of the oldest delinquent return in the submission. Form 14704 can be found at www.irs.gov/pub/irs-pdf/f14704.pdf. See Rev. Proc. 2015-32, 2015-24 I.R.B. 1063, for more information.

Do banks loan their own money? Or is it the depositor's money? (That's why banks pay people interest--the bank uses the customers' funds to lend out. The interest on the loans is paid to the bank, which passes on a lower rate to the depositors.)

So what amendments need to be adopted if a plan is terminating these days (other than the plan term amendment, obviously)?

UPDATE: Plan doc was wrong. Entity is a P.C. and the owner does get paid on a W2! Company changed structure a few years ago and no one thought to update the plan doc. So, I guess this discussion doesn't apply to me any more. However, I think we had a good, robust discussion.