BG5150

We have a client that has a Solo-K (Larry, don't yell at me, I'm using the term for clarity.) No contributions since 2013, the last year an EZ was filed. (under 250k since then). We find out today that he retired and took his money out in February. Do I really need to terminate the plan? What's the harm in leaving it "open"? He will file a final EZ.

My go-to description of my job in social situations: I work with 401k plans. They have a lot of rules and regulations they have to follow, and we help make sure they do that. Because if I only left it at "I work with 401k plans" they think I'm an investment guy.

Side note: does anyone know if the idea of large/small plan threshold being determined by account balances has any traction? I remember reading about it a year or two ago.

I wouldn't say to clients that documents are "legal" work, as that my imply that lawyers are involved.

Retirement Plan Consultant. We take care of all that pesky compliance stuff with the IRS and DOL that those other guys cannot.

First plan year: More than 99 participants(**) at the beginning of the year: 5500(*). 99 or less: 5500-SF(*) After the first year, use 80-120 rule. That rule says, if you file an SF, you can continue to do so until the BOY participant count is under 120. When the participant count (again, at BOY) goes over 119, then you must file Form 5500 with an audit. If you are filing a 5500, you continue to do so until the BOY participant count goes below 100; then at 99 or less, you can shift to and SF. However, you can still file the 5500 if you want, until the participant count goes below 80; then you HAVE to file an SF. (*) When I say 5500 or 5500-SF, I really mean large plan filer and small plan filer, respectively. Large plan filers must get an independent auditor's report and have it attached tot he 5500 filing. Small plan filers, as long as they qualify for audit relief, do not. However, a small plan filer may have to file From 5500 (with Shed I instead of Shed H and the audit) due to a variety of reasons. (**) Participants does not mean Employees. A participant for the 5500 series means anybody who was eligible for any component of the plan at BOY or EOY. PLUS any former Employees who have a benefit due under the plan. This includes eligible participants who may choose not to contribute and may have a zero balance. An Active participant is simply someone who was still employed at BOY and/or EOY. I have a client that has about 950 employees, but only 7 participants because the vast majority of employees work less than 1,000 hours a year and thus never became eligible for the plan.

Even if I made the formula based on PY comp, I still have to test using the comp from the current year.

'Zo: I know they can take a distribution now (kinda--its a pooled account and I have to do my valuation), but I'd rather wait a week or two and have the contribution deposited so they only have to take one distribution. I figured we could allocate 5% to the staff (I know their plan year comp already). I will have to look to see if there is a last day rule and do 11-g if there is. Then we can do distributions to the staff. Then, wait until the Sched C done and allocate as much as I can to the owner whilst still passing testing.

We have adopted a policy of filing SFs for "one-participant plans". I tell the sponsors that is an 'upgrade' to the SF with the benefits of immediate, electronic confirmation and the fact that its not available to be seen online. Plus they save the registered mail fees. We usually file for them and don't charge for the filing (we do charge for the preparation). I'd say we have a 90% adoption rate of that policy. There will always be a few sticks in the mud who can't or won't do stuff electronically. I leave that up to the bosses to determine if we charge more or not.

Sorry. There ARE other employees. Probably 5 or 6. Other things of note: company ceased day-to-day operation on 6/30, and no longer has employees. Maybe do a 5% contribution to EEs and then see what the owner can get after Sched C is available? This way Employees can take distributions.

Sole prop plan. Plan terminated 6/30/20. Profit Sharing only. Owner wants to make a contribution for the year. How do I determine the owner's comp? Sched C won't be ready until next year. What if it's not PS only, but a 3% SH, or a plan with a fixed match? Do I have to wait until late-winter or spring?

I think your answer lies in EPCRS. The sponsor has two options: Make a QNEC on behalf of the NHCEs at a level that makes the test pass --OR-- Do a refund and also contribute a QNEC in the amount of the gross refund.

The DoL calc seems low. overall, a 0.34% interest rate. Doesn't seem to be much return over 15 years. This was my reverse calc, and I'm pretty sure I'm correct, but let me know if I'm not: 1052 = 1000 x (1+x)^15 (divide both by 1,000) ln 1.052 = 15 ln (1+x) (ln 1.052) / 15 = ln (1+x) .0034 = ln (1+x) e^.0034 = 1 + x 1.0034 = 1 + x x = .0034 = 0.34%

In my experience, calculation of lost earnings means by any reasonable method. In this case, I would try to calculate the plan's rate of return over all those years. Using the DOL calculator, I put in $1,000 lost a/o 1/1/2005 with final payment today. Result: $1,052.28. If the plan had a RoR greater than 5.2% over 15 years then I don't see how you could rely on the VFCP calcuator. Lost Earnings Principal Loss Date Recovery Date Final Payment Date Amount Due $1,000.00 1/1/2005 7/21/2020 7/21/2020 $1,052.28 Principal Amount total:$1,000.00 Lost Earnings total:$1,052.28

I have a plan that is terminating and has liquidated all its assets that were held at a national carrier earlier this year. Funds were disbursed properly, per participant instructions. They did this before we could calculate the 2019 Safe Harbor contribution for them. The national carrier, as expected, is reluctant to re-open the plan. Our solution was to just have the client open up a bank account using the TIN obtained for the trust. The bank cannot seem to understand the nature of this transaction and is saying they need to "register" the the name as a new entity thru their CPA. And they said "alternatively, you can have business documents registered (articles of incorporation or short form) to the name [you] are looking open the account under." [sic] Any talking points to get these guys off the ledge? I've never had such trouble (or, rather had a client get so much push back) trying to open one of these accounts. This is a big, international bank, so I'm mystified as to why they cannot understand the process.

Unless it is a Safe Harbor Match (SHM) calculated per pay period. In that case, they must be deposited no later than the end of the calendar quarter after which the corespondinding deferrals were withheld. For example, the SHM (that's calculated on a per-pay basis) on any and all deferrals withheld from April 1 to June 30 must be deposited no later than Sep 30.

Small plan. 2 owners and 2 other ee's. Biggest annual deferral (besides owners) was ~$1,500 ($60/pay). I am fixing '19 & 20 and leaving it up to him to decide if he wants to fix prior years. We did the years past, but we never before received a schedule of deposits, and the client always answered 'no' to the late deposit question.

Year after year client answers 'no' tot he question 'were and deferrals deposited late.' The accounts are brokerage accounts for which we only get the 12/31 statements with the YTD figures. Often this is good enough to cobble together my 5500's. (side note, this is my first year servicing this client) They switch investment houses in 2019 so I needed some help from the client to reconcile the deposits. I got a list of all the remittances to the trust accounts by date and type. Turns out, they were transmitting funds once a month, but the employees get paid every other week. We are, of course going to calculate lost earnings for 2019 and 2020 and try to right the ship going forward. I'm pretty sure that this has been going on for a while. How far back would you go looking to correct this stuff?

Even better to correct prospectively!

I believe that the partner could take a deduction on the pension cost to his staff, but he is unable to get an allocation and a corresponding deduction.

That's a question for his accountant

Couple years now. Right around when FIS bought them. Just call to submit an incident and you probably will get someone right away, unless they are all busy.

Did you call them? Relius has "instant" service now. You can often talk to someone right away.

Plan was effective 1/1/16. What about retroactively amending to conform to the way the plan was being run and coincidental to the ERs original intent?

Did you ask Relius?