PensionPro

are defaulted loans (that have not been offset) included in the account balance when calculating the MRD? Thanks!

I see the original post referenced a 401(k) PSP but I am dealing with a standalone PSP as well as a non-PBGC DB plan.

IRM says, The proposed termination date may not be retroactive except when it will not reduce any participant's accrued benefit. So it sounds like esp with a PSP you could have a retroactive plan term date. Any thoughts?

Reasonable classification is a facts and circumstances analysis so hard to tell without looking at the facts and circumstances. Keep in mind however that the regs say, among other things, that reducing the employer's cost of providing retirement benefits is not a relevant business reason. If you are classifying employees w/ < 5 YOS in a separate category to reduce the cost you may not have a strong case.

Yes I don't think there is a simple path here. Thank you!

I don't think it is possible to defer from imputed income. If plan defines comp as W-2 you may have a problem since s/he is eligible to defer from W-2 comp but can not. Your solution is (or would have been) to exclude fringe benefits from definition of comp for deferral purposes.

VCP fees for other submissions such as nonamender failures, loan failures, etc. were not changed by the new guidance.

I see your point. I am exploring the possibilities so do not have a firm opinion yet. My concern is that one of the requirements under item E of your citation is that the plan needs to be "amended to provide that the ADP test will be satisfied for the entire plan year in which the reduction or suspension occurs using the current year testing method ..." So it seems possible that the plan will not be exempt from the ADP/ACP requirements even if it is SH for the entire year using different methods. The other more practical concern is that lets say we suspend SH match as of 4/30/2016 can the 3% SH nonelective be effective 5/1/2016 of does it need to be effective 1/1/2016? Thanks for helping me think through this!

Thanks for looking that up, Austin! That citation relates to the exiting rules where a SH match is reduced or suspended mid-year and the plan becomes subject to ADP/ACP testing. Maybe the regs don't contemplate or permit a situation where a plan switches mid-year from one type of SH (e.g. match) to another type of SH (e.g. nonelective)?

Even though the IRS views a merger as an amendment to the plan, is a plan amendment a requirement?

The document would be amended and updated notices provided. The amendment itself does not seem to be prohibited. The new rules prohibit changing from QACA to regular SH and vice versa. If the match is to be calculated at YE is there still a cutback issue, assuming that's the argument here? Also, are you saying that a plan could go from a 3% nonelective to 4% match mid-year? Thanks!!

It is not the same question. My question has to do with the mid-year amendment rules. Plan is doing a basic safe harbor match and wants to do a mid-year amendment effective 1/1/16 to provide 3% nonelective IN LIEU OF the safe harbor match.

A safe harbor 401(k) plan with basic match formula wants to switch to 3% nonelective for the current year 2016. Is this permissible? It does not appear to be prohibited. Thank you for your comments!!

Yes your assumptions are correct. The value of the policy cash surrender value was included in his benefits. The benefits were however paid from other (commingled) assets. So he got fully paid and there is no money owed him from the plan. At this point, the two options are (a) the plan surrenders the policy, and that cash becomes plan asset, or (b) the plan sells the policy if the conditions of PTE 92-6 are met. Am I missing something? Thanks for the insight!!!

yes

Update: seems the plan could sell the policy under PTE 92-6

There are only two participants in the plan - husband and wife. Husband and wife split in a nasty divorce. The husband terminates employment and takes his portion of the funds from the plan. However, he leaves the life insurance policy in the plan. The policy covers him with the plan as beneficiary/owner. It seems the distribution was done incorrectly. He should have (a) taken an in-kind distribution of the policy, or (b) surrendered the policy within the plan and taken a distribution of the funds. Here we are now, there is the life insurance policy in the plan covering a terminated employee (who was paid out his benefits in full from other assets). Is there any good option at this point other than surrendering the policy and those funds coming into the plan? Can the ex-wife buy the policy from the plan? The plan assets are trustee-directed and the plan allows life insurance. Thanks for any help!

Seems like a simple question ... if a plan purchases a policy covering a plan participant with the plan as the beneficiary, what happens when the participant terminates employment? Thank you!

Even in the initial year participant count is based on the first day of the plan year. A plan administrator is not required to include the report of an independent qualified public accountant in the annual report for the first of two consecutive plan years, one of which is a short plan year provided certain conditions are satisfied including the condition that the audit attached for the subsequent plan year covers both plan years. See DOL Reg. 2520.104-50.

This is more of an accounting than a pension question. I believe you can deduct contributions for 12/31/14 and contributions that are based on compensation for Q1-3 of 2015 on the 9/30/15 return. If that amount exceeds 25% of eligible compensation for the period 10/1/14 to 9/30/15, the employer will need to shift some of the contribution to the next taxable year's deduction limit calculation.

I have a similar question. If k-1 shows line 14 with amounts for code A and code B, what amount do I use as my starting point to calculate plan compensation? Thanks.

We have a partner that receives a K-1 with line 14 showing amounts with code A as well as code B. Is the code B amount included in plan compensation? Thanks! Note: Line 14: Self-employment earnings (loss) code A: Net earnings (loss) from self-employment code B; Gross farming or fishing income code C: gross non-farm income

I would be curious to know where the rules are clear on that issue. So far I am seeing the following language (emphasis mine) ... 1) From PLR 201229012, "taking into account only those employees who have allocations other than elective deferrals." 2) Latest EOB's commentary on the PLR is "the deduction limit is determined by taking into account only the aggregate compensation of the employees who participate in the allocation of the employer contribution to the plan for the year for which such contribution is made." Am I missing something or are you referencing the 410(b) coverage rules? Thanks for clarifying!

Any feedback anyone? Thanks.

Who do you include in the deduction limit calc -- participants who are eligible to receive match or participants who actually receive the match?