Lou S.

This brings up so many more questions about the TPA. I assume the 401(k) is OK on its own but that's probably not a good assumption on my part.

Because the Plan needs a Cycle 3 restatement by 3/31/2024 and they are on their list of maintained documents. It seems this TPAs implementation, document, administration, client communication, and actuarial services appear to require a bit better coordination.

The TPA's "blame" is a very wide range of outcomes in this scenario. From little to none at all if the client was non-responsive to their requests for information, though as pointed out earlier in the thread, perhaps they should have resigned if that was the case, to what were they thinking putting in a plan and not following up with the client?

Sweeping it under the rug is one option. Not sure that's the best or most ethical option but it is one option. they can fix it correctly which is probably going to be expensive, or they can pretend it never existed but I don't think I'd want to be involved with that decision or that potential client if sweeping it under the rug is the their answer. You can let them do that in conjunction with their attorneys advice. If you are an actuary, you're going to be bound by a code of ethics for your various organizations which would make it hard to have them as client and look away at the same time. And sure the Plan Sponsor who originally signed the document probably deserves the lion share of the blame in this.

That sounds ugly. Good luck. As to why now? Like I said earlier it probably got flagged as needing a Cycle 3 restatement and someone just realized they were missing 3 years worth of actuarial valuations, 5550s, and all the data. If they are going to fix it right they need actuarial valuations and testing for 2021, 2022, 2023. DFVC filing of Form 5500 for same years. 5330 Excise tax for failure to meet minimum funding for the same years. Oh and 3 years worth of contributions with penalties and interest. And this being December, they probably have accruals for 2024 as well.

That's a tough one since you could miss the April 1 RMD deadline if he doesn't back.

Did they actually sign a plan document and forget they signed it? Because if they did sign a plan document, they have created a contract that promises certain benefits to their employees. Now why this is coming up in 2024, four plan years after the first one is a mystery to me. Is this coming up now because they sent out Cycle 3 restatement letters and just realized they had no data, no valuations and no 5500s for 2021, 2022 and 2023? Now if they didn't actually sign a plan document, that's a different story because then you don't have a plan. I don't want to think about the penalties for failure to meet minimum funding or what they might owe to the plan should they have to correct this. But the client may want to consider bringing their own ERISA attorney to that meeting.

If you are doing it through EFTPS, why wouldn't you do it concurrent with the withdrawal? But as justanotheradmin points out the timing could vary wildly based on the amount of withholding and tax payers timing requirements.

Yes, if the there is no money in the source required to make the refund, that changes the calculus and you are back to my original answer.

If he has funds in his account to process the refund, I would just do it. That's the path of least resistance. Though you may find yourself in the same place when you do 2024 testing. I was assuming he was a former participant who withdrew all his funds.

See the instructions to Form 1099-R. I believe their is a section called something like "Refund after full distribution" that explains what you do. If I remember correctly you issue two (2) form 1099-Rs, once for the refund and one for the remainder of the distribution. The refund is no eligible for rollover so you need to inform the participant of the amount that was was not eligible for rollover. They will need to coordinate with their IRA custodian to do an Excess IRA contribution withdrawal, including earnings. They'll want it processed from the IRA correctly as a refund of excess IRA contribution and not a regular IRA distribution or they will wind up with two taxable 1099-Rs for the same money. I think just about every IRA custodian will have forms for removal of excess IRA contributions but finding the right person at the IRA custodian to talk to about how to do it can be a challenge.

I don't see why not if that's an election she makes and the plan can process 100% tax withholding.

Peter I don't think it matters because I'm pretty sure both the 401(K) limit and catch-up limits are calendar year limits tied to a single individual and plan year or number of plans does not matter.

The business can fund the plan from whatever revenue they have. The Minimum Required Contribution to the Plan must be made in cash. The benefits that accrue to participants in the Plan have to be based on W-2 wages or Self Employment earned income. If the business's only income is on Schedule E it's likely there are no benefits to accrue to employees.

As Paul says, optional, not required. But track your elections so you can incorporate them into the plan document. Or if you've already executed your SECURE Amendment, make sure it does what you want it to do.

It depends. Will any of the income be paid as earned income reported on a Schedule C and subject to SE taxes or will he maintain a corporation that will pay him a W-2 salary out of the incoming payments? Or will it all be recovery of basis and long term capital gains in the business? Probably need to talk to his accountant. if he's not going to have any Earned income or W-2 wages, then the answer is probably a hard no. If it's being paid as a "consulting fee" that he'll get a 1099-MISC and run it through a Schedule C or his corporation, it's probably yes.

Well for 2023 you can test otherwise excludable separately so you shouldn't have an ADP testing failure. For 2023 you'll need at least a top heavy minimum for the employee and a QNEC for the missed deferral opportunity. But you should be able to self correct under recent IRS guidance and the most recent EPCRS procedure. For 2024 the solo-k should just be restated, no need to open a 2nd plan. Look at the EPCRS procedure for any additional missed deferral opportunity than may be required. You are also going to have 401(k) testing and TH minimum so you might want to consider adding a 3% safe harbor non elective prior to November 30.

1 - If it is an ASG and it sounds like it is, you could do permissive aggregation. That would probably require cooperation with the Hospital Plan. 2 - Assuming its safe harbor or passes k testing as a group, yes. 3 - Again, permissive aggregation and you would likely need Hospital Plan approval and would need to to 401(a)(4) testing on the group. Sure it probably passes but you know when you assume. Also you might have a BFR with respect to the LLC plan if they are not the same as Hospital plan. 4- I don't think so, not without having done a short plan year. You can look at the transition rules and maybe an exception will apply for the year either under 410 transition (but I think your coverage change rules that out) or under the business transaction rules (but I think that would require termination the Dr LLC plans, i could be wrong).

I think there are a number or threads on real estate in small qualified plans in general and small DB plans in specific you might find in a search of this this website. This is not advice, an endorsement of real estate or to suggest that you should not do it but there are several items to consider - An annual independent appraisal to get the fair market value for both funding and 5500 reporting, though you might use actuarial value of assets instead of FMV for funding your still going to need a good value FMV to work with. The potential for prohibited transactions is greater with real estate than other investment. Not that it can't be avoided, it just has the potential to look out for. The asset is not liquid which can cause problems with distributions, especially at termination or if RMDs come into play. If 415 limit is a consideration, not having an accurate FMV can cause the plan to exceed the 415 limit when you do get a value at payout or sell it and find it was worth more than the appraisals. Not the worst problem but one to consider as folks tend to not like being hit with a surprise excise tax. You tend to lose many of the tax benefits of investing in real estate by holding it inside a plan. I'm sure there are others but that's just a short list of things to keep in mind when a small DB plan invests in real estate.

What does your termination/freeze amendment and or Plan Document say? You may or may not have to give an accrual to anyone employed on the termination date depending on how they are worded. If you only have an HCE accruing a benefit though you still need to pass all testing for your final year. (401(a)(26), 410(b), 401(a)(4), 416, etc.)

Under the Act, ROTH contributions must be fully vested. Just another delightfully administrative thing to track for Plans that allow employees to elect employer contributions be made as ROTH.

Yes - At least that would be the most prudent course of action.

I don't know that specific guidance on COVID loan reamortization was given. But I'd assume you could not remamortize the original COVID loan extension past that extended date just by applying the regular guidance on loan remortization to the COVID loans. I'd assume that any worksheet you currently use for loan amortizations should work.

For testing if the two plans have different eligibility you test them based on earliest eligibility. So if it passes either with the the person not benefiting in the one plan, or by testing otherwise excludable you are good. If it's not passing look to your document for correction methods or (11)(g) amendment to correct.

As long as you don't have stop working and rehire, elapsed time is easy. Every anniversary of DOH means vesting years = prior vesting years +1. The whole point of elapsed time is so you don't have to track hours.