Lou S.

I get that you can do that and not violate 415 or the plan terms. My question is how do you deduct it? Maybe my understanding is wrong but I didn't think the deduction on line 28 of the 1040 can't exceed the income on line 12 of the 1040 and whether it is 401(k), catch-up, match or profit sharing it all goes on line 28 for the solo-k person. But maybe I'm missing something obvious.

Mike has a better detailed explanation but assuming $20K in "pensionable income" the solo-k participant is effectively going to be limited to $20K maximum contribution. While they technically could receive $26K and not violate 415 you have a non-deductible contribution subject to the excise tax under every conceivable scenario that I can think of if you try to contribute more than the earned pensionable income.

http://www.workplaceclassaction.com/2011/02/limitations-period-for-erisa-pension-benefits-claim-accrues-on-date-when-plaintiff-should-have-recei/ ^Not sure if this is quite on point but it seems to agree with other stuff I've found that absent a provision in the plan the SOL tends to follow state contract law. However when the the SOL starts seems to be somewhat variable. In the case cited they determined the limit started when the participant hit NRA of 65 and didn't receive benefit payment not when the claim was made which turned out to be 7 years later and 1 year after the applicable time limit in Massechuetts In your case if you can show reasonably that the participant was notified of the plan termination 18 years ago it might be argued that is when the counting time should start, on the other hand, if it can't be shown that participant was aware of the termination it might be argued that the counting of the SOL wouldn't begin until participant reached NRA which presumably has happened with the claim for SSA benefits and SSA letter to participant. But I am not a lawyer and just offering my best guess as speculation so take it for what that is worth.

We've actually removed participants on the SSA form who still got the letter from SSA that they might have benefits. I don't know what the statute of limitations is but for benefit claims I thought the limitation was effectively "forever".

See Internal Revenue Code Section 414(v)(3)(A)(i)

The catch-up is not part of the 415 limit so your colleague is correct. While you can't defer more than 100% of your income, you can be allocated more than 100% in this odd circumstance. I'm assuming this passes all applicable nondiscrimination tests.

Send him a letter denying his claims review request for 100% vesting?

I would agree with your assessment If the plan allows for administrative fees to be paid from the trust and specifically first from the suspense account, it might behoove the sponsor to pay as many remaining administrative fees as legally possible from the suspense account to reduce the amount of the reversion subject to excise tax.

I like to put up a slide of a homeless man going through a dumpster and saying "Don't let this be your retirement Plan".

I agree with Bird if the document allows for it not a problem. But does anyone else find it odd that the plan might have TH contributions on a slower vesting schedule than regular PS contribs?

There is no prohibition against non-CYE 401(k)s. Can be a bit of pain in the applying the catch-up rules. but nothing wrong with them at all. We do a few but CYE 401(k) plans are generally a bit less complicated.

You list the financial institution(s) that hold the funds and the aggregate amount held by those institutions on the SAR. You don't have to list the individual assets. On the AFN I'm pretty sure you list them by the various asset classes listed.

Last time we did one Gross amount and Taxable amount were the same and Box 7 Code was G.

I thought if you bought the stock you bought the history. I don't see how A can exclude the service accrued under B unless this is an asset sale.

If it passes nondiscrimination test you can.

SEP is Simplified Employee Pension. It is very basic and covers everyone who meets the conditions listed in eligibility but those conditions apply to every employee and everyone generally gets the same rate of contribution. It is well simple. If you want a complicated plan that has different eligibility and or different rates of contributions for different groups of employees you can do it with other types of plans (as long as you pass discrimination testing) but you can't do it with a SEP. That said, it's unlikely you could accomplish what you are trying to do even in a qualified plan because of that pesky nondiscrimination testing.

How does your Plan Document define a Year of Participation? That will be your answer.

If it is non-publicly traded I don't see how it would met the definition of qualifying plan assets for the bonding exemption. But maybe I'm missing something obvious.

I'm aware of the argument. I reject the notion of double taxation. Unless you are taxing a 401(k) loan because you are trying to boost the rate of return of your 401(k) plan the argument of double taxation makes little sense.

I think the biggest argument against Participant Loans is the default rate when you leave the company with an outstanding loan. I mean often you are hit with a tax bill for income you spent a year or more ago at a time when you may now have no current income. Personally I hate participant loans but they aren't going anywhere anytime soon that I see. As for the double taxation. No the principal replaces principal that has never been subject to taxation and the interest is taxed just like any other gains of a retirement plan.

Just to be clear a Cash Balance plan needs to satisfy the DB RMD rules not the DC RMD rules. CuseFan has a nice summary above.

1 - Not if you still want to be a safe harbor plan. 2 - If he is somehow amended out of the plan or allowed to irrevocably elect out of the plan, he would no longer be covered. By the way it would be too late at this point to somehow get out of the SHNE for him for 2017. And I think it is too late to irrevocably elect out of the Plan because if I'm not mistaken that action has to be done before you become a plan participant.

A But why would a plan give another loan to someone who has defaulted already? You'd think that would be prohibited in the loan policy or they borrower would be deemed not credit worthy by the Plan.

And your attorney may or may not have a copy in their files, assuming they are still in business. Though 17 years would be a long time for them to retain the records.

But you shouldn't get 2 years in one just for working twice the number of hours.