Lou S.

Congrats Mike, well deserved.

The 101(j) notice is required. Try IRS Notice 2012-46 which is the IRS official guidance on the 101(j) notice if I recall correctly.

For what it if worth we have had PBGC approve waivers for non majority owners (with spousal consent) on plan termination that allowed a standard termination to proceed but it's been quite some time. From what I recall the PBGC is pretty receptive to working with you particularly if the alternative is distress termination. As for not PBGC plan the benefits are typical reduced to the level of funding based on the terms of the plan in a nondiscriminatory manner. The two most common methods I've seen in plan documents is pro-rata on PVAB (though this can be problematic if integration is involved) or pro-rata on PBGC priority categories though this can sometimes be problematic from a nondiscrimination standpoint in small plans as the owners typically seem to have the most benefits in the higher PBGC priority categories.

Aren't they already late with the TH contribution at this point? Doesn't it need to be in by 12 months after the year end? And yes I would think at this point you need the 3% for 2015 & 2016, the only question that remains is do you do a VCP filing.

After re-reading (several times) Tres Reg. §1.4019(a)(9)-4 Q&As 3, 5 and 6 I think they can use the age of the eldest beneficiary to determine the RMD for 2017. I wouldn't stake my life on I but I'm reasonably confident enough to say that it is allowed and can be used for the calculation. I'm also confident that they can not use multiple ages in sub-trusts to further reduce the RMD.

Thanks both of you. Yes I think the 9/30 comes into play for various scenarios but not specifically for this one as the whole thing will be wrapped up before 9/30 of the year following death, at least from the Plan standpoint, after that I don't really care what they do with the IRAs. The trust meets the applicable rules for pass through trust under 401(a)(9) so I thought we'd get the benefit of oldest beneficiary if better in calculating the RMD for 2017 but based on ESOPs post maybe not. Looks like I'll have to re-read the regs again. Essentially the RMD is being paid to the trust then distributed from the trust to the 5 beneficiaries and the balance of the account will be rolled to a conduit trust IRA that will then be divided by the 5 beneficiaries. I didn't set up this structure, just trying to follow the executors instructions while keeping the Plan in compliance with the RMD rules which always seem needlessly complex whenever I have to delve into them.

Participant in profit sharing plan over age 70.5 in pay status died in 2016. 2016 RMD was made to participants Trust. In 2017 the balance of the account will be rolled to an IRA that will be divided by 5 beneficiaries. The 2017 RMD must be made prior to the rollover to the conduit IRA and will be made to the trust prior to the rollover. Assume for this that attorney handling trust and rollover IRA has done it properly. I get confused on what the RMD divisor for 2017 RMD is in this situation. Is it "the participants single life divisor in 2016 minus 1", or "the single life expectancy of the oldest of the 5 beneficiaries in 2017" if that results in a smaller RMD? Or is there a different rule I'm missing? Any guidance appreciated.

If you do a true up it would apply to all similarly situated employees, not just HCEs or you would have a discrimination issue. But in practice it probably going to go mostly to HCE who front load their deferrals like the ones you describe. That's OK as long as you true up all employee, provided the document allows, even if it only goes to HCEs. If that makes sense.

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.