Lou S.

Thanks Rigby, that thought occurred to me as well.

I'm not sure. I'm just exploring the minimum funding issue right now. Someone else in the office is dealing with the potential client.

Unfortunately I tend to agree with you. I'm just wondering if anyone has any experiences with a similar situation or something definite one way or the other. I've done a few searches but can't find anything on point.

We have a potential referral and interesting situation. IRS is proposing disqualifying a plan back to it's inception saying it was never qualified. In cases such as this, do the minimum funding standards still apply? It would seem odd that they would apply since the disqualification would negate any deductions but I can't seem to find anything quite on point. Assume the Plan is not subject to PBGC coverage and the client does not want to enter a closing agreement to "fix" the disqualification.

To add if there is no provision for disability in the DC plan, the real impact on the participant is if the code on the 1099-R is on account of disability which is not subject to the early distribution penalty versus a regular distribution code that would likely be subject to the 10% penalty on early distribution, assuming the participant is on the younger side.

As far as I know the RMD is still required and does not require any spousal consent. You can let both parties know it was made and they can negotiate it into the settlement as to what both parties ultimately get.

You assume correct. Foreign retirement plans can not be rolled in to US plans as far as I know is any way.

1. OK. I assume your accountant has discussed reasonable compensation and you, the actuary, and accountant are comfortable with you receiving no W-2 pay. I'm not accountant so I don't opine on it, just know it can be an issue in S-corps. 3. Correct if you have no compensation you'll receive no SEP contribution. But since you are accruing service and presumably increased benefits in the DB plan there may be aggregation issues. 4. Sorry I don't really work with SEPs either just know they are there and that there is some interplay with 401(a) plans like a DB plan. Maybe someone else will chime in that can help you in that area.

There are only some exclusions you can make. You can excluded years before the age of 18 and in a new plan you can exclude service prior to the effective date of the plan (assuming no predecessor plan). You can not define vesting years on participation instead of service. Rules for changing between elapsed time and hours of service vesting or vice versa are addressed in the regulations.

1. How are you eligible for the DB plan accruals with no W-2 wages? There is a combined deduction limit. You can't use the IRS model SEP. 2. Maybe but there may be both discrimination and top-heavy implications. 3. SEPs have pretty liberal entry requirement and anyone who meets then entry condition and earns over a very small amount in compensation must be covered and receive a contribution. 4. I'd start by talking to the TPA or actuary who does your DB plan.

I believe it includes all days that end in a the letter y.

I agree. But the distinction in this case to me is an HCE is being given the option to continue making loan payments and not take taxable income while NHCEs are not given the same option. Sounds like a BRF failure to me.

Should be in the Participant Loan Program. Are other terminated employees given the option to continue repaying their loan after separation from service or does the loan become due and payable?

1 - I agree. Not a problem for 2015 annual addition. 2 - Agree subject to 25% deduction limit I see no reason why it can't be deducted for 2016. 3. - N/A because of 1 & 2.

You can change it so that future participants are subject to the 4 year schedule but folks that are already 100% vested can't be switched at this point as you'd have a 411(d) cutback. I mean I guess you could technically move folks with less than 3 years of service to the new schedule as long as you preserve the vesting they attained under the old schedule which is ...100%.

I don't know the answer to your question but my recommendation would be for you to see a qualified attorney who is has knowledge in the ERISA and IRA investment area.

Eligibility is not a protected benefit. If he's excluded and not eligible he doesn't get a TH minimum.

My understanding is that is the way it works. If you want to retire the loan you have to pay it off with interest. I think the 5 year requirement is only with respect to being 72(p) compliant. The default part is triggered by non-compliance with one or more parts of 72(p) but it doesn't technically remove the obligation to repay the loan. Frankly I think the IRS position on "carrying" a defaulted loan on the books is a bit strange in the first place but that's what they've chosen to do. I imagine it is designed to keep from circumventing the in-service distribution rules by constantly borrowing, defaulting and removing the loan balance. But that's really just a guess. The once nice thing about "carrying the defaulted" loan is it counts against the loan limit and eventually you don't have to worry about that troublesome participant defaulting on another loan. Though they can be a pain when they keep calling as to why they can't take another loan.

I don't know the general answer to your question but I do know that often times Prevailing Wage contributions are used as QNEC to help with ADP testing. When this is done the PW contrib takes on the characteristics of a QNEC and become ineligible for hardship distribution.

I'd ask him to point out for you in the DOL regulations on EMPLOYEE contribution timing where EMPLOYER contributions are ever mentioned.

We don't reporting matching contributions. I'm not sure why you would.

Only one 415 limit in this case. See 1.415©-1(a)(2)(iii) Always one 402(g) limit and one catch-up limit. 403(b) and 401(k) are aggregated under a single SSN for these limits. If there is a 457 plan there may be an additional deferral and catch-up opportunity but I forget which type of 457 plan allows for this.

I don't see a problem. Though I'd be getting a supplemental notice out ASAP that the plan is no longer SH.

Plan A will not pass testing with only the owners getting a PS contribution unless all NHCEs terminated with fewer than 500 hours which is extremely unlikely given your 9-30 date as your ratio percentage will be 0% which will only pass if there are no NHCEs required to be in the 410(b) test. Yes the plan would need a TH minimum contribution if it makes a PS contribution. However the TH contrib in a DC plan goes to non-key employees employed on the last day of the plan year of which there are none. Also the way you have worded this question makes me think this was an asset sale and not a stock sale, if that's not the case my answer might change.

Like I said the IRS does not offer CE but I think you can self report the credit for ASPPA credit towards the 40 hours required but should probably double check with the ASPPA on that in advance. The IRS used to offer a CE cert that was good for EA (both kinds), ERPA, and ASPPA as I used it to get nearly a 3rd of my credits in the last cycle but they stopped doing it the middle of last year I think which I think sucks. It was one of the few places you could get free continuing education credits and the content was generally at least as good as any ASPPA webcast and sometimes better.