Lou S.

Anyone still employed is receiving an "in-service" distribution. For 1099-R coding both would be "7" unless something unusual applies.

I assume you've already send in the first filing with a letter noting they are asking for a 5500 for a year before the initial effective date? If you have and they haven't fixed time to start making some phone calls and get a warm body to address the issue.

1 is too few, 13 million is too many. So somewhere in between. Like jpod I don't thing there i any direct guidance on the optimal number of investments. It is left to the prudence of the Trustee's to decide.

You can't use the forfeitures to fund a safe harbor contribution, QNEC or QMAC but there is nothing that I am aware of to stop you from using it for a discretionary match that happens to be to a 100% vested source.

Are they on a PPA document? If the answer is yes you are done, the deadline is 4/30/2016 but it could have been done as early as May of 2014, I believe since that is generally when the preapproved PPA documents first became available. If the answer is no and they are on an EGTRRA document then they need to restate the plan by April 30, 2016. Answers above assume Plan is using a preapproved volume submitter or prototype document and is not individually designed.

Unless there is an expectation that the loan won't be repaid I'm not sure why a prior bankruptcy will impact his ability to take a participant loan.

I can think of no good thing that can come out of such a design but several potentially expensive ones. But maybe I'm missing something obvious.

If you are talking about Federal Tax Withholding on a distribution, the answer is no. It is simply part of the distribution to the participant. If you have federal tax withholding for some other reason, (UBTI maybe?) I don't know what the answer is.

I don't know if there are specific rules relating to rollover checks but my guess on DOL investment standards is they would simply extend the current rule for investing deferrals and loan payments. I'm pretty sure the DOL would find 2 months an unreasonable delay. But the investment issue as you correctly point out is the receiving plan issue, not yours. You are in the difficult position of not really being able to close the trust.

It's a fiduciary violation for the new plan to sit of the checks. If the participant's haven't made election the Trustee needs to invest the money for them or put them into the plan's default fund. But you probably know that. That said I have no clue what to tell you. Maybe a cashiers check?

I think you are OK as long as you don't file before the non extended tax deadline which invalidates the extension.

Unless you take steps to formally terminate the plan you still have a plan, just with zero eligible participants and zero current assets.

Did the prior plan terminate? Was a final return filed even though there are still assets in the trust? Why was the transfer initiation left up to the participant and not done by the trustee's of the company 401(k) plan?

Yeah it it is always an interesting question with self employed. I think in 415 compensation definitions it is almost certain that the pay would qualify as 415 compensation. Even though it is "fixed on 12/31" I don't see any reasonable way of classifying it as anything other than pay earned while in the employ of the employer.

It sounds like you are trying to institute a last day requirement for partners to receive a safe harbor contribution. I don't think your logic will fly with the IRS but I could be wrong.

I'm still a bit confused is the design something like this - Plan 1 - Cash balance - Owners get credit bringing them at or near 415 limit, NHCE get credit such that they pass 401(a)(26) Plan 2 - Profit sharing - Owners get 415c limit, NHCEs in CB plan get 7.5% PS contribution, other NHCEs not in CB plan get 3% TH minimum? If that's the case then no I don't think that works. But I'm really just guessing at what you are trying to get done.

How do you give a 7.5% gateway in the DB plan? How do you not give the 7.5% gateway to all employees in the DC plan if you are using it to satisfy coverage testing with the DB/DC combo? Non-keys only in the DC plan would only need to receive the 3% TH minimum, but that brings back the issue of the 7.5% gateway. Non-keys in both plans need to satisfy one the following based on drafting of the plan (though again this may or may not satisfy gateway) -the full TH minimum in both plans -5% DC contrib -2% DB minimum accrual -another method that satisfies the rules and does not have employer discretion.

Thanks, I'll search.

I'm coming across a weird situation I have not seen before and wonder how to handle. I feel I should know this so if it's basic my apologies, CB credits are roughly $250K Due to mandated interest rates my valuation results are coming up with a minimum contribution of roughly $190K and maximum of roughly $220K. There is no current Funding Target as this is first year with no past service so I don't seem to be able to take advantage of the cushion amount. The plan results have the $250K credits as the amount payable under the plan and these are below the 415 payout limit for all participants but my max deductible results fall $30K short of the the CB credits? Can the client fund and deduct the full $250K in year one? Plan is PBGC if that makes a difference. Am I missing something obvious here that will allow me to make the full $250K contrib?

They can do it now and deduct it in 2016, subject to deductible limits in 2016. I believe in needs to be deposited by 4/15 to count as an annual addition for 2015. I seem to recall something about with in 30 days of the tax return deadline.

Been awhile since I've run into this but informing them that they are taking on direct fiduciary liability for ignoring the Plan Trustee's written direction often gets them moving in the right direction.

Any employer contribution to the DB plan will reduce the Sole Proprietor's self employment income which can drastically effect the DB valuation in some cases. In other words you are correct it could cause the SP to have very low compensation if a large "cushion" contribution is made. This can impact the 415(b) limit if owner doesn't already have a "good" high 3 years compensation. And can throw off testing in a DC/DB combo plan if SP comp becomes too low and you are using the current year testing method.

If he puts $10K into a DB plan his income is now $0 and he can make no deferral, ROTH or traditional. If his income is $10K he can make a ROTH or traditional 401(k) of $10K.

TH minimum required for 401(k), no question about it.

It must be pro-rated