K2

I'll bet the document addresses Gap earnings. Mine does. It explicitly states no earnings after year end.

A participant passes away, and her three children are her beneficiaries. They are over 18. They want to withdraw funds to pay for her funeral expenses? Are they subject to the mandatory 20% income tax witholding and 10% premature distribution excise tax? I would think not, since they can't roll this over.

Not without w-2. https://www.irs.gov/retirement-plans/retirement-plan-faqs-regarding-contributions-s-corporation

I think that if the decedent's last words were "and I quit", then he has to get an allocation. Just kidding, I agree with CuseFan.

I understand that the new law increased the start-up plan credit for tax years beginning after 12/31/2019. How would this work for a plan started in 2019. Would their maximum credit be 500 on their 2019 tax return, but then 5,000 in the next two years? Or do they stick with the 500 credit for all three years.

Boy, it's really hard to tell without knowing the magnitude of the error. If you're talking about a total of $10k or $20k in missed RMD's to an NHCE who was a lost participant, than I think I would go a simplified approach of just a single 5329. But, if you're talking about $500k in missed HCE RMD's, then that's a whole nother can of worms.

She should get SHMT + MT + PS based on DOE comp, but not less than 3% of full year pay. So you'll bump her PS if you fall short, but you shouldn't.

It's not a plan loan. The loan is against the policy. Example. Participant has 250k total balance, of which 50k is the CSV of the insurance policy. Say the max policy loan is 40k. So, the policy proceeds of the loan go into the plan (40k), the participant contributes 10k and the policy is retitled out of the plan. The participant still has a 250k balance. He also has an insurance policy he privately owns that has 10k in CSV and an outstanding policy loan of 40k that the participant pays (outside of the plan with NQ money). Some people are uninsurable or hard to insure, so this is a way for them to keep protection they previously arranged for.

I have a 401k Profit Sharing plan with more generous eligibility than the statutory requirement. The plan is top-heavy. I would like to start a new 401k plan with immediate eligibility and exclude Keys. I would transfer the Deferral Component of the existing plan to that plan. The new plan will not be top heavy. With the existing plan, I want to amend out salary deferrals and have it be a stand alone profit sharing plan with two year eligibility. Keys will be eligible to participate in this plan. I'll have a cash balance plan paired with this that has keys in it as well. Any issues? Successor plan rules?

I have a plan where a participant has changed deferral elections 8 times this year. Plus, he's always calls first to ask how much he has contributed year to date (despite the fact that I've shown him where on the website to find that). The guy is a per diem Doctor with variable hours. It seems like he's always trying to project out his pay for the next month and then adjusting his withholding to match his income needs. And in this same plan, another participant has changed deferral elections 7 times, and two more have done it four times. At least those three don't bother me with questions on YTD deferrals. In the words of Jim Rome,: Reee-diculuous. Innnn-credible. Aaaa-rugula.

I agree in part with the others. In particular, I agree that an amended 2017 5500 should be filed, and that 2018 should be filed late under the program. I’m not as confident to say the plan is not terminated. Off the top of my head, I thought that the IRS considered a delay in distributing assets of over one year from plan termination date to be too long and that a delay of that magnitude would void the termination. But I don’t know if that’s a firm rule or just a rule of thumb. Still, if it were me, I’d restart the termination, update the plan documents, and reissue distribution forms. Which makes me wonder: if the plan is not terminated back in 2017, was there a distributable event?

I know you said the plan does not have an in-service withdrawal feature, but does it allow for distribution upon attainment of retirement age? If so, then the right to withdraw at age 60 would have to be preserved for the current account balance.

A target benefit plan is a money purchase plan, so forfeitures can't be reallocated. They can only be used as the document language you cited states, i.e., to reduce contributions, reinstate accounts or pay expenses.

Yes this plan has a participant at the 415 limit and it will increase. The majority owner is 60.. There are about 35 other participants. There is less than 100k in excess assets and the total assets are $8 million. It is a cash balance plan, there is no insurance in the plan. The death benefit is the account balance.

My client has a DB plan that is over-funded in the sense that the assets exceed the plan termination liabilities. The owner at the company is at her 415 limit. The financial advisor on the case has suggested a 401h account. His thought is that excess assets could be transferred to a 401h account in the plan. I am completely unfamiliar with this. Do any of you have any familiarity with this, or know of a good resource on this topic? Thanks!

Yes, if there is some language someone is willing to share, that would be wonderful!

Our client terminated their defined benefit plan. There are excess assets that they want to roll into their 401k plan and allocate, ratably over the next seven years, as a profit sharing contribution. I don't see any language in my Datair document that covers this kind of "suspense" account, or whatever I should call it. Does anyone else know of a document provider whose plan has language that supports this qualified replacement plan?

https://www.tdbank.com/personal/collateral.html?state=NJ&city=913 I checked the rates for fully secured personal loans at TD bank in NJ and FL and it was prime plus 2%. I tried to find rates at PNC, Chase, CapitalOne and Bank of America but they were all a PITA. I just wanted a number, I didn't want to fill out an app. Makes me think, though, that prime plus 1 is below market.

Thank you John.

Hi Mike... what more should i provide for a more complete answer? i really appreciate your willingness to help.

Hi, Mike. How was your 15th? I appreciate your willingness to help out.

I have a plan I want to terminate 12-31-18 and I want to freeze accruals 11-15. I am submitting to the IRS but the plan is not covered by the PBGC. I have a 204h notice prepared and set to go out 10-31. Is there a NOIT when the plan is not covered by the PBGC? Or another notification to the participants that the plan is terminating? That should be issued 60-90 days in advance? I know I have to do a notice to interested parties 10 to 24 days prior to my IRS submission. Can I submit my plan termination paperwork to the IRS before the plan termination date?

Ok thanks Mike. I will.

thanks, cal. that was great.

I have a client with a db plan who has reached age 62 and has a 415 max lump sum available to him (of $2.8M). I'm not an actuary, so please bear with me. I've been told that the maximum lump sum actually declines from age 62 to age 65. Is that correct? Also, the plan's about $500k short on assets currently. The client is the 100% owner. Do they still have substantial owner waivers? Finally, if the client decides to fund the shortfall so that he gets his full $2.8M, does he need to do that all in one shot? What if he wants to fund it over the next 12 months or so? Do I have to worry about his 415 LS going down? Thanks so much for your help...!!!