emmetttrudy

Limitation year = Plan year, so no worries there. And correct, no mutual ownership whatsoever. Tow completely different companies with no affiliation or commonality. It does feel aggressive, I agree. But, I haven't been able to find something that convinces me it would not be permissible, or would be in excess of a particular limit.

Employee participates in Plan A for part of 2020 and contributes the maximum of $19,500 employee Roth Contributions. Employee terminates service and moves to a different company where he/she is immediately eligible to participant in Plan B (there is NO controlled group between the two entities). Plan B permits after-tax voluntary employee contributions. No employer contributions are allocated in Plan B. Can the employee deposit a maximum of $57,000 as an after-tax voluntary contribution? I believe the employee contribution is a calendar year limit (maximum of 19,500), but is the after-tax voluntary contributions subject to the 415 limit which is a Plan limit?

I forgot to mention an important detail too (since added to original post) that the participant is the 100% owner. NRA = later of 65 or 3rd anniversary of Plan participation date. So, his NRA would be 1/1/2021.

I am trying to determine when the first RMD is due for this participant in a Cash Balance Plan. Details: - Participant is 100% owner of the plan sponsor. - Participant turns 70 1/2 in 2018. - Plan's original effective date = 1/1/2018. - End of year (12/31) valuation date. - Plan excludes service prior to the effective date of the Plan for vesting purposes, and the vesting schedule is a 3 year cliff. Would the first RMD be due 4/1/2021?

A Plan handed out the NOIT 60 days prior to the proposed termination date. Assume they did not sign the plan termination amendment within that 60 days. But they do sign it within the 90 days. Can they distribute a revised NOIT with the new termination date, and still rely on the date the original NOIT was sent out? Or does the 60 day clock re-start on the day they hand out a revised NOIT with the new termination date?

Thank you, that's what I was hoping to confirm. And yes, "as much as they want" up to the 404 maximum deductible amount.

Plan Sponsor has a PBGC-covered DB Plan and a 401k Profit Sharing Plan. I understand because of the PBGC coverage there is no combined deduction limit. However, does the 25% limit still apply to the DC plan only? My understanding is that yes, it does. For example, they could deposit and deduct as much as they want into the DB Plan. And in the DC Plan, anything up to 25% of compensation is allowable. But anything over 25% in the DC plan would be a non-deductible contribution and subject to an excise tax.

If there is a DB Plan that is covered by the PBGC and eligible to file an EZ, are they required to get an AFN? It is not clear since this Plan would not be required to distribute a SAR, and the AFNs are "in lieu of the SAR".

OK - I think my original question partly relied on what is considered the distributable event. It sounds like just turning 70.5 is not considered a distributable event, but getting to the RBD does trigger a distributable event? So, let's assume the Plan does have an in-service distribution provision (at age 62, or at NRA age 65), then the participant could choose to elect a distribution prior to the 4/1 RBD, and this isn't necessarily because they are 70.5, but rather because they're otherwise eligible for a distribution under a different provision in the plan?

It is my understanding that the Required Beginning Date is the date by which a participant must take his RMD. If the person chooses, he can take his RMD earlier, correct? He does not have to take it on the RBD? For example, if the RBD = 4/1/2018 but the participant wants to take his RMD prior to 1/1/2018, so it affects his 2017 taxable year, he could. Is this correct? This is for a Cash Balance Plan, not a DC Plan. Thanks.

thank you

Owner A owns 100% of Company A Owner A owns 50% of Company B There is no other mutual ownership (or even employees). Both plans allow for profit sharing contributions. I know the employee (over age 50) can only max out his deferrals at $24,000 taking into account employee contributions to both plans. But what about employer contributions? If he contributes $24,000 employee deferrals to Company B and they give him a $35,000 profit sharing contribution to get him to the $59,000 limit, can Company A also allocate him a $53,000 profit sharing contribution? Assume no controlled group or affiliated service group. Is that what makes them considered "related"?

woops - my apologies I left out that important information! the owner turned 70.5 in 2013 so his required beginning date was 4/1/2014.

Cash Balance Plan effective 1/1/2014. Service prior to effective date excluded for vesting purposes. Owner becomes vested in 2016. When is his first RMD due?

Often you see a case where an employer deducts a 401k contribution but fails to deposit it or deposits it late into the plan. What about this situation? An employee completes a deferral election form and the client begins to deposit contributions to this participant's account on a payroll basis (about $600 over 3 months). At some point the employer realizes that even though they were correctly depositing the funds to the participant account they were not deducting them from the participant's paycheck! What is the best way of going about fixing this? Have the employer deduct the full amount from the next paycheck? Can they spread it out over the remaining paychecks, in addition to the regular deferral? Is there a better way?

the current ratio is 93.32%. almost everything I have read says 3% or less is the "standard" although no official IRS guidance has been issued.

I've seen some other threads on this topic but still somewhat confused on this issue. A plan is a safe harbor match plan with no allocation of other employer contributions (including profit sharing). The plan excludes bonus compensation. When the 414(s) test is run it fails (none of the two HCEs have any bonus). What is the correction, if any? I was reading a Q&A from an Ft Williams presentation and they mentioned that if you have a safe harbor matching plan and choose to exclude bonuses you do not need to apply the compensation ration testing.

thanks. fyi - the client was able to call the general 800 number provided on the 5500-ez instructions and eventually get a hold of someone who was able to confirm the filing. though it took a while and many times of being hung up on because they were receiving an "abnormally large volume of calls".

Years ago I remember there was an 800 number you could call to check on the status of a Form 5500-EZ. You could search on an automated system by EIN and PN and they would tell you whether a Form 5500-EZ had been received by the IRS. Does anyone know if this still exists? A plan sponsor is unsure if he/she filed the 2014 Form 5500-EZ. Is there any other way to verify?

the annuitant for one contract is listed as the wife and the annuitant for the other contract is listed as the husband, both 50/50 owners and both Trustees.

thanks all. there are other participants in the plan. i think part of the issue i have with it is how it is being presented to the client. it is definitely being presented to the client as "all the money in this annuity is yours". it's certainly not presented to them in the sense that all of the money in the plan, including the money in the annuities, belongs to everyone in the plan, and is for use to pay out benefits to all participants. i don't think they're appropriate. i am sure they are costly. but when there's money to be made, i'm sure the advisor can come up with a "justification".

by "owned" I mean the individual participant is listed as the annuitant. not the plan.

A CBP has invested the plan assets in 3 different accounts. One is a variable annuity owned by the business owner. The 2nd is a variable annuity owned by the other business owner (they are spouses). The 3rd is a generic mutual fund (not important for these purposes). I do not think these are appropriate investments for a CBP. Annuity investments must be owned by the Plan, they cannot be assigned to an individual annuitant. I fail to see how these are appropriate investments in a CBP. They are contributing the CB credits to the two annuities, as if the assets in that annuity are solely for the purpose of the named individual on the annuity. Could anyone recommend any specific IRS and/or DOL regulations that would back up the position that these are not appropriate investments for a CBP?

well...playing devil's advocate here, the NOIT is a notice of intent to terminate, correct? so handing out the NOIT doesn't mean any formal action has been taken to terminate the plan, it is just notifying the participants that the plan will terminate at a future date.

My understanding has been that the plan termination resolution and plan termination amendment must be signed before (or same day of) the NOIT is distributed (60-90 days prior to plan's termination date). Someone had mentioned to me the other day they thought that as long as the NOIT was distributed timely that the resolution and amendment could be signed all the way up until the plan's termination date. I called the PBGC to ask them this and they said it was the first time they had ever been asked this question, but their opinion was it made sense for the resolution and amendment to be signed before (or day of) the NOIT was distributed. Any thoughts or has anyone seen the various deadlines spelled out somewhere official? The standard termination instructions don't seem to specify.