Doghouse

https://www.nceo.org/articles/freezing-terminating-esop This article is interesting in that it suggests that upon plan termination, some of the discounts that would normally apply (for marketability, minority interests, etc.) should possibly no longer apply.

For those who have ever been on the phone with the IRS regarding this issue, you'll know that they are a bit sloppy with the distinction between the plan and the trust. I think the source of this is the way the instructions have you complete line 10 for a pension plan trust.

The attached publication indicates that the "P" does in fact indicate employee plan. I have gotten these in the past, and just used the number without the P, and it works fine. p1635.pdf

We have been using them for a couple of years, and haven't had any issues, but then again, we haven't made any claims!

Is someone saying that he cannot?

I must admit to some confusion over the fact that the reporting changes mandated by PPA 1103(a) do not seem to have been reflected in the 5500-EZ instructions, although the changes were supposed to have taken place in plan years beginning 1/1/2007 or after. As it currently stands, a partner-only plan can file an EZ even if it must be combined for coverage with another plan, or even if it is a member of a controlled or affiliated service group - a situation which would be precluded by the provisions of 1103(a). What happened to this entire section with respect to implementation? Dog

Your questions suggest that some basic education is needed. There are many resources available, and you should probably consult one. My feeling is that the subject is too extensive to be addressed on the message boards.

If you are saying that all these employers are under common control, then it is possible that the plan document automatically brings them in. Many do. You should check.

I went through this last year, and can I just say that the EOB has a pretty good summary of what you need to do. I won't paraphrase it here but it's under the heading "Changing the plan's service crediting method" if you have that resource and want to search for it.

I should mention that you do have the "successor plan" issue if you go 403(b) to 403(b) - which is why in many cases we've ended up going 403(b) to 401(k).

Most of the 403(b) providers I have worked with terminate a 403(b) by converting the accounts to individual contracts. Then the participants are free to roll over or just leave as an individual contract, but in any event, it's no longer in the employer-sponsored 403(b) plan.

Restructuring for ADP and ACP went bye-bye with the issuance of 401(k) regulations in 1991.

I seem to be having problems hyperlinking, but the site http://www.annuityadvantage.com/immediate.htm has a good description of the permutations. The problem is, I don't know if anyone can answer your question, since it really depends on what was elected at the time. I assume that in addition to the other documents that you don't have, you don't have the actual election form either?

Another question: some of the partners are incorporated (PC's). Does that affect the ability to file an EZ rather than a full 5500? If you think it affects that ability negatively, can you point me toward something from the IRS so indicating? Thanks to all for prior and current thoughts!

No, Lou, I'm not trying to do that. I'm just trying to nail down when income is actually paid - in this case, whether it is considered "paid" prior to the time it becomes "fixed" (December 31).

A plan is sponsored by a partnership of 75 partners. It is a safe harbor nonelective (3%) 401(k) with profit sharing. A handful of partners are leaving the organization over the next few months. If their earned income is all deemed to be paid on the last day of the taxable year (12/31/16), then they would have no earned income while still "employed" by the partnership, and thus no safe harbor nonelective contribution for the year. Is that treatment correct, provided no plan provisions to the contrary? I know this has been discussed previously, but I don't think I will be able to find it until BL offers a "Remedial Search 101" webinar.

Usually such provisions are just blanks that are filled in by the adopter. We always try to use the term "direct" shareholder or owner to eliminate the ambiguity - especially when all the "owners" are lumped into one group. Without that distinction, it's a great way to fail a test.

Is the "investment house" the trustee? If so, perhaps you have an MTIA that is subject to certain filing requirements?

In drafting the language for the groups, I always put something in about group membership being determined on a specific date, e.g. the first or last day of the PY.

Perhaps because it's in the 401(k) Forum

There is of course the "bona fide administrative consideration" under 1.401(k)-1(a)(iii)©(2).

That is a very good point, Mike. Thank you!

That is why many TPA's have significant extra charges for plans with life insurance.

I went through this exact same exercise a couple of years ago - it may even have been for the 2013 form. I ended up sending in a written response pointing out the same part of the 945 instructions, and I never heard from them again. Of course I still had to get a 2848 and everything from the client, so I'm not sure I saved any time, but it was the principle you know....

Rate of match at 2% deferral is 0%. At 3% there is a match. That is an increase.