CharlesLeggette

An LLC shareholder taxed as a sole prop wants to contribute a deferral but he gets no paycheck. How is that accomplished?

A TPA has asserted the following. A CB/DC combo plan that requires a 7.5% Gateway covers 6 of 10 ees in their CB plan and 10 of 10 in the PS plan and the average NHCE EAR is 2.5% in the CB plan. The ER PS contribution is 5%. Question is do the employees who are not in the DB plan get to use the 2.5% avg EAR, or since they are not in the CB plan, they may only use the PS 5% and therefore must up the PS to a full 7.5%?

He says the recently issued modified rules on Safe Harbor permit mid year adoption of a Safe Harbor feature in an existing 401K Plan....is that correct????

Takeover plan. He actually worked 2012-2015 and didn’t formerly retire until 2015. There are a couple of other parts who are by aggregation, owners. The Plan is Non-PBGC and is about 125% AEQ overfunded. Its about 140% AFTAP/HATFA overfunded. The 2012-2014 distributions were RMDs. It seems legitimate that at his age in 2015 he would be given retirement paperwork[which included a lump sum option], execute same and go home. But something nags me about this….any thoughts???

I know a Safe Harbor Match of 100% of deferrals up to 6% of pay is permissible, but I've never had someone ask that a Non-Elective SH be 4%.... Realistically, you could just have a 3% NE SH and a fully vested 1% discretionary but then they'd go into different buckets in the R/K system... Thoughts would be appreciated.

No the 2016 contribution was for 2016.....so not yet deducted.

A CPA called me and said Solo has adopted a SEP in Jan, 2016 and immediately funded it. Now wants to do a CB Plan. I called my brainy Tax lawyer and he immediately responded that the code says that the adoption of the CB plan will disqualify the SEP and the $53,000 will be disgorged by the IRA….No implications…he said that the adoption of the CB plan disqualifies the SEP not the other way around. While I am thrilled by this, I am interested in hearing any comments….

Mike, I said Plan uses Elapsed Time...why do you keep saying 1,000 hour rule.

OK Mike, I absolutely respect your opinion. So a Plan has an elapsed time definition of Benefit Accrual.Service... Two employees each with annual pay of $100k start participation after meeting the eligibility scheme on Jan 1, 2016.One terms on Mar 1, the other terms on Dec 25.The Plan is a CB Plan with a pay credit of 10%....please explain to me what pay credit you would award each of them. Assume the plan has full vesting.Thanks in advance.

This plan doesn't have a last day rule provision, I just posted that as being from the FTW doc. it is an elapsed time plan that defines a Year of Benefit Accrual Service as an elapsed time Period of Service, that is 12 mos.....if you don't have a year of accrual service you don't get an accrual.

We were just provided an actuarial report prepared by a decent sized actuarial group in California on a small CB plan, where the prior actuary calculated AVA and included substantial receivables....does anyone know of any circumstance under which that would be permissible.

Does anyone know of a stock valuation person or firm that would perform a valuation for a 250 employee company for a reasonable fee....they are looking for a long term relationship.

Well, you'd be wrong -- here's what the FTW Plan doc says.... This is straight out of the Plan doc A Participant meets the service requirements for Principal Credits if he or she is employed by the Company on the last day of such Plan Year, or he or she completes at least 12 consecutive calendar months of service. In order to determine the number of whole years of service, nonsuccessive periods of service during a Plan Year and less than whole year periods of service during a Plan Year shall be aggregated on the basis that 12 months of service (30 days are deemed to be a month in the case of the aggregation of fractional months) or 365 days of service are equal to a whole year of service during such Plan Year. An Employee will also receive credit for any Period of Severance of less than 12 consecutive months, subject to the exemptions, terms and conditions of DOL Reg. section 2530.200b-9.

Consult your Plan doc provider [FTW,Sungard,Datair, ASC,etc]...I think you'll find all require point to point employment under elapsed time ....even for vesting.....consider the 1,000 hour rule...there isn't any fractional accrual for 999 hours.

I think you're mixing metaphors...I agree with what you say regarding vesting -- but benefit accrual is based on Plan years of Participation in a Cash Balance Plan, so no issue there in my opinion...