Bill Presson

Jak, First - it would have to be in the document before the start of the plan year. Second - all depends on the numbers and we didn’t get any. Third - if the owner has w-2 in excess of the comp limit even after the bonus is excluded, the answer is very likely that it would fail.

For the calculation, no. For understanding the calculation and not screwing it up that one year the w-2 IS lower? Yes.

Assuming your post is accurate, the w-2 comp from the s corp is the only earned income for the docs and the person saying otherwise is wrong and needs to start over in pension school.

It’s not safe harbor meaning it eliminates ADP testing. Just means no a4 testing on the profit sharing allocations. The deferrals have no impact on the PS allocation. It will be something like: 1. everyone gets equal percent up to 5.7% on all compensation 2. Then anyone with compensation in excess of the TWB gets 5.7% of that comp that doesn’t exceed the max limit. 3. then any remaining PS money gets allocated pro rata for everyone. this assumes all eligibility and allocation requirements had already been applied.

It is a “safe harbor” allocation meaning there is no a4 testing. The allocation steps will be in the document.

Link updated and happy to have it still. I liked the acknowledgment of Ms Carol’s contributions on the page. Well done Bakers!

Dave, It works fine and I’ll update my icon/link. I did really like the button she had at the top to choose how many years or what years to show. But this will still be a time saver. I really appreciate y’all taking it on and Ms @Carol V. Calhoun for being gracious enough to allow it.

BTW, my wife just said you becoming a volunteer EMT at retirement age is one of the coolest things she’s ever heard.

Tell him to roll money back in so it can be distributed. If he doesn’t, issue the 1099s showing some of the money can’t be rolled over and cause him some heartache.

Well, this would be a wonderful thing!

Ms Carol, I don’t blame you but this makes me very sad. That page has been saved as a shortcut on my iPhone for years. I’ve referenced it countless times. Many, many thanks for doing this and saving me a small amount of brain space to use on other issues. I hope retirement is wonderful and lasts a very long time.

A lot cheaper and fewer issues to add the $7k cash out isn’t it?

After tax contributions have to be deposited by January 30, 2026 to be counted for 2025 calendar year 415 limit.

Attribution for HCE status is under IRC 318. Attribution for controlled group status is under IRC 1563. Just based on the information you provided, I don’t see any way the adult children aren’t treated as HCEs.

Just do an -11g amendment to bring the terminated people back in to the existing plan. Now that will mean the contributions for those people would be deductible in 2026 and not 2025. It your testing would work. Make sure vesting is addressed. You could explore doing a 401b3 amendment and it might work here instead. But I can’t promise that as I haven’t waded through everything. But if it does, the contributions would be deductible in 2025.

Just to add to what Paul said - you will never get an in-kind transfer from one RK to another. All the shares are held in omnibus accounts.

Has to take it this year when the plan terminates.

I got the same EA email and am a little concerned. Just seems weird.

Peter, just because the document says everyone is in their own group, it’s incredibly rare to actually have to test more than a handful of groups. For example, everyone that is employed on the February date would likely be in the same group for testing. The plan definition just provides flexibility on how they are grouped.

Agree with justanotheradmin with one caveat: if the plan is top heavy, anyone employed on 12/31 will likely have to get a contribution whether they are employed in February or not.

Also remember that limit only applies if the cash balance plan is NOT subject to the PBGC.

Any way to amend the trust so that a single trust holds both plans assets rather than moving dollars? I would have legal counsel opine because I don’t know that it can be done after the fact. But we do know it can exist.

Removing the participating employer on the transaction date is fairly easily done. I can’t imagine “removing” the participants as of the transaction date. It’s either a distribution or a spinoff and that will all likely take way more time.

Happy Holidays from Alabama everyone!!

Did any key employees do salary deferrals? That will trigger top heavy minimums.