Bill Presson

Congratulations! I know it’s eventually going to happen to me but I’m fighting it right now. 😇 Hope you get to enjoy it for a long time!

Happy Thanksgiving to all my BenefitsLink cohorts! We’re closed for the week (but I did help a few clients with some amendments—don’t tell on me), so this is a week to recharge. Hope everyone enjoys family, food, and football!

Derrin, I’m so very grateful for everything you’ve done for the retirement community and, especially for me. Without you (and Doug Jolley), I can’t imagine having survived the early difficulties in what became my career. Starting my own business way before it was rational to do so, I leaned rather heavily on PIX just to keep my head above water. Thank you, though that is woefully inadequate.

1. Why do you want to do this? 2. Are you thinking you can do a discretionary match only for the HCEs?

Also, you can just restate a MPPP as a PS or 401(k) plan. Why create a new plan and merge?

If it’s an asset sale, the plan can continue as long as the employer wants it to continue.

File under DFVC and lay the penalty OR just reduce your fees by the same and have the client pay it. As long as you don’t have a letter from the DOL, you’re good.

It doesn’t say “first” or “up until”. You’re adding those things. Things generally happen in order. let’s say someone makes $2,350,000 per year and defers 1% of pay each paycheck monthly. The match formula is 100% up to 5% of pay. The person would defer $1,958.33 each paycheck and receive a match of the same. Again assuming the document is not written stupidly, that would continue during the year. The payroll would need to be setup so that deferrals stop when reaching the 402(g) limit (not the comp limit). It would also need to be setup to stop the match when it reaches $17,500 because that is 5% of $350,000 and the maximum allowable match. At the end, the $350,000 comp limit is applied. But it’s not required to be the first $350,000 earned.

Unless the plan is written poorly, the a17 limit is just applied when tested at the end of the year. Also, the 402g limit is likely to put the cap on any match far ahead of a compensation limit.

I question whether it is possible for a plan to fail coverage the way you have described. Show the numbers for the test.

A SIMPLE IRA has to be the only plan sponsored by the employer. https://www.irs.gov/retirement-plans/retirement-plans-faqs-regarding-simple-ira-plans

EZ late filer penalty cap is 3x$500

Correct the address.

Ken is right. It would be much easier to never rehire a terminated participant.

A SIMPLE IRA has to be the exclusive plan for the employer (which equals both entities), so I don’t see any of these examples working.

I disagree with this. If it's an asset purchase, the seller will continue on and can maintain their plan with no impact on the buyer's plan (old or new) whatsoever.

I can’t envision a circumstance where an RMD isn’t required.

Always need to be careful of looking at equivalencies in the document for salaried people if actual hours aren’t tracked. Just a word of warning. I would be very nervous about being told that a typical owner of a business hadn’t worked 1,000 hours in that business by September.

https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/resource-center/advisory-opinions/settlor-expense-guidance

Probably "60 days of service..." instead of "90 days of service..." would work better. 😇

Typically the merger of plans is based on the transaction date of the sponsors of the two plans. I’ve never seen plan custodians (RKs or BDs) able to make a merger/transfer of assets happen on that date. Maybe you have. Just not the world I’ve inhabited. So having the plans merge on X date and the assets transferring within a reasonable period after that just hasn’t been a huge issue.

Also, people often miss that the after-tax money has to be deposited within 30 days after the end of the plan year to count for 415 limits.

Typically one would remain the sponsor of the current plan and the other would spin off into its own plan. The spin off would likely be a short plan year unless crafted carefully at 1/1. But that’s just the way I would have done it.

Why/how is she eligible to be forced out?

FWIW, and I understand this isn’t helpful, I despise everything about this rule; especially the application of the unique compensation amount.