Bill Presson

02/24/23 Federal Register re: Annual Information Reports

1. BG, the $15k for 2022 would not be a TH contribution, but a contribution to 2022 to avoid TH in 2023. 2. what is happening to possibly trigger a needed TH contribution for 2023?

I'm guessing Ms Nicole means another 401k account. That's typically what happens from the QDRO paperwork. The distribution requires another set. I don't understand the "not talking to you" part because once that account is set up, you're a participant in the plan, just like your ex.

1. Assuming he's not making deposits based on draws through the year and only deposits once, that really is his only pay period. 2. With that said, I really don't like when employers don't do a true up and I would highly encourage him (if he was my client) to do a true up. The employer needs to have budgeted the full match anyway and an employee shouldn't be harmed if they have to structure the timing of the deferrals differently through the year.

318 doesn't apply to controlled group attribution. That's 1563. This is very helpful: LFG controlled group link

Was told it would be the end of February.

Hope so as well. We've got a handful that we've done the termination amendment and we're waiting for our document provider to update the full term package.

If they are working, the insurance can stay in place past retirement age. If they terminate, then it has to be surrendered or distributed at retirement age. If they've been gone for awhile by that time, you need to make sure the premiums are still within the incidental limits or the premiums become taxable distributions at that point.

Our basic plan document includes this in the Plan Compensation section "Plan Compensation generally includes amounts an Employee earns with a Participating Employer and amounts earned with a Related Employer (even if the Related Employer has not executed a Participating Employer Adoption Page under the Adoption Agreement). However, the Employer may elect under AA §5-3(h) to exclude all amounts earned with a Related Employer that has not executed a Participating Employer Adoption Page." I'm pretty sure it's in other document providers BPDs as well. It's my understanding that this allows that compensation to be included for testing without it having to adopt. If there are NHCEs, that's a different issue.

If you use this, you'll be good with most situations. There will be some changes in 2024. https://www.lfg.com/wcs-static/pdf/Attribution of Ownership in Retirement Plans - PDF.pdf

Amend to a safe harbor non elective plan for 2023.

I would step away from the table and let ERISA counsel step in.

Because there's nothing to amend in the document. The last day/1000 hours are imposed by the sponsor, not the document.

I haven't seen any answers yet either. I don't really understand the need for this when plans can just allow for in-plan Roth conversions.

I got the same thing. I appreciated Bob giving that example.

Agreed.

Not sure I know what you mean by "forfeited." Please explain. The solution is for the sponsor/trustee/fiduciaries to negotiate funds in a share class with lower or no revenue sharing.

They already have a plan. And based on your post, the employees are likely already eligible.

FWIW, we do back office actuarial work for a lot of TPAs around the country. Some with lots of plans and some with only a few. Let me know if anyone is interested.

Agreed Austin. I was against most of it from the first time I heard about it.

Ascensus does a LOT of business unbundled. We've got a lot of clients with them. Send me a message and I'll put you in touch with the head of their TPA relationship group and he'll help you make it so.

So, the policy was surrendered while still owned by the plan and the cash value was deposited into the annuity while still owned by the plan? Then there's no distribution and no taxable transaction. It's no different than selling a mutual fund and depositing the money into a money market account. Also, to be clear about the broker's comments: there was no "distribution" (as we use the term) and the money wasn't "rolled" (as we use the term).

Agreed. But I don't think that was the original question.

Peter knows what you want to know Arthur. And you know what the answer is too. He was pointing out that the CPA knows as well and that's why they are hesitant to act.

How was the annuity owned when this happened?