Bill Presson

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?

I always recommend using the relief programs provided.

Yes, the new practice can adopt the plan as the plan sponsor. Have old EIN adopt as participating ER.

1. I hated this provision from the moment I heard about it. We shouldn't be anywhere in this mix. 2. How does Congress think an emergency savings account as part of a plan is going to be cost effective? Not sure about others, but we're not planning on giving away our time. 3. I don't know the answer, Peter, but did I mention I hate this whole idea?

Eligibility/participation in the plan doesn't eliminate controlled group status though it might give you more coverage flexibility.

Perhaps. I've never had anyone look to do that, so I haven't researched it. But if someone really wants to keep the life insurance in place till they die, they need to get it out of the plan. And that ideally would happen 4-6 years after it first went in the plan. After that, it's a costly exercise.

Correct. K-1 from an S Corp is payments for being an owner. It's like getting a dividend check for owning stock in IBM. It's not earned income.

Our efast people got this today. I think it's legit but current people don't have to do anything for several months, so I'm waiting.

Also, if it's only the owner, what difference does it make if it's matching or non elective? The 415 and 404 limits will impact both the same.

Agree with Ms Bri. I don't have a reg cite, but look here: https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-notices Midway down the page is this: Notice when the plan is amended When the plan is amended or when the information in the Summary Plan Description (SPD) has changed, participants should receive a Summary of Material Modifications (SMM). The SMM would generally include changes to the following: name and address of the employer, plan sponsor, plan administrator, trustees; collective bargaining agreements; vesting; eligibility for participation & plan benefits; circumstances which may result in plan disqualification; circumstances which may result in denial or loss of benefits or ineligibility; plan year-end date; and benefit claim procedures and remedies available for denied claims. The SMM must be provided no later than 210 days after the close of the plan year for which the modification was adopted. The SMM or changes in information in the SPD don't need to be furnished separately if the changes or modifications are described in a timely SPD.

The ASD is essentially when the participant gets money out of the plan. So you can maintain life policies for terminated participants as long as they don't take their money out (as a lump sum or an annuity). With that said, the policies still have to meet the incidental rules to avoid having the full premium be considered a taxable distribution. For a terminated participant, that's difficult because there are no new contributions. You'll also see in 10.08(a)(4) and (5) some exceptions to that incidental rule. I'm always fascinated with the language in the documents that say "in these circumstances, you can just ignore the incidental rules" because they never clarify why you can do so. It's because when you don't satisfy the incidental rules, the entire premium you pay is an in-service taxable distribution.

Then make sure what the amendment says. If the amendment was specific for that eligibility, then you don't get anything else, unless top heavy.

Sounds like you would share based on whatever the allocation rules are then.

1. is the plan top heavy? 2. Is everyone in their own group? She has some flexibility perhaps, in amount, but if both are yes, you will probably get at least the TH and a gateway bump.

It's the government and they're here to help you.

It's effective for taxable years beginning after 12/31/2022. Don't think it will matter when it's adopted.

I've seen it used for real estate agents and for liability attorneys. In both situations, they were making about $100k every year, but every third year or so, they would make $500k, so the increased pay credits were set for above $150k, if I remember correctly. Obviously limited to max comp for the year.

Having a zero compensation employee has been pretty rare in my experience. I've seen it where an owner just doesn't take compensation because of the business economics or when an employee is on some kind of leave of absence. But in that case it would be 12+ months and that's unusual. What other employees aren't getting paid, especially a "substantial number?"

Also, the plan can't be a safe harbor plan because deferrals weren't allowed starting 10/1/22.

Thanks. I remember that being an issue (don't remember details), but I don't work on IRAs.