Bill Presson

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.

Does it allow for the withdrawal of Roth at any time? Likely not. Once he converts, it's Roth and not after-tax.

https://www.irs.gov/retirement-plans/plan-participant-employee/when-can-a-retirement-plan-distribute-benefits Not exactly a cite, but first thing I could grab in a pinch.

So, he could take PS money, but only if the plan allows for in-service distributions of that source and at that age.

And, I assume you mean a participant wants to take the distribution. Owner, trustee, etc are irrelevant to this discussion.

I think this was the wrong thing to do. You weren't filing a 2017 return. This was bad (stupid?) advice and you were wrong to take it.

Agree with Lou.

Correct.

Albany, assuming there is a refund, remind the HCE, that getting a refund isn't the worst thing to happen. The worst thing to happen is choosing to defer less and passing the test. Because that means he/she COULD have deferred more. Getting a refund means they deferred the maximum allowed by law.

John is correct if you're really talking about 2021. If you're talking about 2022, I would only choose option 1. The other two don't make any sense.

I recommend this: https://www.lfg.com/wcs-static/pdf/Attribution of Ownership in Retirement Plans - PDF.pdf

Couple of thoughts. 1. If you agreed to bill by the hour, then bill by the hour. 2. There is a value in the services that isn't tied to time. It's tied to knowledge and efficiency. One shouldn't be punished for being smart and working quickly. 3. If you bill less than estimated, be sure the client is aware. And remind them that things sometimes go the other way and you would still expect to be paid.

First, make sure you eliminate it for 2023 AND let them know if the plan is top heavy and what they need to do to avoid any TH minimum. At this late date, you aren't going to avoid the SH because you have to give 30 days notice and that puts you to the end of the year. Agree with Bri to see if you have leeway. We draft our documents so that the HCE SH is optional. Then start discussing a plan to make the 2022 contribution.

I'm just going to say that they need to either do a SIMPLE IRA or a 401(k). No one has listed anything.

We don't see clients do that.