Bill Presson

Couple of thoughts: 1. He won't be an HCE until later in his employment (not sure of his pay in 2022). 2. If he's eligible, he has to get a top heavy minimum (I would assume).

Unless you're doing a whole bunch, it's likely not worth whatever effort you make. You can probably code the whole thing in FTW in an hour+.

Well it's not a QDRO when the plan first gets it. The Plan Administrator has to determine it's Qualified and most plans have a process by which that happens including notifying all parties. I recommend following those procedures.

If Pennsylvania doesn't tax retirement plans, then the basis would be irrelevant.

How is #2 "Fees and expenses for...investment management.." not a "management fee on the investments"??

I didn't realize this. Wow. That would suck to contribute during your working career in Pennsylvania and not get a deduction and then retire to a state that does tax the distribution (which I understand Pennsylvania mostly doesn't).

For a firm that had an ongoing document maintenance fee, they might not charge.

Then Bank should not have opened the account. Good grief. Did they use the corporate EIN or at least use the TIN? Likely nothing will happen, but it's stupid to me.

If X acquired Y, your best bet is to likely take advantage of the 410b6 transition phase. Leave Y alone and keep the plan in place until the end of the year. Start a new plan for X if you wish. Then merge them and turn the safe harbor off for 2023. That's just one option. The best option would have been to make all the decisions before the purchase.

As others said, it's quite common to have 2 plans in this situation. Employees covered under a collective bargaining agreement aren't required to be included in the testing of your original plan. Still, the sentence above confused me.

Yes. Receiving an IRS letter does not disqualify an employer from using DFVC. But don't wait around too long.

The old volume submitter plans are now non-standardized prototypes under the C3 version.

From a NY SHRM site that I'm assuming is accurate but I don't know for sure. Who Does This Apply To? The program applies to both nonprofit and for-profit employers in New York state that meet the following requirements: The employer has not already offered their employees a qualified retirement plan including, but not limited to, a 401(a), 401(k), 403(a), 403(b), 408(k), 408(p) or (457(b) plan, in the last two years. The employer has at least 10 employees in the state over previous calendar year at all times. The employer has been in business for a minimum of two years.

Excluding bonuses is considered reasonable within 414s if it doesn't by design discriminate in favor of HCEs. Passing the test shows that it doesn't. You're good to go. Here's a link if you want. Compensation definition

I don't see it as an issue.

I think the first choice is easier. Just make sure Plan B provides service credit and has an appropriate entry date (all as needed) You'll then provide the Plan B SH notices to the Plan A participants to enroll. When you merge the Plan A into Plan B, you're still creating a short plan year and 5500 filing for Plan A.

For terminating plans, we're doing the C3 and then a plan term CARES/SECURE amendment package provided by our document provider. It's a comfort thing. Especially if the client doesn't want to go in for a letter, which they never do.

Lou is correct. I do think the owner has some flexibility in which company he's recognizing the compensation. For example, he could just assume it's pro rata compared the the actual comp. Or he could use all the the comp from 1, all the comp from 2 and just the remainder needed from 3. As long as it's all reasonable.

Belgarath is correct (of course), but the client needs to remember that every CPA firm starting an audit for 2023 is still going to need to get comfortable with their beginning balances, etc. They won't do an official audit, but they will spend a lot of time reviewing the 2022 (and likely prior) year's data.

This is from our basic plan document: If a Participant has both a Pre-Tax Deferral Account and a Roth Deferral Account, the Participant may designate the extent to which the corrective distribution of Salary Deferrals is taken from the Pre-Tax Deferral Account or from the Roth Deferral Account

This is very common and very frustrating. Because we can almost always make things work if given the chance ahead of time. With that said, what kind of sale was it (asset/stock)? Was the plan terminated before the sale?

Agree with Lou. Just had a very similar issue and we did extensive research to try and get that stopped a year early. No luck.

Remember that the name of the plan can essentially be anything they want. We had a client that just wanted "Retirement Plan" so that's what we used in the documents and on the TIN application. Everything has worked fine. Also had another large professional group (doctors) where the firm name was consistent, but turnover in the ownership group. They made an application to the state board of financial institutions and received approval for the entity to be the trustee on the plan. Rare, but worked out well. They could also just choose to go the corporate trustee route. The cost is likely much less than fees for plan/trust amendments and their time dealing with it.

While it's been wrong for awhile, has it really impacted anything that would require this? Have any distributions been wrong?

Whomever is giving you this "thinking" doesn't need to be advising on the technical side of retirement plans.