AndyH

I did each of Rick's courses and they were excellent. I think he's only doing EA1 now though. And yes Dave's materials are also excellent.

I would default to using the plan's target liability for funding purposes (or for 404 purposes). Remember the 110% must be satisfied after removing the distribution from both the assets and the liabilities.

Well if the sponsor and the plan have the same year end and the sponsor has an extension to file it's tax return, I believe that extends the 5500 due date (for up to 2.5 months). Obtain and keep a copy of the business extension. Check the 5500 instructions for the details. You could be Lucky.

Don't hold your breath. Submitted one January 2020. Did not get a conclusion until October 2020 (week of 5500 and contribution due date) and only after outside pressure was applied. Exempt.

All good advice. As to the question of whether you can simply allocate excess based on AB's and PVAB's the answer is no if you don't know the basis. If the plan was integrated, for example, back in the day the concept of (prohibited) double integration would apply. As Effen said the allocations must be non-discriminatory so that must be demonstrable.

Thanks for the response. It's a very small plan (with a high HCE concentration) within a controlled group that includes several companies including one with thousands of participants. We did figure out a way to make it pass, but it's swimming upstream and will eventually fail without politically difficult corrective action, so I was trying to understand all the options. Strange that a determination letter can't be obtained in such circumstances.

Can you amend the plan (for actives) to eat up the excess? Effen is right about the 5 year wait.

One plan of a controlled group fails the safe harbor percentage test of the ABT but meets the unsafe harbor percentage. It would seem to meet much of the "Facts and Circumstances" criteria of 1.410(b)-(4)(c)(3) but that is uncertain unless "the Commissioner finds...." that it passes. Am I correct that a Determination Letter still cannot be requested on this issue for an on-going plan? What if an options exist, a Private Letter ruling? Is that practical?

I don't agree that a short year means $0 income because it is earned on 12/31. There is P&L for that period. If for some reason instead of a short plan year the owner had a short tax year, there would be income for the short period. It is just unknown without going through all the calculations. My two cents

Put your inquiry in writing, addressed to the Plan Administrator, who should be defined in the plan document or SPD. Explain who you are and ask why you cannot start your benefits currently. That starts a clock by which they are legally required to respond timely, presumably by someone with greater knowledge than those in the call center, or you can then seek help from the DOL or file legal action if necessary.

Geez you must be old! lol. (I'm almost there myself)

Right

If they missed the deduction deadline, the deduction is $0, not $200k. For the SB, you can put $150k or $200k; but at least the amount to avoid a funding deficiency. Hassle either way for 2020.

Says under Maintenance

Lou describes it well as usual. But I'll add that it also obviously works for NHCEs. (including situations involving Top Paid Group election or first employment year for example)

That's a typical actuarian comment.

I guess I'm not sure what the question is/was then. I was trying to say that I would be skeptical about providing a year of service in a year in which there is no compensation.

Mike would know if the thinking has changed, but one thing that has stuck with me for many years was when Jim Holland said at a conference years ago something like "No compensation? Not in the test. ANY test". So that's my rule.

If the participant is an HCE and it is being offered to him, other participants would have to be treated similarly.

Then you might not have a terminated plan, in which case you cannot distribute assets. You better find out the facts and make sure the delay is defendable, or else restart the termination and do the necessary interim work. Also, was/is the plan subject to PBGC?

I'm not disagreeing with anyone but many years ago I called PBGC about this issue when the process was to call or email and was referred to a lawyer at PBGC who I will not name. After a long winded conversation it became clear that he did not know the answer. He told me "the number that's on the form. I don't complete those forms". It was the same issue - someone technically a participant with no benefit, who would not be in the count on the form. So I actually posted on this board and the consensus as I recall was to count everyone technically eligible whether or not they had a benefit. So this highlights the lack of a clear answer without a coverage determination IMO, especially now that the DC deduction limit is affected.

The opposite situation also can occur where a prior year AFTAP was above 80% and the current year might be below - or presumed below (could be because of a delay in making the prior year contribution or not), and one might not want to issue the notices etc. and instead rely on the prior AFTAP, which is probably the intent of the law.

And how does that translate to the SB?

We are assuming this is a DC plan, right?

Good luck. My message (from 2 weeks ago) was not even read, never mind responded to.