ETA Consulting LLC

Correct Correct, but read the plan closely to ensure this provision for the one year wait on rehire exists. Remember that all 'previous' service is being restored since the rules of parity doesn't eliminate the service (because they weren't zero vested when they previously left). Good Luck!

Only after they've worked for your client for one full year. Remember, the definition of "Leased Employee" requires the services to be performed 'on substantially a full-time basis' for a year. Until such time, they will not be counted as "leased employees" under your clients plan. However, after such time, they will be. Provided that these leased employees perform services for only your client, then 'any' contribution they receive under the leasing organization's plan will be considered as contributed by your client; so you are correct. Good Luck!

Technically, the deemed distribution was correct. The IRS has recently held the Participant is responsible for ensuring payments are made (e.g. Participant cannot should've expected payments to be deducted from pay checks and questioned it when it didn't). Given this, I would say VCP to attempt to get the loan (un-defaulted); since the way it was done was 'technically' correct. Good Luck!

Yes, if C doesn't take over the "B" part of the plan. The IRS rules extended to the "sale of a subsidiary" when determining a severance from employment; so that it would be treated simular to an asset sale. Good Luck!

Correct. The first distribution must happen between 1/1/2012 and 4/1/2013; so he can take it in 2012 to avoid two distributions in 2013. Good Luck!

RBD is 4/1/2013 for the 2012 RMD. You would use the 12/31/2011 balance. Good Luck!

Loan payments, deferrals, & employee after-tax contributions are treated the same. They are all amounts withheld from employee paychecks and should be separated from Employer assets as soon as administratively feasible. Good Luck!

Pushing the "Like" button. You're correct, especially since there are individuals already deferring (so there would be no lapse). I was merely stating the parameters (rules). Good Luck!

No, all you have to do in ensure you terminate your 401(k) plan by December 31st, 2012. A SIMPLE IRA for 2012 is not an option for you (due to the exclusive plan rule for SIMPLE IRAs). Terminating your 401(k) in 2012 will allow you to start a SIMPLE IRA in 2013. You must, then, ensure you establish your SIMPLE IRA by October 1, 2013. There "may" be a implication by terminating your 401(k) within 5 years, but this shouldn't be a major issue given your situation. You don't want to do that. It's too easy to just open the SIMPLE IRA when you are ready to fund. You will not be able to leave them in the 401(k), nor transfer them to the SIMPLE IRA. You would, however, be able to roll them over to an IRA. This is unfortunate, and happens too often. Good Luck!

Pushing the "Like" button. That is the issue; I can respect that.

I don't think this analysis is worth "paying for"; as it is not that complicated. Instead, I would recommend the analysis as necessary for the Advisors to win the business. When there is discomfort to the owner resulting from receiving conflicting information (with no details on why certain answers are provided), then the incorrect approach has already been applied. Heck, I'd do it for free given a detailed census; it just isn't that complicated. Obviously, the quick 50% calculation would change as the number of HCEs change, but the math being applied is simple division. Good Luck!

No issue; this is actually a common practice. Especially when the additional costs for administering another plan is compared to the savings from not having to perform the "large plan" audit each year. Just ensure the appropriate non-discrimination tests are passes with respect to the separate plans. Good Luck!

This is far too bold a statement. I can easily see census and benefits such that each entity can have their own plan. You need an analysis from somebody who knows what they are doing. Pushing the "Really???" button Obviously, had any professional on this board (or anyone of our caliber) been involved, the question would've never made it to this forum. Apparently, Wesmon is being told different things by two different advisors while neither one is taking the time to explain "how" they arrived at their conclusions. When you have two companies (each with 20 employees) being owned by one person, and the plan is established covering the owner and only one of those companies, my quick calculation was a 50% coverage ratio. We all know what is possible as you perform more elaborate levels of testing, but this quick analysis was the basis for my statement. Good Luck!

You, apparently have only 50% of your NHCEs benefiting from "A (which I presume is entity X)" while 100% of your HCEs benefit. This would seem to fail coverage. While the planner is "Technically Incorrect" he has a good point that you wouldn't have this issue if the plan were offered to both companies. This is not true. There is no controlled group or affiliated service group. However, if this "Entity N" is formed merely to provide management services to (A, or B, or A&B), then you would be in an affiliated service group (Management Group). The planner who states each entity can have their own plans should be avoided. He has totally dropped the ball. While the other plan who states all entities should be in the same plan is incorrect, he is approaching your situation correctly. Before you establish a plan, you must identify the "Employer" with respect to the plan being established. This means you must perform the controlled group and affiliated service group analysis (which is what the planner was attempting to do, even though his analysis is a bit flawed). After you vet 1, 2, & 3 above and get all the relevant facts correct, then you can tackle this. Good Luck!

Despite receiving the refund, the Key Employees Annual Additions under Section 415 is still $5,000. Remember, excess employee contributions are still annual additions. You could look at having the employer contribute a 3% QNEC to the plan (including the Owner) and received only 1% refund from deferrals. Good Luck!

I would say yes, since the plan actually covers "Key" employees that are part of the required aggregation group (who actually benefited from the other plans in addition to the Safe Harbor 401(k) plan). Good Luck!

This is a very conservative interpretation, but I'd (respectfully) disagree. They are not actively partcipating, nor entitled to any future benefit from the plan (since the balances are zero). Given the fact the plan is frozen, there is no "eligibility to defer in the current year". So, my only count (under these circumstances) would be those with actual balances; since there is no active participation (nor eligible but not deferring) in the plan year. Good Luck!

He's still a key employee with balances in more than one plan. As soon as he meets the definition of Key Employee, then any balance he has in any plan should be counted as key; that's how I'd do it. Good Luck!

Pushing the "Dis-like" Button. Borderline inappropriate. Sometimes it's good to have a discussion, even if the topic being discussed is a moot point that is far in left field. In many instances, there is still something to be learned (i.e. deductibility) which doesn't necessarily have anything to do with the original post. In the end, we get stronger by being able to engage in the conversation and express our ideas while building each other up; not tearing each other down. Pushing the "Like" button. This is why I immmediately went to the deductibility argument. That would appear to be the primary reason a plan that is not otherwise subject to PBGC protection would want PBGC protection; not for the benefit, but increased deductibility. That's not a waste of time

The plan's terms usually address this issue; as the method in which forfeitures are allocated are already there. Even in a plan start-up, you wouldn't want to have forfeitures allocated in a manner resulting in small balances to non-deferring participants. This is a practice despite plan termination. Good Luck!

It was a light-hearted statement written to explain how a series of events could be structured in order to circumvent written rules. For innstance, ERISA protection would not extend to an individual who goes out and heavily funds an ERISA trust to shield assets when he is in the process of being sued (despite the fact that ERISA trusts are protected from suits). It's just a statement that anyone in such position would definitely want to perform such transaction for reasons contrary to the original design of the transaction. So, my point was that a one-person company where the owner makes millions per year would love to set up a DB plan and have it subject to PBGC coverage. The advantage would be that the PBGC coverage would allow the owner to fully fund a DC plan ($55,500) in addition to maximizing the DB funding. My statement was merely explaining how a PBGC rep would look at it and ask 'why not pick up the additional plan and receive more premiums' while the IRS would challenge the convenience of increasing a deduction to a DC plan by picking up a relatively premium for PBGC coverage. Again, it was a light-hearted statement explaining how small steps to circumvent rules may lead to a free-ride that anyone would enjoy; a no-brainer. Good Luck!

Sure. There is an additional test (non-discrminatory rate based on effective rates) with respect to those deferring 2% or less, but that shouldn't be too difficult to pass. Good Luck!

The PBGC rep's statements would be a bit shortsighted as the desire for a one person plan to do it is primarily for nefarious reasons. A one-person plan can automatically exempt themselves from the combined plan deductibility rules for DB/DC; a no brainer. I would imagine the IRS would challenge this as gaming the system (but that would be an interesting case). Good Luck!

You're saying it is "debt financed property" in the plan. Before I go there, I'd question what is going on with the procedures to allow that. Did a trade go through and the ACH to the employer's checking account fail to go through? A process failure wouldn't immediately become a major compliance issue if corrected immediately. But, the practice of arbitrarily making purchases without attempting to have the funds available could create an issue. Good Luck!

The Plan Document 'should' define exactly what it is and the vesting rules that apply. Good Luck!