Bri

I saw something that the old 2020 expiration date for the HATFA disclosure was just updated to 2034 for the ARPA impact. Since 2022 is the required start for the 15-year amort, and my plan didn't have a 2021 stabilized shortfall, I'm thern doing my unstabilized MRC based on 7-year because it's all hypothetical, indeed.

Does the plan document, SPD, or any "written administrative procedures" outline the specifics of what's expected to occur? My natural inclination is that when a suspension is lifted, deferrals should start right back up - but that's in the absence of any established, communicated, procedures to the contrary.

One plan for union employees, another for non-union employees? That's commonly done.

I like the argument that "getting your amounts early" is a benefit/right/feature. So if you miss one NHCE you probably still pass coverage on it.

If 2012-13-14-15-16 were five one-year Breaks in Service in a row, then I suspect the Plan Administrator did exactly what was supposed to happen. The agent won't question that - just let them know that the 100 percent refers to being vested in "the rest" of their balance after the forfeiture at the 5 BiS point.

Relius can do it. (ya know, because it's just one interest rate and not segments....) But I *am* surprised not to see any sort of printed-off list at this point with the factors based on interest/mortality required for a 12/31/21 statement. One column for the SLA and one for the QJSA presuming an identically-aged spouse.

Aren't those essentially dividends paid to the shareholder of the S-corporation? (And thus, not wage income - and taxed at a different rate, too)

Did the participant elect out of withholding? Is his state one where withholding is mandatory? RMDs don't necessarily have to have withholding. And absent an election, the FITW is generally 10%, but could have been waived by the participant. In which case there may indeed be no free throws pending.

^^^True, the limitation year definition is something to watch for here.

I guess in this case I'd suggest Box 5. I'd say add any 125 amounts to it, but if he's the owner then that's likely zero. Your 9827 number sounds like the S-corp medical, in box 1 but not 5, leads you to the 76K number as "income".

Is this a situation where the S-corp. 2% shareholder medical deduction is included in Box 1 but not Box 5? Typically I see this question when there are 401k deferrals showing up in Box 5 but not Box 1. This sounds like there aren't deferrals though, so the Box 1 number is the "gross".

Does the notice itself get modified, or do you just have better-looking numbers? (Smaller minimum due, better FTAP, et cetera)

I'm not Mike, but.... 1. No penalty, it's a corrective distribution with no "adverse" consequences other than not being able to keep the funds sheltered. 2. The associated earnings on the contributions through 12-31 must come out, too. (Or, investment losses would reduce the amount to refund.) 3. It can't stay as a 401(k) contribution - there were no wages to defer from. So if it's going to stay as a contribution to the plan it would be a nondeductible employer contribution, subject to a 10% excise tax to pay and remit via Form 5330. And it will continue to be subject to the tax every year until it can be absorbed under a future year's deduction limit. (If he ends up with a loss in 2022 he'll owe the penalty again.) --bri

I was trying to skim through my EOB, and I thought it was suggesting you can get away with no gateway, if the cross-testing is specifically just to pass the rate groups, rather than the overall average benefits test.

Right, you pass coverage but not necessarily nondiscrimination because it's a different nonelective contribution rate for different folks. Failsafe language in the document wouldn't help because you're not failing 410(b). So if your ABPT is a nonstarter in terms of hoping to pass, you're going to need to fix the rate groups for the HCEs by increasing the profit sharing for those NHCEs who got zero. Basically each HCE's rate group is 1/3 NHCE and 2/2 HCE based on their total nonelective contribution amounts. And yes you can impute disparity, so I think it should just mean a 7.38% PS rate for the zeros so that you get to 3/3 NHCEs. (2/3 NHCEs would have been okay if you could pass the ABPT but it sounded like those spousal deferrals are killing you.) Or, for another tack, you could try to cross-test the nonelective contribution amounts by themselves and hope you can pass both rate groups at 3/3. If all the rate groups are at 70% then you don't need to pass the ABPT.

It's not uncommon for a TPA to give a sponsor options - plain 3% SH, a "3 + 9" where it's exactly as you describe, and then a "5 + max" for small, medium, and large contributions.

One thing on this topic I never had fully spelled out - Let's say the guy has a 250,000 account balance and the RMD would be 10,000. If the plan is subject to QJSA and there's no consent, does the plan then take 10,000 and buy a taxable annuity? So the participant gets a 1099 for 10,000 in taxable income up front, but the annuity provider will then return to him some smaller monthly amount, maybe 100 a month, for the rest of his+spouse's lifetimes? (With those subsequent payments then no longer subject to further taxes since they were part of the annuity purchase.) The plan can't self-insure the QJSA so what's an alternate process for this situation?

If he has a W-2, that's the amount to multiply by 25% (not 20%). Should be 6,375. Of course, since that would be a 415 problem, he should limit the PS to 6,000. You definitely don't do self-employed calculations for an S-corp. shareholder as you would a Schedule C filer.

If the two firms didn't form a controlled group (including the laxer criteria for 415 purposes) then this would be fine to do. My old firm once had a client where a guy owned several restaurants but had a different partner for each one and it allowed him the 415c limit several times over.

In. Especially if you said he's actually receiving a 2021 allocation. Which he should, as that's still "415 compensation" for 2021 under your plan's definition. Definitely not excludable, since there are no allocation requirements to receive a contribution.

I think you're fine - "It's not discriminatory to stop discriminating."

Probably, if it's being issued under Code E for an EPCRS-related correction.

Thanks, Luke - That's what I was finding as well, that it only seems to get "mentioned" relating to 415. Was hoping indeed I just wasn't missing something.

Hi folks. Doctor does some 403(b) deferrals at the hospital. But he also has his own practice. (No deferrals for him there.) I know that the 403(b) deferrals count against the 415(c) limit under the practice's profit sharing plan. But would they also get included in the 401(a)(4) average benefits percentage test for the practice's cash balance and 401(k)/profit sharing plans? Thanks. --Bri

Part VI, #13 on the premium filing form allows you to indicate a final filing, with a checkbox to indicate why. I would assume some filing's due for the part of the year for the time it wasn't governmentally sponsored, right?