Bri

The potential 10% penalty tax if he's under 55 and can't roll in the amount by his tax deadline.

Sure - many plans allow loan balances to be rolled over, even if they become due and payable upon termination of employment upon a separation from service with the plan sponsor. (And yeah - definitely make sure the buyer and its plan are cool with accepting such a rollover and can arrange for a new payroll deduction agreement, etc.)

I had a 3-week turnaround back in January for a new plan, but then a February submission is still in their pile.

You would want an amendment to indicate contributions would not be permitted going forward, and a Summary of Material Modifications. At least there's no 204(h) notice, but of course the employees should find out the easy way rather than the hard way that there's nothing else coming out of their paychecks.

Hmmm - we're actually still standalone. I suspected it might be more time consuming to look up how to get Crystal to compute the APRs on the fly, which is why I went with a cheap list of "if age = 68, divide by..... else if age = 69, divide by.... etc." Does that Crystal report from Relius do the interest AND mortality calculation internally? The financial functions only seem to do interest. I'm just imagining trying to link the mortality table values and doing some recursive algorithms from AA through age 120 would require my pay grade to be increased substantially!

Austin, I was actually off BL later Friday, trying to create a bunch of if-then statements in a Crystal report to define the APRs for ages from like 67-90 in order to get custom Relius reports to do the divide the rates into the Sum({rpteeacct.endbalamt},{rptee.ssnum}) field.

Data entry -> Tables -> Actuarial -> Table Entry When the window comes up, choose "table type" of Mortality, and then scroll through your list of Available Tables. CBZ's spreadsheet still had the 2021 mortality table in there.

And of course, it's easier to justify something less than 0.5 if there aren't HCEs getting 10% for themselves.

That looks right, the unisex table on the far right (spot-check matches what I have in Relius)

ooh, right, sorry - misread the year in question. (Was dealing with reaction from booster shot)

The IRS usually puts it in a PDF, which isn't great, but if you don't already have software with it preloaded, a search for "YYYY applicable mortality table" should do the trick.

I agree, it might be tough to pass the blink test such that it's not abusive.

https://fred.stlouisfed.org/series/DGS10

(I'm curious if anyone else issues with the "this feels like dirty pool" tactic of spiking known-unvested terminated employees' allocations. It's not really the same as doing an -11g amendment, because the plan already allowed for the allocations, but boy it kinda smells the same. Does anyone have experience with IRS examinations of this kind of fact pattern, where the employees were eligible but the sponsors knew darned well it was almost an abusive free pass on the testing....)

I found a daily update to the 10-year CMT rate on what seems to be the St. Louis branch of the Fed's website. But yeah, you'd update the applicable mortality table annually, and pull the CMT rate as of the first of each month as appropriate, and a spreadsheet can do the calculations.

Doesn't the rule of parity require a minimum of 5 years? In which case, by the time you know you could exclude the years, the 5th anniversary has already kicked in anyway? I did enjoy thinking about a "Narnia closet" for those excludable years, though.

They would be on the new schedule, since they weren't a participant yet as of when the vesting formula changed. Much as coffee is for closers, vesting is for participants.

I was under the impression that the contributions are deductible (and part of the typical 25% limitation) but the earnings amounts are not.

Well, you can, but you do have to amend the plan up to 9.5 months after the end of the year to provide for the increased benefit.

Not necessarily, as I'm finding out. (Oh we hired someone and didn't realize they became eligible at their anniversary date last year....)

I figured this was a brand new plan, maybe with a 3% or smaller ICR, and then the employees are all more than 20 years from NRA, so their benefits are getting discounted at 3.29% for Dec. 2021. So you end up with a smaller normal cost than the allocation credit, because all those years at 3.29% are going to overcome the 3.00% rate expected to tack on for such a long time.

This also could blow up if the HCEs haven't gotten to 6,500 yet but are 1973 or later births.

Ooh! Is there profit sharing? How about doing a QNEC to some HCEs in order to cause the actually-refunded amounts to be correct after all and see if you still pass 401a4? (I'm not feeling well today. Sorry.)

Why can't they return the excess?

I've heard a couple of webinars in the past month or so indicating this was something that "didn't make it in" to "Secure 2.0".