jpod

This absolutely can be done. See Rev. Rul. 2004-55.

I'll just say this: I have struggled with that exact issue several times over the years and I have never been able to get completely comfortable with the position that it is not an acceleration.

Is the CIC bonus structured as a short-term deferral? If so, I don't believe it is an impermissible acceleration. The payment this year may be in contemplation of a CIC and taken into account as a parachute payment, if there is a CIC, but the upside is that you've increased the base amount by 20% of the payment made this year.

The employer mandate threshold for 2015 is 100, not 50.

I had assumed that the family feared the worst, given the wife's medical condition. Therefore, how to protect the wife's account from a bad marriage (i.e., to a second husband who won't consent to waive the death benefit)?

The IRS' proposed regulations lists certain fields that will automatically be considered as service organizations, even if capital is a material income producing factor, one of which is "insurance." Is an organization that is a licensed insurance company that is in the business of issuing insurance included within the meaning of the "insurance" field on that list? I am asking because an insurance company is buying less than 80% of a service organization, so there is no 414(b) or © affiliation, and they will satisfy the other criteria for A Organization ASG status, but the point is moot unless the licensed incurance company is a "service organization."

Don't you have the same concern with the wife's account, i.e., husband dies first, then someone comes along to marry the widow and becomes the required beneficiary of the wife's account?

Can't you establish a market-rate interest-crediting formula, and then go out and invest in something perfectly safe and short-term but which pays more than zero, like bank cds? Even in this interest rate environment you may be able to get 2% if you go out 5 years on the CDs. If you have to cash in a CD before maturity to pay off a terminated participant, big deal.

You still need to review the plan documents and determine who gets full vesting at death: all participants or only employed participants. Like most of the other people commenting I suspect it applies only to employed participants, but you need to check.

Assuming that the plan document(s) is(are) not clear, which would surprise me, then the answer would seem to turn on whether the non-vested portion had been forfeited (properly forfeited, that is), prior to death. If no distribution was made, but there had been a 5-year break, i would expect the document to say that the non-vested portion was forfeited. If something has been forfeited it can't be "re-vested." Conversely, if it had not yet been forfeited, then it became vested at death.

I am giving mbozek the benefit of the doubt so I don't think he was suggesting any kind of threat. I think he probably was suggesting that they offer the participant some $$ or other benefit OUTSIDE OF THE PLAN in exchange for his agreement to sign off on a lump sum distribution for the amount which the actuary has determined is his entitlement. I am not aware of any reason why that would be problematic.

It has nothing to do with the son being a party in interest or disqualified person. The rule illustrated by the example would be the same if it was the fiduciary's girlfriend rather than his son. I suppose if you could prove to the DOL or a court that the owner actually hated his brother's guts and only hired him because he was the most qualified you wouldn't have a 406(b)(1) PT, but how likely is that?

Hiring the brother - if he will be paid with plan assets - is the poster boy for a self-dealing PT under 406(b)(1). See the following example from the DOL regulations. Example 6. F, a fiduciary of plan P with discretionary authority respecting the management of P, retains S, the son of F, to provide for a fee various kinds of administrative services necessary for the operation of the plan. F has engaged in an act described in section 406(b)(1) of the Act because S is a person in whom F has an interest which may affect the exercise of F's best judgment as a fiduciary. Such act is not exempt under section 408(b)(2) of the Act irrespective of whether the provision of the services by S is exempt.

Why wouldn't it go in Other Administrative Expenses? I think if the real esate is directly owned by the plan (rather than through an LLC, for example), the expenses should not be netted against income from the property.

In my experience, if a non-profit employer discusses the implications of 457(f) in advance with a competent professional it will know how 457(f) works and as a result will usually structure the deferred compensation to be paid in full upon vesting, thereby matching W-2 reporting and withholding with the taxable event. Installment payouts are fairly rare in these cases.

I suppose the following could be analogous: merger of one non-profit into another; revision of governing documents to provide for new members or a new sole member. For what purpose(s) are you trying to draw an anology?

Should still be able to file an EZ or an SF as a "one person" plan. The underlying authority for the one person plan concept is a DOL regulation that says a plan without employees is not subject to Title I of ERISA. An owner and the owner's spouse are treated as non-employees for this purpose. Clearly the beneficiaries are not employees by virtue of their status as death beneficiaries. Therefore, it looks to me like it is still an exempt one person plan.

Perhaps AndyH was thinking what I am thinking. Are there currently employed NHCEs who aren't in the plan (yet) because they were hired after the freeze? When you allocate surplus assets i believe you have to take them into account for 401a26 and 410b purposes. Maybe top-heavy issues too. If this is not the case, factors against the timing of the termination being discriminatory would be: the two NHCE participants resigned, or were let go long ago; employer is now getting ready to be sold or go out of business.

How are you independent contractors for your own company? Last time i checked under the Internal Revenue Code corporate officers are automatically deemed to be W-2 employees of the corporation (and by your election to be taxed as a corporation this applies notwithstanding your LLC status).

I am aware of no such Federal law. Probably a stretch, but could there be an insurance company/state insurance law requirement to offer coverage to all persons who work 30+ on the same terms and conditions? Curious about your employer here. Is it comfortably less than 50 and therefore not subject to the employer mandate? If it is subject to the mandate, does the match really work out that it's better to pay the excise taxes?

If FGC's last suggestion is to allow for complete open architecture, i.e., Sam can open an account with Broker X, Mary with Broker Y, and Dave with Broker Z, etc., doesn't that complicate preparation of Form 5500s/financial statements (heaven forbid it is a large plan subject to an annual audit)?

Employer has a perfectly 409A-compliant phantom stock agreement with an Employee that provides for payment at Separation from Service or Change in Control, whichever occurs first. Employee now wants to receive some sort of interim payment, and Employer is willing to pay it, but only if it would serve as an offset to any future payment at Separation from Service or Change in Control. If this is done clearly it is an impermissible acceleration and not only is the interim payment subject to the additional 20% tax but the entire agreement blows up and is subject to the additional adverse tax consequences under 409A on vested amounts under the agreement. Can we handle it differently? 1. Terminate the existing agreement and pay the Employee $X. 2. Simultaneously, and as part of the negotiated package, the Employer and Employee enter into a new and identical agreement that by its terms is 409A-compliant, but the amount payable at Separation from Service of Change in Control under the new Agreement is reduced by the amount paid per #1 above. 3. It is aknowledged that the payment of $X is an impermissible termination/acceleration and the $X will be subject to the additional 20% tax. But, is the new agreement also in violation of 409A from the get-go because of the substitution principle?

Also (a) what type of plan are you talking about, and (b) what is meant by "allow for retired partners to participate"? Depending upon the answers your concern may be small potatos compared to other issues.

Unfortunately the document says nothing other than the shares will be transferred when vested, and vesting occurred in prior years. Would have been perfectly exempt under the s-t deferral rule had the shares been transferred by the end of the 2-1/2 month stub period, but since they weren't you are left with a document that is woefully 409A non-compliant. I don't see anything in 2008-113 that could be used here.

I would be less concerned about technical MEWA status than I would the risk that the insurance company may try to cancel or deny coverage.