Belgarath

Interesting question! Purely based upon my personal IRA, there was no such requirement. But there are 49 other states, and thousands of investment vehicles/funding companies for IRA's, so I'll be interested to hear what others have to say.

I'm with Bill, since I'm a coward at heart with regard to disclosures. Although there is no civil penalty for failure to provide, there are (last time I looked) possible criminal penalties for WILLFUL failure to provide. Although most would disagree, I think I'm too pretty to spend time in prison... All kidding aside, I think any potential for trouble isn't work the risk, for what would generally be a limited number of former participants in this situation. And putting myself in the Participant's shoes, it isn't IMPOSSIBLE (although quite unlikely, since participants neither read nor understand this stuff) that there might be something there that might bring into question something about the distribution. All that said, I'd have to say that the "risk" of not providing it is pretty small.

Perhaps administrative sanity? A relatively small school system (small by national standards) - without some limitation, might have to have payroll slots/deductions for for dozens and dozens of companies (my sister-in-law is in the business and I want to invest with her). Then information sharing agreements, the inevitable problems with calls from participants who SHOULD be talking to the investment company, but always call the School's HR people, the problem with no one wanting to certify a QDRO, etc., etc., etc. I can see why an employer would want to limit the choices to a "reasonable" number.

So, plan termination date is 9/30/2020. They will now be restating to the new Cycle 3 document, to keep everything clean. What date would you use as the restatement date? 9/30/2020? Other? I'm not really sure on this. Ultimately may not matter that much...

Wow, that's a blast from the past. Family aggravation (er, aggregation) - was that for HCE status? Although I have flushed this from my memory, clinging shards seem to remind me that this was for maximum contribution levels - I don't necessarily recall that it was for attribution for HCE purposes. But I'm working with a pretty dim bulb on that. Thankfully, all I really care about is that it is long gone!!

Yes, sorry, I got my 48 and 38 backwards! So yes, possibly an underpayment. I see C.B. already provided you a much more complete answer!

I think he meant to say "do not exclude Key" - perhaps?

All remarks here are off the top of my head with no further research, so take it with a healthy dose of skepticism... First, I believe the "less than 10 years younger" is referring to calculation of Required Minimum Distributions, not the calculation of a J & S payment of a defined benefit. Yes, I believe it is possible that it could affect the amount of payments. Now, it is possible that the amount was correctly calculated, and the payment is actually correct, but they just have a wrong DOB in their records somehow. But it it is also possible that the amount was incorrectly calculated based on the incorrect DOB, and that your father was overpaid for 30 years. The plan may attempt to recoup overpaid amounts by reducing future payments, for example. I'll defer to some of the DB experts (I am NOT one) and attorneys to flesh this out more with additional details and more informed opinions.

Again, speak to a local TPA. These boards are helpful, but are no substitute for a qualified professional actually looking at your document, etc., and making informed recommendations.

You certainly can establish a profit sharing plan and just exclude owners. You can, if you wish, make it a 401(k) plan so that your employees also have an opportunity to defer. Talk to a local TPA, who can guide through the best options. Yes, you can contribute to the SEP and withdraw, but there may be fees/loads for doing so. I do cringe when I hear things like "old unused Keogh plan." Does this plan have money in it? Have you kept it up to date with document amendments and restatements, etc.? Are you filing 5500 forms if applicable? I just mention this as an item you should be aware of, and make sure all is ok. Again, I recommend you speak to a local TPA. Your situation doesn't sound complicated.

Such a good point! This gets missed a lot - gets pretty tricky sometimes, which is one of the many reasons why we always refer them to ERISA counsel.

Looks that way, although it still feels strange. Perhaps if the IRS issues an updated Rev. Proc. for EPCRS they will address this a bit more specifically.

They can't terminate, distribute the deferrals, and establish a new plan without satisfying the successor plan rules under IRC 401(k)(10)(A). I agree with Bill - what they want to do is silly. Possible their current document, being a "solo k" document (that term drives me crazy) may not have the provisions they need, so the solution is NOT to terminate the plan, but to amend (or restate, if necessary) their EXISTING 401(k) plan. P.S. - the regulation may be rather more illuminating. 1.401(k)-1(d)(4).

I'm just speaking off the cuff here without looking into it further - if your pan has this "fail safe language" then I think you are stuck. But if it doesn't have such limiting language, it seems to me that 11(g) doesn't limit you in such a manner. Perhaps the corrective amendment (which would most likely be nondiscriminatory - I assume you are talking generally about NHCE's) could say you will remove the allocation conditions for all participants who worked more than (x) hours - or something along those lines. Don't know if others will agree - again, this is without any investigation on my part. Caveat Emptor!

So you want to know how NESE can be less than guaranteed payments? 'Cause earned income also takes into account the partner's distributable share of partnership income that ISN'T attributable to guaranteed payments. This could be a loss. Also adjustments mentioned by C.B. above. Is this common? Not in my experience. But it happens.

Agree.

See my first post.

Hmmm - in order to be eligible for the credit, the employer cannot have maintained a plan during the immediately preceding 3-year period, to which contributions were made, or benefits accrued, for "substantially the same employees." If some NHC's will be covered - say it is a safe harbor nonelective plan for example - I'd be inclined to say the credit is available. Up to the accountant, of course...

I believe FIS is doing one. I have a question for those folks who work a lot with ESOP's, and/or draft the ESOP documents. Do you think that most existing ESOP's will "fit" into a pre-approved plan document? Probably impossible to answer without seeing the pre-approved document...

No, that's not what I'm saying. I'm not talking about a "draw." I'm saying that "guaranteed payments" are not the definition of compensation - I am saying they would normally be included in arriving at net earnings from self-employment. However, it is possible for NESE to be less than the guaranteed payments. So if deferrals were being made based solely on guaranteed payments, and it turns out that NESE is less than the guaranteed payments, then you have a problem. Again, I suspect we are all agreeing on the final result, and it is just semantics in arriving at the final result.

Luke - maybe a matter of semantics, but I read C.B.'s statement as meaning that "guaranteed payments" - in and of themselves, are not the measuring compensation. Rather I understood him (her? Can't tell gender from initials) to be saying that you use net earned income - which is correct. The guaranteed payments are generally (but not always) used when arriving at earned income. So I suspect we are all agreeing, albeit stating it a little differently.

I agree with C.B. - but FWIW I'd be a little cautious on the "Guaranteed payments" question. Sometimes this terminology is used on a blanket basis, but certain "guaranteed payments" are included when computing net earnings from self-employment, and some (see IRC 1402(a)(10)) are excluded. And as C.B. notes, you can get into trouble if the "net earnings from self employment" turns out to be less than the guaranteed payments.

If no ownership, then based on this information he is non-key for 2020. Key for 2021. As an aside, you don't say when he was hired, and if employed prior to 2019, what was his compensation then? If he was hired in 2018, and his compensation exceeded the threshhold, he could be Key for 2019. I expect that isn't the case, but you need to be sure.

Agreed. I made an unwarranted assumption (assumed he was an officer, given that level of comp) re Key status for 2021...

Muchas Gracias. Always nice to find out I'm not entirely senile.