Belgarath

While I recognize that 1.414(q)-1T, A-3(b) allows any "reasonable" method, IMHO you are playing with fire by taking your interpretation. Good luck convincing an auditor that this is permissible. It isn't reasonable to abuse this discretion to blatantly ignore common sense coverage and nondiscrimination testing rules. I'd strongly recommend that you reconsider this. Good luck!

From the 5500-EZ instructions Who Must File Form 5500-EZ You must file Form 5500-EZ for a retirement plan if the plan is a one-participant plan or a foreign plan that is required to file an annual return and you do not file the annual return electronically on Form 5500-SF. A one-participant plan means a retirement plan (that is, a defined benefit pension plan or a defined contribution profit-sharing or money purchase pension plan), other than an Employee Stock Ownership Plan (ESOP), which: 1. Covers only you (or you and your spouse) and you (or you and your spouse) own the entire business (which may be incorporated or unincorporated), or 2. Covers only one or more partners (or partners and their spouses) in a business partnership, and 3. Does not provide benefits for anyone except you (or you and your spouse) or one or more partners (or partners and their spouses). A one-participant plan must file an annual return unless the plan meets the conditions for not filing under Who Does Not Have To File Form 5500-EZ below. A foreign plan means a pension plan that is maintained outside the United States primarily for nonresident aliens. A foreign plan is required to file an annual return if the employer who maintains the plan is: • A domestic employer, or • A foreign employer with income derived from sources within the United States (including foreign subsidiaries of domestic employers) if contributions to the plan are deducted on its U.S. income tax return.

Just a guess, they may be talking about a CARES, etc. Amendment, which is voluntary? I'll be interested to see, thanks.

Thanks Brian, I appreciate the response - that's what I was afraid of! More facts and circumstances, less certainty...

I'll leave it to the lawyers, but I think I respectfully disagree. What do you mean when you say "his designation?" His former beneficiary designation for HIS plan benefits is meaningless, unless the PLAN somehow provides something crazy that specifically states that a former participant's plan beneficiary designation still applies in this situation. I certainly have never seen anything like that, although I guess anything is possible. As ESOP mentions, the plan may have provisions dealing with this situation. Likely it will go to the estate. If by "his designation" you mean that the plan has provisions/forms for a potential beneficiary to designate their own beneficiary(ies) in the event that the participant dies, and the beneficiary also dies before receiving benefits, and as such potential beneficiary he validly executed such a beneficiary designation, then that's a different story, and presumably such a designation would control.

Maybe I'm missing the point here, but HIS beneficiary designation for his own benefits as a participant in the plan, shouldn't have any effect on the payment of HER benefits, based upon her beneficiary designation and plan provisions. The death benefit from HER Plan account should be distributed according to HER beneficiary designation and the plan provisions.

Bumping this one up with a related question: Is there any way to reasonably know what provisions REQUIRED an amendment or amendments? Let's say, for example, the document was done in (pick a year - 2008). Is there any source that says, in effect, that Section 125 plans were required to be amended for(law/act/regulation) by (date) - so that you could check to see if they had been amended? Alternatively, assuming no amendments whatsoever have been done since 2008, any source to discover what amendments were required, or potentially required, from 2008 to the present? This information is available for qualified plans, but for 125 plans, it seems to be lacking.

I absolutely agree with C.B.!!!

Thanks for your comment - just getting back to this. It does appear (although it seems a little odd, based on past history) that a 403(b) Plan Document Failure (as defined in 5.01(2)(a)(i) and (ii), as well as 5.02(2)(a)) is eligible for SCP within the normal 2-year period for significant violations, under 9.01 and 9.02(1). Has anyone actually heard the IRS comment on this, even unofficially? I'm conditioned to be suspicious that this is really that easy...

I'm absolutely NOT disagreeing with this; in fact, I agree. But to relate ancient experience... In a prior life some 20-odd years ago, wen I worked for a company that had an Enrolled Actuary and the EA always attended the EA annual convention, this issue came up. At the time, the IRS representative opined (of course, this was unofficial) that it was ok establish the plan on, say, 1/1 even though the employer didn't exist until later. Back then, all plans other than standardized were submitted for determination letters, and we had plans like this approved with nary a question. Haven't done this for a long time, and wouldn't do it now without some sort of clear guidance.

Interesting question, and I'll be eager to hear what the ERISA attorneys on these boards say. IMHO, it is not reasonable for a divorce situation to hold up a plan termination, but I don't know how this is resolved. Seems odd that I've never yet seen this situation, but I haven't.

Really, I implore all of you to stay safe, even though it may mean skipping traditional celebrations. We lost our best friend to Covid earlier this year - he and his wife didn't observe standard precautions, had a couple of big family gatherings, and both got Covid and he paid the ultimate price. Please don't let this happen in your circle. Be thankful for what you have, and don't take chances! I'll get off my soapbox now. Best wishes to everyone.

True, true, good point.

The 8822-B issue has been discussed somewhat on these boards. If you do a search, you'll find several threads. Here's just one of them, fyi https://benefitslink.com/boards/index.php?/topic/65352-form-8822-b-poll/&tab=comments#comment-299820

Is it necessary to restate? If they WANT to, can't the new entity just assume the sponsorship/assets/liabilities of the existing plan?

I recall, in the dim and distant past, that the IRS had at least a potential issue if a profit sharing/401(k) plan was established solely for the purpose of rolling IRA money into it to take a participant loan. I know at the time, the solution was to establish a 0% Money Purchase plan. Or, to make at least token contributions now and then. Has anyone heard anything further these days re the IRS opinion/stance on this issue, if any?

No, that's fine. Once they take the distribution, they can do anything they want with it.

As in $1.99. ?

Actually, I was talking about the above. According to your original post, Betty performs "management services for all of Bob's businesses." BTW - it hasn't been directly discussed, but is this in a community property state? If so, that would also generally blow the "non-involvement" clause.

Go back to CB's discussion of the "spousal noninvolvement" clause. From the sounds of your posts, VERY unlikely that they can satisfy these requirements. I'm assuming you are not an attorney? Tell them what you think, but also tell them that you are not permitted to give them specific legal advice, and they should seek ERISA counsel for the determination. I find that in most (but not all) such situations, clients are completely unwilling to pay for legal advice, and they drop the issue.

Y'know, I'm not certain I quite agree with that on a blanket basis. (But I agree in the apparent context of BG's question.) I'll grant you that MOST plans are written that way, but I believe a plan can be written such that if you have reached NRA, a distribution can be forced. From memory, 411(a)(?11??) but I'd have to look. Our plans allow postponement of distribution.

Well, I guess technically it is a group under common control, since Betty is a sole prop (IRC 414(c)) but the effect is the same. All 4 are considered one employer, and I agree, Betty can not set up a Simple-IRA just for Betty and Bob.

That's what I'm doing...

Thanks Peter. I've been in this business a long time, and have never even heard of this issue.

Suppose an employer has a plan with 100 otherwise eligible employees, including 10 H2A employees. Can the employer exclude the H-2A employees as a class (will easily pass coverage testing). I'm seeing conflicting information on this - some indicating that under IRCA you cannot exclude them as a class, other information indicating you can. Anyone have any experience with this issue?