Mike Preston

Something is missing.

Round and round we go......

It doesn't. The above is only talking about 430.

The preamble from the 2009 Final 430 regs reads in part: "These regulations clarify that the rules for short plan years apply for the year of termination by specifying that if a plan terminates before the last day of a plan year, then, for purposes of section 430, the plan is treated as having a short plan year that ends on the termination date. As a result, the minimum required contribution for such a plan is determined based on that short plan year. If a plan terminates before the date that would otherwise have been the valuation date for a plan year, then the valuation date for the plan year must be changed so that it falls within the short plan year. " The actual language of the regs essentially repeats the above, as you would expect: 1.430(a)-1(b)(5) Terminated plans (i) Short plan year. If a plan’s termination date occurs during a plan year but before the last day of a plan year, then, for purposes of section 430, the plan is treated as having a short plan year that ends on the termination date.

I think you need to check with labor counsel. I'd want to be darn sure it was, in fact, an error. If this individual is represented by the union then the fact that dues weren't paid wouldn't matter, would it?

Yes, seems likely.

You don't have nearly enough information to do an ASG analysis. Refer it to an attorney (who will also confirm that the LLC and PLLC aren't a controlled group (which is also a possibility that someone doing a proper analysis will need to weigh in on).

If the LLC and the PLLC are not a controlled group, then adding an entity to the mix that is 100% owned by the LLC won't create a controlled group between PLLC and either LLC or the entity owned 100% by LLC. Whenever I hear "dentist", though, I get cautious vis-a-vis whether or not an affiliated service group exists.

Indeed.

Consider a plan that is restructured for rate groups such that one restructured "plan" uses current year testing and another restructured "plan" uses accrued-to-date testing. Keep in mind that there is only one average benefits test. Does that make it clear?

Way too early in the process to definitively say there is anything to correct. Also, need to clarify a bit. "For purposes of elective deferrals" can mean different things. Does it mean that a participant may not defer from bonuses? Or something else? Did anybody actually defer from bonuses? So many questions.....

And, by the way, check and double-check everything this "consultant" says because if he or she is really describing a rate group test failure as a 410(b) failure you have been put on notice!!!

Uh, you use 414(s). That gives you a lot of flexibility.

I think you are off base to make the blanket statements you are making above. It totally depends on the actual language and there is nothing abnormal about the language applying to prospectively affect a participant.

You might want to check with an ERISA lawyer familiar with the transition rule's peculiarities. Over the years, I've been amazed at how liberal IRS has been with respect to this issue. Can't hurt.

You can't have an EOY employment requirement to receive a SH. Something needs clarifying.

Good point. Edit: Well, I *thought* it was a good point. It has since been refuted (see below).

And while we are at it, might as well also answer the other question in the original post and that is with a cure period that runs through 12/31/2017 the deemed date would be 12/31/2017, not 1/1/2018. That is, if the loan wasn't deemed on the day it was issued because of the 5 year thingy already mentioned.

How is this loan not deemed from inception? Isn't the repayment period beyond 5 years?

I think the logic works something like this: (a) To satisfy the safe harbor one must have a document provision that lays out the allocation (by definition, no plan that has everybody in their own groups with completely discretionary allocations to each individual can ever, EVER, satisfy the safe harbor). (b) In order to satisfy the general test one can utilize permitted disparity but only as specifically allowed in the general test rules under a4 (which you can find at a4-7). a4-7(b)(4)(ii) allows only one rate (it has always been 5.7%). There is no provision to use anything other than the 100% rate (5.7%). Never has been.

"In form" has always meant "there is a specific plan provision".

Maybe it was deemed because somebody realized that the loan payoff date was after 60 months.

The IRS rules as described above were implemented to extinquish all remnants of what is known as "class year vesting". Option A leads directly to disqualification.

Will you settle for a "because I said so"? I don't have time to look it up but the IRS has been quite clear as to the requirement. Trust me.

Hire an actuary.