Mike Preston

I have edited this post to take into account the corrections pointed out by others, below. mike ================================================================ The confusion is due to the lack of standardized language. The OP refers to something being equal to $100,000. This something is described as "net income from self-employment". I have a suspicion the OP means "Net profit as shown on the Schedule C". With "Net profit as shown on the Schedule C" of $100,000 then the technical definition of "net income from self-employment" is $92,350 ($100,000 * .9235). If so, then the $92,350 goes into the calculation of the FICA tax adjustment but otherwise is ignored for all plan calcs. With $92,350 as the starting point, the FICA tax adjustment is $7,065. Subtracting $7,065 from the net profit leaves you with $92,935 as your starting point for all of the plan calcs you need to do (415 limit and maximum deductible). So we have two numbers that are very similar ($92,350 and $92,935) which leads to confusion. With $92,935 as your starting point for plan calcs you will find that the employer contribution is limited to $18,587 [not $15,489 as originally stated in this post] at the high end and, of course, $0 at the low end. You can't really calculate the salary deferral until you have decided on the employer contribution. But we know that the maximum salary deferral is $19,500 no matter what the employer contribution ends up being (somewhere between $0 and $18,587 [not $15,489 as originally stated in this post]). As a double check you can state your results based on the maximum employer contribution of $18,587 [not $15,489 as originally stated in this post] and maximum salary deferral of $19,500: Employer contribution: $18,587 [not $15,489 as originally stated in this post] Salary deferral: $19,500 Plan Compensation: $74,348 [not $77,446 as originally stated in this post] ($92,935 - $18,587 [not $15,489 as originally stated in this post]) Maximum annual additions: $58,000 (lesser of $74,348 [not $77,446 as originally stated in this post] [100% of comp] and $ limit of $58,000) Actual annual additions: $38,087 [not $34,989 as originally stated in this post] ($18,587 [not $15,489 as originally stated in this post] + $19,500) Maximum deductible employer contributions: $18,587 [not $15,489 as originally stated in this post] ($74,348 [not $77,446 as originally stated in this post] * 0.25 [not .2 as originally stated in this post]) Actual employer contributions: $18,587 [not $15,489 as originally stated in this post] So the determination of the actual salary deferral revolves around the employer contributions for the year. With employer contributions totaling $18,587 [not $15,489 as originally stated in this post] you have plan compensation of $74,348 [not $77,446 as originally stated in this post] and your salary deferrals for the year are $19,500 assuming a percentage election is 26.23% [not 25.2% as originally stated in this post] or more. With employer contributions totaling $0 you have plan compensation of $92,935 and your salary deferrals for the year are $19,500 assuming a percentage election is 21% or more.

Why wouldn't 404a6 apply?

Uh.... he is the accountant.

You need to review the requirements for an 11g amendment. There is not now nor has there ever been a requirement to fail testing before invoking 11g.

Technically one is supposed to use the fair market value of the policy. I suspect that a great majority of plans with insurance use just the cash value though.

I'm confused. What does the calendar year election have to do with what is being discussed?

The term executive plan is meant to communicate the fact that the participants are primarily executives. No insurance products. Definitely a qualified plan. Nothing to do with a non-qualified deferred compensation arrangement. No 409a issues because it's not a 409a plan.

The cash balance plan can be aggregated with other plans of the employer to pass testing. An executive cash balance plan is quite common.

Link? Link. Link!! Thx!

I've never seen a copy of the pension plan submitted to the court.

What Bill said.

Case in point. Sometimes the level of incoherence is astounding.

Ananda, you are all over the map. If I were you I'd start all over and see if you could get a coherent response. To add fuel to the fire of incoherence another option for notarization is e notarization, made popular during covid.

I don't think the two things are tied together. Can't you just call the IRS auditor and ask for an extension?

You might consider contacting the American academy of actuaries and specifically requesting they forward your request to their pension PAL program. It can get complicated real quick. https://www.actuary.org/content/pension-assistance-list-pal

It is impossible to answer your question since there are so many possibilities. Generally the plan must follow the original qdro. What does it say to do? The new spouse is entitled to any death benefits provided from the plan that haven't already been spoken for in one way or another in the original qdro.

I've seen the IRS mandate 100% vesting. I've not seen them claim that the plan has been terminated.

A26 can't be controlled with profit sharing contributions.

Nope.

I don't have a problem with definitely determinable benefits. If you follow the document the benefits are definitely determinable. What I do have concerns about is a bit more esoteric. 411 d6 provides that a pattern of amendments may give rise to required continuations. For example if a participant is listed on exhibit a 3 years in a row does that establish an expectation of being on exhibit a in the fourth year? I told you it was esoteric.

IMNSHO, yes.

Loans and hardship distributions are not 411d6 protected. So the document could have been changed when it was frozen to eliminate either or both. So what does the document say?

Yes for 404. No for 412/430. At least based on what you posted.

Do a global replace of 401a9 for 409.

Whatever satisfies 401a26.