Mike Preston

I get the point, but numbers matter. In the case you posit, a 2% NHCE contribution would satisfy gateway and could, very well, satisfy 401(a)(4). But your point is well taken.

That, and a whole lot of years in this industry having seen just about everything with an economic incentive to an ERISA advisor or consultant run up the flagpole. And enough investment advisors would jump all over the concept that if it had any legs at all would be common practice by now. There is strength in numbers. I have some sympathy for clients that find themselves sold a bill of goods by practitioners that promise what many in the industry would run away from. Having spouse's labeled participants (in the absence of a QDRO) strikes me as a hard slog and precious little strength (i.e., no numbers).

I don't know much of anything that is more fundamental than Sections 3's definitions.

Does the plan have a provision for QNEC's?

You asked three questions in the original post. The answers are: Yes, Yes, Nope.

Is this the same sole prop that I have already opined that the IRS thinks continues to exist until death?

Not a clue! @ETA Consulting LLC Cool! Never used that before. I would be reluctant to consider a contingent preference as ignorable. That seems to me like not taking into account an option because it hasn't yet been exercised. But options are typically analyzed with respect to corporations under 1563. I don't know whether it makes sense to equate corporate options with liquidation preferences. I agree that Derrin is likely your best bet.

If not owner in year turned 70 and 1/2 then no RMD's until separation from service (if elected by plan).

That isn't a concern. Ownership has no bearing on IRA RMD's.

I don't see where any correction is available (other than to pay the excise taxes for missed RMD's from the IRA's). It is likely that the owner was entitled to the distributions under the plan's in-service distribution rules so the distributions were no doubt allowable and, to the extent not rolled, appropriately taxable.

There are some seriious players at the IRS who question whether carryovers are possible in a sole prop.

How is the bolded language possible with $20,000 deferred from 1/1/2015 - 10/31/2015? What period is covered by the $63,000? Others may want to chime in with suggestions when questions are not fully formed. I usually don't.

See my post in another thread.

I coonsider the 45 day rule to be abhorrent in that it puts a plan sponsor that is lower on the compliance ladder in a better position than a pro-active, but not perfect, plan sponsor. So, let's see how we can adjust the focus of the proverbial microscope... Is it reasonable to analyze what is really going on and come to the conclusion that the payroll system was not coded correctly in December in that it excluded bonuses? I think most would agree with that statement. In the interim, was the payroll system re-programmed? Probably not. So, even though the deferral amounts happened to be correct, had there been a bonus paid it would have resulted in an incorrect deferral. Can it be argued that correct deferrals have not begun until the payroll system is re-programmed to include bonuses? If so, your 45-day period hasn't begun, yet. Just a thought.

I don't see why you can't use SCP. Do something reasonable. Document it. Follow the SCP procedures. Sleep well at night. THe absolute worst that can happen is the plan is audited and the IRS nitpicks the self-correction and requires something different. There is no way, based on what you have described, that the IRS will push for Audit CAP.

That is not responsive to the question at hand.

Are you John Quinones, branching out a bit?

I think somebody previously mentioned third party claims. Admittedly even less concrete than excise taxes but if I were a (bankruptcy?) judge I think I would be inclined to maximize the estate over the beneficiary.

We are not discussing the year that includes the participant's death. We are discussing minimum distributions for years prior to the participant's death.

Unwise. In the OP's situation it leaves the estate responsible for the excise tax while the beneficiary absconds with the cash!

Death benefits of any/all kind are not protected by 411(d)(6). There are other provisions which require death benefits (QPSA, QOSA, etc.) in certain circumstances, but those are pursuant to other Code sections.

Whew. Had me worried there for a second.

Count me amongst those who say that the beneficiary is not entitled to any portion of the 2016 RMD other than his/her share of the estate proceeds. Further, if there is a 2017 RMD in this circumstance that is also payable solely to the estate. However, if the death obliterates the requirement to distribute a 2017 RMD to the participant and replaces that requirement with specific timing rules related to the beneficiary then those distributions would of course be payable to the beneficiary. If it were my client I'd pull the a9 regs and see if there isn't clear guidance on this issue. And, of course, see whether the document provisions provide a bit of clarity.

And they have a credible ERISA attorney backing them up?

That would be up to the DOL investigator.