Mike Preston

:-)

Indeed, very!!

Of course not. But you can get to the same result by amending the document as needed to ensure benefit accrual credit is awarded to the husband. Keep in mind that doing so, however, gives rise to the fact that the amended document provisions apply to everybody. There are two ways to accomplish what you appear to want (at least). 1) Change hour of service crediting provisions to DOL monthly equivalencies. 2) Change the number of hours required to ensure benefit accrual credit to something that works the way you want it to work.

You need to talk to an attorney in your jurisdiction.

You need to talk to a lawyer in your jurisdiction.

Ditto, squared, cubed and raised to the fourth power!

What are "both" options? In general, other than defining a group that satisfies 410(b), if the contribution source being considered is a non-safe harbor match then the ACP test is used to satisfy non-discrimination.

If I'm quoting you correctly, you are going to be spectacularly happy. Son who owns more than 50% of son's company is attributed stock of mother in son's business. There is none. Same the other way. Unless her sole prop is a management organization with respect to son's company (I doubt it), no control, no ASG. If her sole prop adopts plan you have a multiple employer plan.

Provided the separate group and the non-separate group satisfy 410(b) [1] is OK. Yes, it is a cutback, but as long as prospective, it is ok. [2] = no can do. Subject to same caveat as [1], [3] is ok, too. Also assumes not a governmental plan sponsor.

Can't do it.

We gave the same advice to a small collectively bargained plan. Interesting to note that some pre-approved plans now include a benefits/allocation provision that with a simple check of a box becomes: "Whatever the CBA says to do."

Reminds me of a story from long ago. A lawyer representing super-talents would create multiple organizations that were 79.99% owned by the talent and 20.01% owned by unrelated individuals. Who were the individuals? Why, the lawyer's law partners (as individuals). Big, big law firm so no control. How did I find out? When an accountant for one of the entities was unhappy with the TPA and we took over a case that had the same super-talent as a participant as another plan of ours. To make it "legit" the plans each had both as benefitting (and this was before 401(a)(26) made it mandatory, I think). Sweet little deal for the lawyer's partners (between the "compensation" they were paid and the benefits).

I don't mean to rain on your parade, but you really need to talk to a pension professional and let them ask you some detailed questions. Only then can some quality guidance find its way to you. From your perspective, the major questions you want to see answered are: 1) Do I get anything from a solo 401(k) plan I can't get from a SEP? 2) If a SEP would be better for me, why? 3) If a solo 401(k) plan would be better for me, why? You should be prepared to answer the following questions: 1) Exactly when did you start the C-Corp? 2) What did you do before that? Were you a W-2 employee? Or do you have a year or two or three where you were an independent contractor or self-employed? 3) In each fiscal year of the C-Corp how much has been/will be the W-2 compensation? For years not already closed, give the answer in terms of a low to high range. 4) For years not already closed, how much would you like to see put into a tax sheltered vehicle (either a SEP or a 401(k))? Do this exercise for the current year and as many years in the future that you think you can reasonably forcast. If whoever helps you decide what to do doesn't ask all of these questions, you need to add another question to your list: How can you guide me to design the right plan for me if you haven't asked: (insert the question not asked)? Good luck.

In my plans J&S are only available to spouses. You've got the right section. And, yes, I agree that it makes no sense that they should have written the rules to allow increases that exclude a B's B to commute certain payments. As I said, I was not at all concerned about your assertion that continued payments in accordance with the certain payment stream could violate 401(a)(9) but if there were something to be concerned with it would be the fact that the exceptions to the prohibition on increases don't appear to include a B's B that commutes remaining payments. You may argue with yourself from this point. I think the cite's have been exhausted.

You didn't miss it: "... as long as the provisions of A's plan don't specifically throw away the transition period..." Quote this

While I agree that all of B's service must be recognized that doesn't necessarily mean that the transition period is effectively eliminated. The transition period runs through 6/30/2017 and as long as the provisions of A's plan don't specifically throw away the transition period, employees of B can be ignored for 410(b) purposes through 6/30/2017, notwithstanding the fact that as of 7/1/2017 an employee of B would be able to take advantage of all service with B.

Are you disagreeing with my assertion that the exceptions to increases in the 401(a)(9) regs don't cover B's of a B? If so, please explain why they felt the need for an exception for the commutation of a spouse's benefit?

Not that I'm aware of. You may be thinking of the rules that require distributions in accordance with 401(a)(9) to commence by the end of the calendar year following death and, if they don't, a complete distribution of the account must be done by the end of the 5 year period. If anything, I'd be concerned with the opposite: Once benefits have commenced, the IRS now takes the position that commuting the value of future payments is a prohibited increase except in certain cases (like plan termination). The regs also allow a spousal beneficiary to commute the value of future payments upon the death of the employee. But I don't see a similar allowance for a beneficiary's beneficiary to do the same thing. Are you aware of anything else or were you just randomly commenting because you have time on your hands?

OK, I'll play along...... what part of 401(a)(9) gives you pause?

Huh? Why wouldn't a plan ALLOW a B to designate its own B' with respect to payments due but unpaid at B's death?

I'm just focusing on the original question. As I said, it is a simple case of restructuring. Keep in mind that to use the ABT to satisfy 410(b) each separate plan population must be a reasonable classification. It sounds like it is, but you need to make sure.

Huh? Why isn't this just a simple case of restructuring?

Huh? As of the point in time where the P died, the B had a right to receive the balance of the payments. If B died, then B's estate is entitled to the remaining payments. I've never seen a plan that would support any other interpretation.

Most of the time (which means every time I've looked) they are nothing more than an insurance contract as a funding vehicle. Very much like a GIC, but without the trappings of multiple participants.

I'll do better: 36. If a company has a SIMPLE IRA and adopts a qualified plan, what happens? Does the SIMPLE become invalidated since it can be the only plan of the company? Would the contributions made this year have to be returned? If so when? By the due date of the employees’ tax return? Would the distributions be subject to the 25% early distribution penalty since the SIMPLE has only been in place one year? The SIMPLE is invalidated. The contributions would have to be returned by the due date of the employees’ tax return (see 408(d)(4)). The 25% penalty would not apply. NOTE: THE ABOVE IS NO LONGER APPLICABLE AS THE EPCRS PROVIDES FOR THE PROPER PROCEDURE TODAY.