CuseFan

The only way that might happen is where a DC plan actually has an annuity product in the plan. Maybe those are coming but they are not commonplace. If a participant uses their account to purchase an annuity via a rollover while still married, the Plan is no longer holding the assets nor subject to a QDRO. Participants taking periodic payments from DCP are getting installments, not an annuity, and such can be commuted to a lump sum partially or entirely. Any election or investment prior to retirement that involves purchasing annuity contracts must provide that the spouse be beneficiary of the death benefit unless the spouse consents to a waiver of such. Whether any such product has a lump sum option may vary from product to product.

1 -identify the definition in the plan document. 2 - apply that definition. Note - regardless of the definition of compensation in the plan document, it is almost never a number you can pluck from a box on the W2, especially when there are one or more pre-tax items and different pre/post-FICA/Medicare. That is, you almost always need to add multiple boxes and coded items to get the correct compensation. If your issue here is the health insurance add for S-corp owners, see 1 & 2 above.

We had a client (fund manger) submit a request to PBGC for a coverage determination on 5/15/2024. They've had a little back and forth for more info (and it got re-assigned along the way) but as of now (9 months later) there is still no determination. Maybe this one is more gray but based on what is happening in DC these days I would only expect turnaround timing to get worse, not better. What this client did was assume covered by PBGC and pay premiums, only two participants so not a lot, but then also limit ER DC to 6% of eligible payroll to preserve full CB deduction if they were found to be exempt. Hedging bets to be safe regardless of the determination.

You can only change for new participants or for new contributions if you want to apply to everyone, so you're looking at separate tracking in some fashion or another. Unless the employer often hires people over the age of 60, which you said there are none currently, what's the attraction for 65 & 5?

Annuity payments over life or life expectancy are not R/O eligible, nor are installments over a period exceeding 10 years (don't remember if 10 is the under or over cutoff). Any portion that is a RMD is also not R/O eligible, and there are a few other exclusions - but an ad hoc partial LS or installments over 5 years for example would be R/O eligible.

First, there is no requirement to restate regardless. The requirement is that the plan was up to date with the law as of the plan termination date. If you (and/or the plan sponsor) are comfortable that the plan in its current form including all amendments is compliant, then there is no need for further action. That would be the case if you didn't even distribute assets until next year, like if you submitted to IRS for a determination letter on the termination and were waiting for such before distributing. It may have been advisable to restate back in December to ensure nothing compliance-wise was missed, but it wasn't required, either then or now.

Thanks for the diagnosis, I think. What do I owe you for that? If you're suggesting I have some mental issues, tell me something I don't know! Of course now that you brought that to my attention I'm probably going to see that phenomenon pop up again soon - so thanks for that! All kidding aside, interesting stuff all the way around.

https://www.cnn.com/2025/02/18/tech/internet-archives-deleted-websites-wayback-machine/index.html?utm_source=business_ribbon I had never heard of the wayback machine until Lois Baker mentioned it in a response to someone back on 1/29 and this morning I see this article. Nothing earth-shattering, just found it interesting (eerie?) that something that has been around for a while, but which I never heard of before, now pops up to me twice in three weeks. Odd coincidence or message from the universe LOL?

I had never heard of this before, until your message, then this this morning I see this - so twice in three weeks. https://www.cnn.com/2025/02/18/tech/internet-archives-deleted-websites-wayback-machine/index.html?utm_source=business_ribbon

Yes, and it may not have to wait a year depending on the terms of the plan.

Control group A & B has a PSP with individual allocation groups. I know that if AB files consolidated tax return that the 25% deduction limit is applied to eligible payroll for the CG, and if separate returns I believe the 25% is applied separately to each. Assuming that, my question concerns the situation where the owner (both A & B are S-corps) gets a much smaller W2 from A than B but still gets maximum PS in total. There is an NHCE in A that requires a large contribution such that the total PS for A would exceed 25% of A's payroll if the owner's total PS% was applied to each of his W2s (equally pro-rated). My question is, can A say the owner's PS is 5% of pay while B determines the owner will get 40% of pay? That is, skewing the owner's PS toward the company with the higher payroll so that each company's deduction does not exceed 25%. I think that is OK, but looking for additional expert opinions - thanks in advance.

If SEP is on 5305-SEP model then not possible for 2024. If SEP contribution was more than 6% of eligible payroll and the CBP will be PBGC-exempt then you have the 31% combined plan deduction limit. If there are employees, I do not think you can aggregate SEP with CB for coverage and nondiscrimination, nor count any SEP contribution toward gateway. I cannot find a cite but a Google search gave me an AI-generated answer that SEP does not count toward gateway.

agree with Lou you should be good.

I've seen both. I thought I read on this forum that IRS will inactivate an EIN/TIN after X number of years of inactivity. If that's the case, what would be the reason to get a separate TIN for a solo owner plan upon start-up, for example, where the lone participant maybe 10-20 years or more from retirement distributions? Also, if inactivated, does/can the same number get reactivated when requested, is it gone forever, recycled elsewhere (that would be a problem), does the sponsor have to apply for new TIN when it's actually needed? Just trying to understand the necessity or best practice aspect versus wasted or duplicate efforts.

Mr. Peabody and his pet boy Sherman can do anything!

Yes, the employer and not the union runs the plans but the union can (and should) collectively bargain the retirement plan provisions. Sounds as if you are an HCE and in the union, and that plan fails ADP testing requiring you get a return of some of your deferrals, correct? You can discuss with your union hierarchy responsible for negotiations to consider asking for a safe harbor in the 401(k) plan come the next collective bargaining agreement.

Actually, if he owns both then it's a control group rather than an ASG, but treatment is the same.

After filing formal claim, if you get nowhere I would go to DOL first, the last thing a plan sponsor wants is a disgruntled plan participant or beneficiary complaining to the DOL. A follow up "threat" of such to the Plan Administrator may move them to action. An ERISA attorney could also help but legal counsel is not free. Good luck.

I would show it as a transfer from the plan on line 8j.

Not only acceptable, required.

Agree with all of the above - usually see SHNE when plan also has cross-tested PS and if in combination with a CB plan. When owner is just looking to defer maximum with as little employee cost as possible, then it's always the SHM. The situations in between then usually depend on the owner's or owners' attitude (and pockets) toward employee benefits.

Similar to QPs, first thing to do is read the document.

and that the document allows for the allocation in the manner you propose

Those limitations apply to the benefit - so in a CBP you need to convert the account balance into the NRB per plan terms. Also, you then need to look at maximum lump sum versus the account balance.

What happens when someone with an existing loan incurs a seasonal layoff? Like CBZ asked, are they considered on leave with repayments suspended? Or does the plan allow direct off-payroll repayments from the participant? Absent any specific plan/loan program documentation otherwise, I would likely treat similarly. But, ultimately, the Plan Administrator has the authority/obligation to reasonably interpret the plan.