CuseFan

Agreed, it should have been spelled out in either the plan, an underlying employment agreement, or both - if well-designed. Otherwise, you're in the good-faith/fair-dealing gray area. If some sort of supplement to a qualified salary deferral/match arrangement then adhering to that practice or statutory timing could be deemed reasonable. And, as Peter notes, this is not advice to anyone.

It is not protected. It is a feature ("F") subject to BRF nondiscrimination. The question is whether that can be considered the same feature as the Schwab brokerage window. If not, that alone creates a BRF problem and that could be the issue upon which trustees force the transfer. Does the plan have in-service and in-kind distribution options which this person could utilize to roll out to an IRA and maintain his broker relationship?

No. We have a number of those clients and they all were required to amend for the Windsor decision.

Sounds like employer (PC) and both plans are continuing, so 1/1-12/31/2024 PY on both, but all employee other than the owner terminated 2/28, correct? If so, read on, but if not then you have bigger problems. If employees did not work 500 hours through 2/28 and do not benefit because of that then I think you exclude them from 401(a)(26) count in CB. However, you still have 2024 annual (combined I presume) coverage and nondiscrimination testing, and since everyone benefits by virtue of 3% SH then you have a gateway requirement. Employee compensation for such would be W2 from the PC, for the owner it would be the applicable metric for the year - either W2 or net earned income from self-employment. For the cash balance, compensation is used to calculate liabilities (pay credits) not the actual contributions. Required funding is a function of both assets and liabilities.

??? Was this a change in how the entity was taxed, switching from S-corp to partnership? Otherwise, what is the basis for this? Anyway, yes, you handle like you would any sole prop or partnership in that regard.

Agreed, and obviously the plan provisions must support

Yes, the 2% would be on $350K total and limited to $7,000. Absent any specific language in either or both plans on how to adjust, I would say prorate, so $175K comp in each plan and a$3,500 contribution.

Sounds like an hourly prevailing wage item where the "fringe" goes into health insurance or retirement - and if retirement, it's an employer contribution and not a salary deferral unless you also have the ability to take that $4.50 in cash in your pay. It may not be and your employer just gives you a choice between contributions to health insurance or retirement. Employer contributions have different contribution timing requirements and can often be made well after the plan year to which they relate. However, if it is a prevailing wage situation then there are state laws governing when employers are required to deposit contributions (usually at least quarterly is my recollection).

That is absolutely the correct method.

Details? Usually, unless it's a black and white situation. is the company's business investing in/owning stores, or is this an investment advisor/money manager firm that owns a store somewhere, your description is very vague. Maybe there is a control and maybe there are qualified separate lines of business - lots of maybes pending the details.

Your requirement is to ratably allocate the QRP escrow over 7 years or less. You are not precluded from making current deductible contributions up to allowable limits. If you do the above, allocate $50k of a $150k balance, then you've started the QRP allocation cycle at 1/3, so next year you need allocate 1/2 of the remaining balance and then finish it in year 3.

Or they could be carved out of general testing as otherwise excludable.

no

which will likely need the tax return be on extension

Yes vesting service continues and vested percentage will increase and by virtue of the plans merging there should be amendment to A for needed B provisions unless there is generic language in A that accommodates.

Was thinking the same thing - or as Forest Gump's mother told him, "stupid is as stupid does." That anyone, for YEARS, doesn't notice something like that is amazing, let alone someone who was involved in the payroll process. But we constantly see these situations pop up in this forum where someone's election, that directly affects their paycheck, gets discovered after a ridiculous amount of time - it flabbergasts me every time. So I'll hold more venting until the next example hits this forum, peace out.

Yes, that procedure language may be "too loose" but note the requirements in #1 are an "and" not an "or" - so there must be notice to the PA that a DRO may be pending AND the PA must reasonably believe that to be the case, which I think such belief would only be an issue/need if notice was given verbally. A best practice would be for procedures to require a written notice. I do not interpret #1 to allow the PA to freeze Joe's or Jane's account because he heard (s)he was getting divorced and instantly thinks there will be a QDRO. Now if one of the litigants or their attorney informs the PA verbally or (preferably) in writing that there is a divorce proceeding and a DRO may be presented then I think a (temporary) freeze is in order. The "reasonable belief" is not the sole criteria here. Asking a participant to certify in writing that there won't be a QDRO, I see absolutely nothing wrong with that. In the DB admin world, when someone retires and applies to commence benefits they are asked to certify marital status, provide documentation if applicable, and certify that there is no DRO/QDRO on their benefit if divorced. A divorce decree should state if and how retirement benefits are included in a property settlement. The procedure says "written confirmation" and "such as" so that confirmation/certification could be satisfied in a number of ways to the satisfaction of the PA. These rules are in place to balance a participant's rights while also protecting (soon to be ex-)spouses, in the same spirit that spouses must be the pre-retirement death benefit beneficiary and pension plans require joint and survivor annuities unless duly waived and consented. Should those procedures be tightened, probably, but are they blatantly non-compliant with ERISA, I don't think so. But I'm not an attorney, so maybe experienced legal experts out there believe differently. One final thought, document houses like Relius have attorneys that prepare (or at least review) their pre-approved documents so I would think they also do the same for related items like SPD and QDRO procedures.

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?