CuseFan

I can certainly get behind that option as well.

I don't have a strong opinion either way, but I seem to recall much discussion in this forum if an extension is considered valid when a filing is ultimately made by the original due date.

Personally, I think others will feel differently, I would consider that 1/2/2024 R/O for December 2023 dividend as a payable at 12/31/2023 and file a final return for 2023 showing zero assets.

You'd have an extremely low actuarially reduced DB maximum benefit, and to what point? From my perspective you are dealing with a self-employed sole proprietor whose business is not just boxing but his persona/personality. The likes of Michael Jordan, Tiger Woods, Shaq, George Foreman (the original, not any of the multitude sons) - any major sports (or other industry) celebrity who developed a personal brand - has self-employment income long after their playing days are over. So Joe Boxer might retire from competitive boxing at age 35, but when does he really retire from being Joe Boxer the celebrity?

Agree - testing one plan use NRA as testing age. When testing two or more plans use the latest NRA applied uniformly as the testing age. Have not seen anywhere that allows SSRA.

If there is no plan restriction there is no statutory issue either, assuming all the proper tax reporting/withholding is happening. A pension plan can commence in-service monthly payments as early as age 59 1/2, so what's the big deal here? Just because something creates an administrative headache and isn't the most efficient utilization of one's account doesn't mean there is a statutory issue.

I think you'd have a hard time justifying anything that is paid to the employee in cash for services as a fringe benefit. If you try to exclude anything that is not part of regular wages then that takes you down the rabbit hole of things like overtime, shift differentials, bonuses, etc. Cash-like items such as gift cards is probably as far as I would push that envelope. If you're willing to test rather than lump in with all safe harbor exclusions then you can pick and choose what to exclude. When I think of fringe benefits it's non-cash items like car usage, gym or country club membership, etc.

What they all said (especially the lawyer part) and you may still have the ability to get a domestic relations order for a marital share/survivor benefit.

No, you only need to register a plan once. New plans of the same employer require registration but not amendments/restatements of existing plans. At least that is my understanding.

A company's contributions to a retirement plan can come from either it's current profits or retained earnings. However, the company's accountant should be consulted with respect to tax deductions, if they would be limited to current profits, or provide any lookback or carry forward opportunity. I know there used to be very limited lookback deductibility but maybe not any more. Contributions not currently deductible can be deducted in the next year but need to take care in not depositing non-deductible amounts in a current year. Contributions and deductions will also be limited by the 415 limits and eligible payroll. If he's an architect with few or no employees then a CBP would be PBGC-exempt and any DCP would have to be limited to 6% or eligible payroll employer contribution or be subject to a 31% of payroll combined deduction. In those instances, including a 401(k) provision adds opportunity for another $30k. I assume C-corp tax status and wanting to avoid the double taxation on paying out those retained earnings? There will eventually be tax again on those amounts when ultimately distributed from their final tax-deferred resting place, whether a qualified plan or subsequent rollover IRA.

I'm confused somewhat because you seem to be asking what "can" be done when all the relevant dates in your conundrum have passed. If paperwork for 5/1 commencement was timely sent, returned and benefits commenced, the one day of rehiring did not rise to the level requiring suspension of benefits (assume that is where you were going with the 40 hours). If he has not yet returned forms and commenced then does this matter? Maybe, but most likely not - you mention "rolling out" which is only available if if a lump sum is paid, and again, since we're in July, whether he retired/terminated 4/22 or 5/18 doesn't matter for a lump sum (unless it also affects the actual calculation of the benefit).

I think you're OK. Plus, as of your plan termination date (2023) you were at 100% covered by QRP. Future employee terminations don't affect that, otherwise you'd be dead in the water. You don't say what the excess is but are you sure it can all be allocated in 7 years?

True "severance" pay is never Plan Compensation and is different from statutory post-severance compensation. If a person receives a "separation bonus" as part of their last paycheck, that may be includable depending on the terms of the plan - but if it's classified as severance it is ignored in any scenario. If this is includable post-severance compensation, and is not known until after the ASD, often a person is put into pay status based on the known (but incomplete) compensation amount and then after a final accurate benefit is calculated the future benefit payments are adjusted along with a true-up payment. Or, forms and elections are made using the aforementioned estimate prior to the ASD but then commencement is delayed for administrative reasons as the final actual benefit gets calculated and then paid effective back to the ASD. This is NOT an RASD if the QJSA forms are provided to the participant prior to the ASD. Plan language must specifically provide for an RASD and there are certain rules you must follow in calculating and communicating benefits.

agree on that as well.

Early retirement in the DCP - no harm, no foul for combo testing - and there may be employer objectives for having as David notes. CBP - do NOT include early retirement in the plan and test the combo as you would otherwise.

Sorry, saw the rest of your post and you're aware of that issue. On the 95% actives determination - not defined, but if 95%+ of the employed and covered DB population as of the PPTD are eligible for the QRP (do not think they need to be deferring and getting a match) then I think you're good. Your DB actives should have an accrued benefit but need not have been earning current accruals. For example, if you have 100 DB "actives" and at least 95 were eligible for a QRP that has a PS where you used the excess for PS, if some of those people then later terminated or failed to work the necessary number of hours, still think you're OK. I think it's a one-time determination as of the PPTD.

no can do - from a good Mercer article on QRPs: A number of PLRs say that surplus assets transferred to a QRP can’t be used to fund matching contributions earned after the transfer. This is because the transferred surplus is treated as a contribution, and Section 401(m) regulations prohibit employers from funding matching contributions before an employee’s elective deferrals have been made or before the employee has performed the services to which the contributions relate. In most cases, surplus assets are transferred to a QRP before participants have earned a match, so the surplus can’t be used for matching contributions. The article did suggest that some of the surplus could be used in the year of transfer for current year match on deferrals already made but for which matching contributions have not been funded.

So if you defer 2%, 4% or 6% you get 6% but if you defer 1%, 3% or 5% then you get 0%, 3% or 5%? I agree the RATE of match can go down on the INCREMENTAL deferral increase but not this, where the overall match decreases as deferrals increase. The plan could have a minimum deferral of 2% so that no one could defer more than zero but less than 2%, could it not? Could not it also require deferral elections in 2% increments so that only 0, 2, 4, 6, etc. were allowed? That would make more sense than what it seems they're doing.

Exactly!

There should be no SS or Medicare taxes on DB pension annuity, nor insurance. As you note, tax withholdings are just that and can be manipulated. The cost of the survivor annuity (the difference between the straight life annuity and joint & survivor option) is determinable as of the commencement date. I have not seen that done but I don't think that means it can't be done.

Like clockwork, Brian always comes through with the complete and accurate H&W answers!

And not that it matters for the answer, C's position is likely that it did not want any of the compliance liability for B's portion of A's plan that would have followed any direct transfer or merger. However, B employees now in C's plan can rollover their A plan distributions to C's plan if so desired.

And as we often say is this forum, just because you CAN do something doesn't mean you SHOULD.

401(a)(26) is good assuming prior structure was compliant. If no one benefits in 2024 then no 410(b) or 401(a)(4) concerns. If the plan was "soft" frozen (just participation) then you would need to include this person in your testing population as (s)he would not be a statutory exclusion.

How is it that basic plan records from only 5 years ago have not been retained in any fashion by either the client or TPA (or a third-party RK)? Isn't that gross negligence?