CuseFan

Doesn't matter (b) or (f), still likely needs to be a "top-hat" employee to remain eligible. However, a reduction in hours resulting in a reduction in pay does not necessarily mean the person is no longer "top-hat" - that is, select management or highly compensated (not IRS definition). If a CFO, for example, goes from full time to half-time and pay goes from $200k to $100k, does that mean (s)he is no longer select management? I'd say no. It it's a higher paid middle manager in the same situation, the answer may be different. There is also the argument that these plans must be primarily, but not exclusively, for benefit of top-hat employees. If the plan covers 10 or 20 and it's just one person in question, continuing to include probably still satisfies that requirement. If it's 1 out of 4 or 5 (or less) then that's a tougher argument. A good plan document would provide clear direction here but absent that, as Peter said, it should be the employer's interpretation (not yours) and may best be done in consultation with its ERISA counsel if the liability risk warrants.

Read the plan. You likely need to commence at a minimum the 50% J&S annuity (make sure there is a new annuity starting date for the plan termination distributions and the J&S is not locked in). If the plan has in-service distribution provision then person could elect lump sum, so part RMD and part RO-eligible using account balance method. BUT, if this not done as part of plan termination distributions (i.e., paid earlier) then you may have to satisfy the restricted employee 110% funding threshold requirements. The plan termination wrinkle really isn't the complicating factor, you can continue normal administration, it just potentially accelerates a final distribution. So I suggest you ignore the plan termination for now, administer this as you would an ongoing plan and then do whatever final RMD and RO split you need to do when the termination distributions happen.

Here is my take, assuming the husband and wife companies A & B are a control group: 1) Yes, it's plan assets from all plans of the employer/control group. 2) Plan covers only owners and spouses, so yes, EZ still appropriate for now. In 2024, under new rules they may no longer be a control group and I do not think you can file an EZ for a multiple employer plan, which you would then have. 3) No other schedules or attachments. 4) Filing and extension should not trigger anything because the extension would be the first filing of any kind for the plan, so neither IRS nor DOL would have any knowledge of the plan's prior existence or when its assets exceeded $250,000. So I would file the extension, then get 2021 filed under EZ delinquent filing program and then filed 2022 extended return. Note, if the companies are not a control group - not in community property state, no minor children, no involvement in the other's business - then you have a multiple employer plan and all bets are off and you likely have many more delinquent returns (SFs) to address. Come 12/31/2023, you may want to spin off B into its own separate plan if/when the control group goes away. That way each has their own $250,000 threshold and EZ filing requirement. Assuming you can show less than $250,000 as an ending balance for A at 12/31/2023 and 12/31/2024 it shouldn't trigger a letter for a delinquent 2024 filing.

Does the asset sale also involve the employees that were covered under the multiemployer plan? Might the transaction be structured such that participation in the plan is transferred to the buyer and it is now the buyer who incurs the withdrawal liability which in turn affords it the tax deduction for satisfaction thereof?

Agree with Peter. The example from ESOP guy seemed to indicate the employer was charging a fee to terms to encourage plan exit, which I agree would be a no-no. However, if an account fee of $x or Xbp was charged on all accounts but the employer chose to pay this on only for terminated folks then I see no problem with that assuming such fees are reasonable.

I don't think it's an issue. I think Peter's 1/4 note merits some thought, but in that vein I could argue that any request (before tax gross-up) would only need to be limited to 1/4 of the purchase price. Say the property was selling for $400,000, you could argue that his residence is $100,000 of that and substantiate a hardship for that amount plus taxes. I don't see any reason he couldn't pay cash for 100% of his dwelling (or whatever he can obtain through hardship) while financing 100% of the other units. What about someone who purchases a condo or townhouse that has common areas or pools of which they purchasing a portion (are they not?) so technically not all of their cost is attributable to their "residence".

only on 2/2 I imagine

If what Lou said is true then isn't the TH exemption lost forever regardless of what you do with that policy and related contributions prospectively?

You cannot categorically exclude part-time/seasonal in your document unless it is with the caveat that if they complete 1,000 in an eligibility computation period then they enter the plan. I would think the 500 hour LTPT rules now supplement this such that you still cannot categorically exclude solely on the PT/S classification.

Agree with Corey. Maybe if the plan had a 401(a)(26) failsafe provision, but not for an amendment that hasn't happened.

I don't deal with these plans, but it could mean simply that the contribution to the SIMPLE does not count as an IRA contribution and so a full IRA contribution can also be made. The plan/no plan issue (as well as income) affects deductibility, not amount.

Nope, and Google doesn't have a definitive answer either.

I don't think the filing per se precludes adopting a plan retroactively. For example, say the 2022 return is due 9/15/2023 but was filed on 7/1 - I think the taxpayer could decide to adopt a plan retroactively and amend their return before 9/15. I think the issue for you is whether the automatic weather related extension counts the same as a filed extension for this purpose - I would say probably but don't know that - and when the original return was actually filed. If filed before the un-extended due date, I think might render the automatic extension moot, that's my understanding how filed extensions are treated. If they filed after the un-extended due date under the automatic extension then you might have a case for adopting retroactive plan now and filing amended return. That is my non-legal, non-accountant opinion for what it's worth.

Exactly, someone would have been required to secure the appraiser's EIN.

Good communication/consulting with the client is the key. This really doesn't matter now unless the plan is terminating or one of the two owners is exiting and plan is sufficiently funded to pay out. Otherwise, I would continue as is until some event triggers needed action to realize desired outcome.

Drop to 99 - can file as small plan, drop to 79 - must file as small plan. Agree with other comments above. Also, plan audit scheduling and timing can often be a challenge, we see 5500 filing audit not completed issues in this space all the time, and I think moving in and out of audit years (doing/not doing) increases the risk of late audit completion in the years required.

One more thought - make sure amortization and payroll withholdings are done properly, as this person might now be on a weekly payroll whereas non-union/active participants (and typical loan) may be bi-weekly or semi-monthly.

Agreed. There is no statutory prohibition, and there appears to be no plan prohibition. Assuming the person is getting a paycheck from which loan payments can be withheld and assuming that is another loan condition/requirement, then it looks like all the boxes are checked for allowing the loan.

The 9/30/2022 PYE & FYE is due by tax return due date for that 9/30 FYE, including extensions. Going to a 12/31 FYE and having a short tax year 10/1-12/31/2023 doesn't change that I wouldn't think.

You are not prohibited from having a SEP and another qualified plan or plans in the same year, unlike a SIMPLE, unless the SEP is on the IRS model document FORM 5305-SEP, which prohibits having another plan. SEP contributions, if any, are treated like profit sharing so you have to be cognizant of combined plan deduction limits. If the SEP is on the 5305, I would restate onto a provider's preapproved volume submitter SEP document (which you might need to search to find one) before adopting any other plan regardless of any 2023 SEP contributions or lack thereof.

There is no requirement to restate but you need to make sure the plan language is up to date and any interim amendments after the last restatement have been timely adopted. If so, and they can adopt a CARES/SECURE amendment and a SECURE 2.0 amendment (which you may need to craft or tack language onto SECURE) and you should be OK. If a CBP with market return ICR, may want to double check document language is up to date/compliant as well.

Also, for DC plans, is there any utility or advantage in retaining earlier commencement requirement and disconnect from the statutory RBD? For DBPs that are still required to provide actuarial increases from 70.5 to commencement at statutory RBD, I can see where the plan sponsor could want to retain a pre-SECURE required commencement date (and we did ask).

It sounded like most of the population was hourly but also full time (2080 hours) and the desire was to exclude a fair number of part time hourly employees. The "scheduled to..." classification would be even more blatantly abusive as some part timers could reach or exceed that through overtime. When it comes to exclusions, IRS is adamant that any hours-based (or disguised) criteria exceeding 1000 hours is a no-no.

Agree with Peter. I think this is the PA's problem, not necessarily the RK's obligation.

But not statutorily exclude any who work >1000 hours for a computation period. So if you are wanting to cover hourly employees who are credited with 2080 hours (aka full-time) while excluding employees credited with fewer hours (aka part-time), you would have to find some other legitimate non hours related business classification for which to exclude, assuming you can pass coverage as you say without those >1000<2080 employees. If all such employees worked in the same location, department, etc. exclusive of hourly employees you want/need to cover, that might work, but I would tread lightly as the exclusion of part-time employees who work more than 1000 hours is a specific NO-NO in the eyes of the IRS.