CuseFan

Might some other public or otherwise attainable recent records with the decedent's signature be accessed - such as a driver's license? You mention no claim from an estate, but is there an estate and, if there is, could the executor be requested to find and release a copy of decedent's signature? The claiming beneficiary could be asked to provide such supporting documentation, but unless such is provided through a certified third party you're essentially in the same situation.

I thought this was at the employee's election, if offered as on option by the employer. The employer forcing its contributions as Roth just doesn't seem palatable to me. I haven't plugged in the replacement language to the existing code language (I hate the way they do that), but maybe subsections (b)(1) and/or (2) have that effect (i.e., employee's election).

That is a spot on observation Peter. It is a sensitive situation for sure, but not really anything new. Certainly price points could change and reflect the amount of work that goes into processing a distribution to the extent it is impacted by the amount being paid, but people don't know how to value those new pieces yet. We see that in the DB/CB world for the over/under $5,000 (so to be $7,000) lump sums.

It may be the RIGHT thing to do but I still think it must be via an amendment otherwise it may not be viewed by IRS as the LEGAL thing to do.

Is there anything different or special on administration of these other distributions (abuse, emergency, etc.)? Is there adjudication or are these self-certification? If it's only a matter of whether the 10% premature distribution tax applies, I don't see a huge reason for charging a higher fee. Personally, I think the majority of service providers will be increasing their fees in general because of this, not to mention general inflation, although this is all my opinion from the outside as I do not directly work on the inside nuts and bolts of these plans.

The QJSA notice is provided 30-180 in advance of the ASD, although you can provide closer to the ASD if the person ultimately waives the 30 day notice to get payment ASAP. If a claim for benefits was made, then the plan's claims procedures should be consulted for timing. Also, the TPA's service agreement should hopefully have some standards for this. This is not "administrative delay" in the context of the ASD and how the IRS interpret. I agree to can increase an NHCE retiree benefit without much issue but would do so via plan amendment.

The annuity starting date must be a date after the QJSA notice is provided (which required the benefit calculation) unless the plan allows retroactive annuity starting dates, which some do but I always exclude lump sums in such instance that I've seen. I think you are stuck with the 2022 rates for 2023 lump sum unless the retiring employee in question was NHCE and the employer wants to amend the plan to increase this person's benefit.

Begarath is correct, the Act excludes service prior to 2023 in its 2-year rule.

Yeah, we're definitely in a state of SECURE summary overload with everyone rushing to get their piece out, so missing relevant details or nuances is not surprising.

True, wasn't thinking about that, and I don't think a Jekyll and Hyde defense works here.

Under SECURE 2.0 self-certification rules, effective now, I think the plan is off the hook. I don't know what the ramifications are to the participant for misrepresenting a hardship - they already incur taxable income and potential 10% premature distribution tax. Maybe any exception to that 10% tax that could apply is voided.

Any reasonable classification is fine from the plan perspective but I can see your general labor law discrimination concerns. I would find out the specific name of the program and use that as the exclusion. Even if it only includes one nationality I don't think you have an issue. If these employees become permanent and "graduate" from that program, then they join the eligible class and would likely participate immediately based on their prior service which could not be discounted.

I found this confusing at first and then after re-reading and thinking about so more came to same conclusion as CBZ.

Pun(s) intended?

1. Very glad I don't do this type of admin work any more. 2. I think this is certainly a government objective, make tested plans ridiculously complex to administer and "incentivize" sponsors into SH designs. 3. All you need is a Fidelity or Vanguard or the like to tell IRS, DOL and/or Congress that they can't ready their systems in time and this will all get pushed back another year or two. Or, God forbid, maybe they will be the only ones ready in time and we'll all be retired or working for them. 4. Good luck

sorry, forgot the "if"

Yes, very odd. So a new plan document and everything? Mirror provisions? How did they handle participation and deferral elections? Any filings under the second plan? Agree with Bri - and this was done on advice from an advisor then that client should find a new advisor rather than adopt a(nother) new plan.

Or as Danny Glover lamented in Lethal Weapon, "I'm getting too old for this s _ _ _ !"

Isn't this something the accountant should be answering, as the tax professional, rather than asking benefit plan practitioners? Unless maybe there are more knowledgeable accountants on this forum who can chime in?

You need to use the control group's non-excludables in your denominator, so if you have husband HCE as only person covered in plan A, then that plan will fail coverage and need to be aggregated with wife's company plan B.

Also, if it's a defined benefit plan (DBP), where a valuation needs to be done to determine the contribution that will be deposited by that tax return due date, you'll want to get the document done and signed far enough in advance. I recommend anyone considering a DBP retroactive to 2022 to put their tax return on extension for the extra time but make the decision and get the document done in the first or second quarter of 2023.

General rule - if the employer and employee are not paying FICA/Medicare or SECA (self-employed FICA/Medicare) taxes on the income it is not earned income and not considered compensation for retirement plan purposes.

Always! I think the prior service counts but applies to the current vesting schedule.

Agreed, and someone coming in early is almost never is an HCE these days because of the lookback rule, and not too many come into an employer as an owner unless it's a spouse or other family member.

A qualified plan document is a qualified plan document whether for one employee/participant or 10,000. As many have echoed in this forum, a "solo 401(k)" or "solo-k" is just a marketing term for provider's product. If you have an owner-only participant, you'll likely want pre-tax deferrals, Roth deferrals, catch-up deferrals, discretionary profit sharing and employee voluntary after-tax contributions. If you are hoping to do for 2022 you need to hustle because document and salary deferral election will need to be signed by 12/31, and that only works if unincorporated sole proprietor, unless getting big bonus on 12/31 from which to defer.