CuseFan

We always provide separate 204(h) notices.

Yes, and agree with chc93, usually documents are set up to provide reversion because you can always amend last minute to change and allocate in the plan.

That sounds familiar, we were just there! Funny.

I have not seen any. Maybe they updated for the new COLA but forgot to change the years? Someone dropped the ball.

Generally, you satisfy DB RMDs by commencing the benefit as an annuity, either single or joint life, unless the plan allows other options. If the plan allows a lump sum and participant so elects, then a portion of the lump sum will need to be parsed out for one or two year's worth of RMDs, depending when paid. The RMD portion can be determined as 12 or 24 annuity payments or considering the lump sum as a DCP balance and using DCP RMD methodology, which always (in my experience) leads to a lower RMD portion. If this is for an owner or HCE, the plan will need to be sufficiently funded to pay a lump sum.

https://www.irs.gov/retirement-plans/non-governmental-457b-deferred-compensation-plans The combined employer and employee contribution limit is the lesser of the 402(g) limit or 100% of pay. You obviously could not go retroactive for employee deferrals, but whether you can do that with employer contributions, I'm not sure the more I think about it because they're essentially treated the same except for the necessary timing of elections. So if adopted 12/1 retro to 1/1, would the employer contribution be limited to the lesser of $20,500 or 100% of December's pay? I don't know. I linked IRS website if you might find something helpful in there, I looked quickly but did not find anything specific on this. Maybe someone else on this forum who specializes in these plans can be more helpful. What the heck do I know? I root for a team that lost to Colgate two years in a row now, yikes!

but is that the company - Midland National in Iowa?

I think you can do the 2022 calendar year plan year effective 1/1/2022 with employer contributions only. As a nongovernmental 457, this is an unfunded NQDC arrangement. Assets can be set aside or deposited to a rabbi trust, or they can simply be bookkeeping entries. If they are immediately vested, I also think contributions are subject to FICA and Medicare taxes.

Correct, person cannot get 402(f) notice more than 180 days before the annuity starting date, which in this case I think would be the distribution date. I don't know how quickly a DCP termination d-letter happens these days, DBPs usually take 9-12 months. I think they can't issue a letter any sooner than 145 days, so maybe send out forms after four months (120 days). Unless the plan is an ESOP, part ESOP, or has some crazy provisions, I would think you'd have d-letter in time to be within those 180 days. Just a thought.

This can often be a HUGE headache (and very expensive) for small terminating DBPs and especially if they have a general lump sum option like CBPs. Those in the small plan space know that having ANY annuity insurer option is a godsend. Effen - is this Midland National Life Insurance Company in Iowa that you reference? I'd ask if they could satisfy the DOL's safest available annuity option requirement, but if they're the only option then they are also the safest option. I see they are well rated anyway. Do you know in which states they are licensed to write contracts? I briefly checked their website but couldn't find. I know New York is a problem state. Thanks

seconded

If the plan allows expenses to be paid from assets and a recent invoice that could have been paid from the plan was instead paid by the plan sponsor, the plan sponsor can submit that invoice to the plan for reimbursement.

This is a great point and should not be overlooked. If you had owner or HCEs only and gave immediate vesting but now there are NHCEs coming into the Plan and you want to add a vesting schedule, that might be an issue.

I don't think so. Years ago, back when the PS deduction limit was 15%, I did RK for the large/audited PS 401k of a very generous NFP that easily exceeded that threshold every year without issue. Total compensation and benefits still need to be reasonable but there's no hard coded limit of which I'm aware.

Yikes, I'd only roll those dice if I knew they were loaded and guaranteed to come up 7 or 11 as opposed to snake-eyes!

and a person who represents himself has a fool for a client

Agreed, any reasonable determination that is defined and not subject to annual employer discretion in its application, would be permissible provided the result then satisfies coverage, which would be an automatic if all HCEs were always excluded.

and look at the time periods - as each could cover the specific periods of marriage, 50% of those 25 years thru 2015 and 50% for however long the second marriage lasted.

Agree - and assume this was a DBP, otherwise where did extra amount that was overpaid come from?

I would not forfeit and correct through payroll. It is not the correct method and a forfeiture from a salary deferral account throws up a red flag. Also, the excess is required to be adjusted for investment experience as Lou noted.

If they have d-letters, looking at the letters might indicate whether they were on prior 5-year cycle for IDP which has since gone away or are pre-approved with modifications on a 6-year cycle. I agree not much has been going on in DB amendment world and these may be OK, but it would be prudent to do a detailed review prior to going down termination road.

I do not think the spousal protections afforded by ERISA that attach to qualified plan participants subsequently apply to the benefits inherited by their beneficiaries. For example, if my married daughter is my beneficiary, upon my death there is no requirement to name her husband as her beneficiary of my inherited account. However, if she fails to designate a beneficiary then the plan's default will apply, which could be her husband. Also, be mindful of the new RMD requirements.

From the IRS Form 5304 model SIMPLE: V. Duration of Election This salary reduction agreement replaces any earlier agreement and will remain in effect as long as I remain an eligible employee under the SIMPLE IRA plan or until I provide my Employer with a request to end my salary reduction contributions or provide a new salary reduction agreement as permitted under this SIMPLE IRA plan. As long as the employee remains eligible, his/her latest election should continue and there is no need to re-enroll unless the employee is making a change.

Agree that there does appear to be inconsistency between the 6088 instructions and the Rev Proc, but that section of the RP then goes on to reference filing per the 6088 instructions, which do call for the 6088 for a collectively bargained DBP. The primary (sole?) purpose of the form is for IRS to monitor accrued benefits versus 415 limits, to which cb'd plans are subject, so it makes sense that a 6088 would be required.

I went to school with SpongeBob and I don't think he would like that, but I can ask him at class reunion in three weeks. I understand your frustration but financial institutions are required by law to know and verify their customers. I would think the important matching up would be the name of the plan sponsor (not the plan name) with the name on the check/bank account. If I'm holding the assets for a plan sponsored by XYZ company, or John Smith, but accept deposits of funds coming from an account for MAGA company or Osama Been There, can't you see where that could be an issue unless such entity or person is also listed as a sponsor to the plan? And if the check writing account does not belong to a party to the plan then contributions shouldn't be coming from that account either. Some CPAs might play loose with those rules but they are not the ones forced to comply with all the government regulations designed to combat terrorism and money laundering. Change the plan sponsor or add participating sponsor to match the source of funds and move on. Moving to another financial institution should still see the same requirements.