CuseFan

For DBPs, when we file a 5310 we typically suggest the plan sponsor wait to distribute until after the IRS D-letter is received. I don't know if there are any "iffy issues" on which you may want to wait for a D-letter or if the sponsor believes their plan is squeaky clean and no need to wait. This should be the plan sponsor's call with input from their legal counsel and maybe service providers.

If this is a new separate plan that started for the employer after leaving the PEO and are truly/technically over 100 participants at start of the year (check and verify under terms of the plan and 5500 instructions) then I think the 80-120 rule doesn't apply. That rule is for existing plans that flip flop over and under 100 participants.

And a filing was due for each plan the FIRST year that COMBINED assets exceeded $250,000, so make sure there aren't any delinquent filings requiring correction.

Every bonus I've ever received paid late Feb or early March has shown up on my W2 for the year in which it was paid. The employer may be able to deduct it on an accrued basis (I don't know, not my job) but that treatment does not apply to the employees.

Always defer to the accountant, but if companies are in a controlled group and such companies file a consolidated tax return, then I think the source of subsidiary funding doesn't matter. So if A&B are CG and AB files consolidated return (if not pass-thru) or H&W file joint return, it likely doesn't matter where the cash comes from. However, when it comes to determining an owner's compensation I expect you would have to allocate the expense to the appropriate business. I wouldn't think you could, for example, have wife's company pick up expenses of husband's company to facilitate increased compensation for husband (or vice versa). I don't know this for sure but that is what makes sense to me and I fully invoke CBZ's above disclaimer.

I can't speak to those providers, but our DB beneficiary forms simply say that the total for the primary beneficary(ies) must equal 100% and the same for any contingent beneficiary(ies) without any further stipulation. I read that case and, although it appears on the surface that the plan administrator's rejection of the non-compliant beneficiary form was harsh, if I remember, the non-compliance was communicated and participant had every opportunity to correct but failed to do so.

You have my permission to take the rest of the day off.

Maybe if this was limited to acquisitions and the buy/sell agreement specified (subject to notice provided to employees) this could be accommodated (though I'm not convinced), but as a general rule, how could you? I work for Ford, quit and go to work for GM - on what basis could/should my Ford 401(k) election apply to the GM plan? What if I'm not yet eligible? I don't see the difference here. Yes, employer B was acquired by employer A, but B had no plan at the time, and I don't see how a future event (acquisition) can reach back and effectuate elections from a plan that no longer exists. What if the acquisition initially fell through and so then was delayed another 6-12 months? Maybe this works if they had a DeLorean with a flux capacitor, but I don't think so.

Our wonderful Participant Success Manager informed us all that tomorrow, the Friday after Labor Day, is known in the industry as "401(k) Day" - does that make today 401(k) Eve? Just wondering.

agreed

If it was straight elapsed time, but I think there is more flexibility now. I have seen 1000 hour eligibility requirement with entry after the hours have been reached, like next payroll or first of the next month, but with a 12 month computation period.

Good news! With doctors, it's usually they didn't remember getting it back in April and are signing it now LOL.

I understand the reasoning of a termination, I just don't agree it's always the best alternative depending on the circumstances and overall benefit plan objectives, which I obviously am not privy to in this instance other than the desire for deferral election continuity, which I believe is a necessary casualty of plan termination. I'm not saying they should have done things differently, but that what they did do is not accommodating to this subsequent desire. My point is that at the time of the plan termination the to-be-acquired company was indeed "another company" with respect to the (not yet) buyer prior to closing the acquisition. At the time of plan termination they were separate companies with separate plans with no relationship to each other, so there is no basis upon which to attribute any elections from the one plan to the other.

I do not think you can require 1000 hours to be completed in a period of less than 12 months, whether for eligibility or (definitely not for) vesting. What is the goal, earlier entry for FT but keeping out PT under 1000 hours? There are other pre-approved plan eligibility options to accomplish that with the provision noted by Lou that anyone with 1000 hours in 12 months is eligible (unless permissibly categorically excluded).

If you fail 414 are you a SH plan? You don't satisfy all the requirements for such, correct? So I think you ADP test on a 414 safe harbor definition of compensation. Big picture question - why the different definitions? Is there a salary deferral withholding challenge for one or more of the exclusions? Unless a compensation component is non-cash (except maybe tips) what is the aversion to taking a deferral?

I think you need to get new elections, there is no basis for defaulting to an election made under a plan of another employer that was terminated before it became part of the acquiring company. If they wanted to do something like that, it should have been discussed and determined during due diligence, and could easily have been accomplished by simply merging the acquired company's plan into the acquirer's plan. Why was that not considered? Also, and I could very well be wrong, but I don't think you're prohibited from terminating a 401(k) plan in this instance, it's just that the plan termination is not a distributable event and you must transfer funds to the successor plan. If they were worried about going to employees for new elections, wanting to treat as the same plan for them, then merging or terminating and transferring certainly is consistent with that philosophy. Regardless, those horses are already out of the barn and you need to give them all new saddles (deferral elections). IMHO

One (not me) might take the SCOTUS decision and argue personhood and apply that reasoning, or maybe argue the laws of their state grant that right, I'm sure someone with a lawyer who wants a lot of national publicity will venture down that rabbit hole at some point. We're already seeing pregnant women challenging tickets for using HOV lanes on that basis, just another can of worms. It's getting to be a crazy new world.

I think PW, as a 401(a) amount, is treated like a discretionary PS and negates any SH TH exemption. This seems a very odd TH situation, do you have a lot of Key EEs and/or they are getting sizeable PW? Providing TH likely means contributing only for non-Key, non-PW who are not contributing (enough) then, right?

Agreed, and unfortunately happens too frequently.

Exactly, refer to service agreement, stating that in accordance with whatever section(s) or paragraph(s) thereof you are providing the required notice that you are terminating or resigning from the engagement (again, whatever wording your SA used) effective a specific date. If you have any outstanding deliverables for which you've been contracted and paid, or if there are any outstanding invoices for work already delivered, you can address those situations as well. You need not state a reason, but could say "we have made a business decision..." or something to that effect as the lead in. You never like to do it but sometimes it is better to cut and run. Good luck.

If the pizza shop was not covered, then I think you are PBGC-exempt. If only the pizza shop covered, then I think clearly not PBGC-exempt (but this wouldn't make sense for doctor/owner as (s)he probably gets little or no earned income from that). If both entities are covered, I would guess not PBGC-exempt. If that is the goal, maybe make the pizza shop the sponsor and the medical practice a participating affiliated employer?

That is what we like to see as well.

Wishing you all a safe, happy, relaxing and enjoyable Labor Day holiday weekend, however you choose to celebrate!

I would agree with that statement, but.... would strongly recommend this more sooner than later to make crystal clear, and possibly name a contingent to his nephew.

Agree 5558 is the best option for extensions, especially since it often adds a month versus the tax return extension. Since return due dates are tied to year-end (fiscal and/or plan) I would think having the same year-end would suffice rather than requiring the entire plan and fiscal years to be identical, but I do not know that for certain.