CuseFan

You have a 403(b) with a match, hence an ERISA plan that should also have a plan document that tells you exactly what you should do. If rules are same as 401(k) plans then you distribute excess that is vested and forfeit excess that is not but read the document.

You couldn't even provide a QNEC because their 415 limit of 100% of compensation is 100% x $0 = $0. it is unreasonable to include these people in testing. Agree w/Belgarath.

A "soloK plan" is a product with the fancy marketing moniker - are you asking if this would still be considered an owner-only plan with those ERISA exemptions and subject to 5500-EZ filing requirements? If CG, I think yes but, if MEP I'm not so sure. If not CG (yet), easy enough to get there by having one of them involved in the other's business in some minor fashion.

If not, it may be able to be permissively aggregated provided the union plan was subject to good faith bargaining AND contributions/benefits are comparable to the NU plan, T-7. I did not dig further to see if comparability was defined or explained. There was a BL discussion on this from 20 years ago that came up on Google search, but which didn't seem to reach consensus. https://www.law.cornell.edu/cfr/text/26/1.416-1

The important date is the "Annuity Starting Date" which is the date at which the benefit may be paid. Unless the plan specifically allows for a retroactive ASD, the ASD must be a date after the QJSA notice is provided (which should be 30+ days before the ASD, but can be closer). If you are doing calculations now then as Effen noted you're looking at a likely ASD of 5/1. That is the date as of which your benefits should be calculated, including the lump sum. And you will need to actuarially increase from age 65 (depending on actual retirement and plan terms) to that 5/1 ASD.

The SAR due date is specifically tied to the due date of the 5500, is it not? As there is no due date for a 2021 5500 filing as a filing is not required, I think that necessarily means there is no due date for a 2021 SAR and one is not required. The AFN due date is tied to the plan year, correct? So I'm not sure if you have a 2021 get of jail free card on that notice if otherwise required, but I'm not involved in administration at that level.

Also be careful because I've seen practitioners who implement designs that inflate the annuity benefit to get larger deductible credit amounts but where the account then exceeds the maximum allowable lump sum. If plan is expected to be ongoing for a while then you can usually get that situation reconciled, but the danger is premature death. More of a concern for a single owner plan than husband/wife or multiple owner plan, but something of which to be aware.

I think you have to do what the plan says and apply the failsafe (we always use 11g after learning tough lesson years ago). In aggregation the CB then satisfies coverage, but now you have NDT and gateway and TH et al headaches. Yes, you can empathize with the client over their prior TPA's lack of service/attention, but your job is to consult with them on how to fix their plans. Good luck

Exactly, you can test everyone or you can parse out the PS-only people. If you include everyone, make sure the PS-only get the full combined gateway in their PS. You mention 6% - is that the gateway percentage?

That is the key - good call Luke. I would have expected the plan language to say "... or is considered owning..." so this is a trap (as Admiral Akbar would say) for the unwary. Regardless, as all noted, options must be exercisable (vested) to be considered ownership. These are the types of Q&A's that provide the best value in this forum, in my opinion, getting input from very smart people (such as Luke) on issues that can't be discerned simply by reading the document (which some do last rather than first based on other Q&A's we see).

I believe the provisions that require consideration of options say "who owns or is considered owning...." Unvested options definitely do not count anyway as they are not yet exercisable.

If it is US-source income, then why not? LLC would have an EIN. She should also have a SSN or some other personal tax ID number.

Just because a volume submitter was submitted for an IRS determination letter does not make it "individually designed". VS documents with modified language are required to be submitted for D-letters, if you want one because they cannot rely on specimen opinion letter, but these are NOT IDPs and are on the 6-year cycle for restatements - unless the modifications were extensive enough to no longer qualify as VS (I have never seen). It is possible that the plans were submitted on a 5300 and treated as IDPs and then otherwise required to follow the 5-year restatement and submission cycle which no longer exists. In either case, there would be at least one if not two applicable cycles post 2009. Go to the IRS website or Google 6-year (and/or 5-year) restatement cycles. Google is a wonderful thing. All that said - you are never really REQUIRED to submit for D-letters, but you ARE required to maintain an updated plan document whether through amendments or restatements.

I don't think the accrued benefit can ever be less than the highest it is on or after early retirement eligibility. That the plan does not have an early retirement provision is the key, I think, and allows the accrued benefit to fluctuate up and down with the interest crediting rate and resulting projection. Yes, in reality it won't matter because benefit will be paid as a lump sum, but we all know practicality and IRS rules do not mix!

Good to test both ways. Plan can exclude people paid via 1099 whether they are truly common law employees or contractors, but the question is whether they can be excluded from testing as not employees.

yes, if HCE at time of separation.

No such thing - he is either an employee and paid via W-2 (or if has ownership then possibly K-1) or an independent contractor paid via 1099 in which case he is not eligible for any portion of the qualified plans. Notwithstanding, if IRS or DOL subsequently rules this person is a common-law employee and not a contractor based on facts and circumstances, then you might need to include in testing even if the terms of the plan continue to allow for his exclusion from participation. If he is and continues to be above HCE threshold that is unlikely to cause a problem.

Agreed. True, but facts of this case say person was employed at YE, just didn't have the hours.

However, if the NHCEs getting a $0 have no 401(a) allocation at all - i.e., not benefiting - then they do not need gateway.

Gateway, if required, applies to the plan in total - you cannot restructure and say plan A tested on contributions so no gateway and plan B is cross-tested and so only that piece needs gateway.

Does the document specify? Make sure it even allows. I assume the NHCE was offered in-kind distribution and elected cash and they have documentation for such, otherwise you have BRF discrimination issue. Assuming plan document allows but doesn't specify precise method and NHCE offered and declined, then I think they can divvy up assets how they want, equaling their correct individual distribution amounts.

Yeah that one never ends!

Are you from Russia and asking for a Bitcoin ransom after all that happens? Just want to make sure we're not indirectly funding the war in Ukraine by opening this.

agreed - and probably a lessening issue as industry technology improves and this continues as in increasing focus for DOL and IRS and hence (hopefully) plan sponsors.

and you thought the post-office and IRS moved at glacial speed....