CuseFan

Agree - do the accounting combining everything as if it was properly calculated and communicate the issue/risks as noted by Peter. Not sure about a conference, but do specifically remember an ASPPA webcast by Darrin Watson (I watched recorded session) where he specifically said partners in a partnership getting a W2 is wrong, outside of the context of Luke's excellent sequential point.

110% rule applies regardless and would apply to beneficiary if this unfortunate situation becomes a death benefit.

Then you are required to include the person in your coverage and nondiscrimination testing. But on the plus side, if no other 401(a) benefit then don't need to give them gateway.

Yes, that is one of the downside risks w/ROR ICR.

old table for 2021 distribution calendar year and new table for 2022 distribution calendar year and beyond.

Exactly, but why not amend PS into a 401k and avoid the added expense of plan termination and new plan implementation? Having an asset base at the start may help 401k pricing as well.

Green - this is the key, it is not usually automatic (read the document) that all members of a CG are covered by a plan, usually each separate affiliated employer must adopt as a participating employer. If not, no employees or owner comp from non-participating companies can be included for contribution determination (but included for coverage and nondiscrimination).

Always the first and best advice - RTFPD! (Would probably significantly reduce the number of questions we see in this forum.)

The partners are still self employed, so the source of their TH contribution doesn't change compared to ordinary profit sharing.

I'm guessing LLC is disregarded entity and Joe is considered owner and so you have an exempt owner/spouse plan, but interested in what others more knowledgeable in these intricacies think.

Exactly - employer contribution and income thereon gets forfeited. Plan document usually tells you what to do if an employee is mistakenly included or excluded.

Facts: married couple, they contractually agreed to waive each other as death benefit beneficiaries and to consent to the other's waiver as required under ERISA. The only concern of each plan is that the proper QPSA or (DC) similar election forms and consents are validly executed. It's up to the blissfully (?) married couple to fulfill their contractual obligations to each other. If one has to go to court to secure compliance from his/her spouse, so be it. One thing I know for sure is that I would not want to be living next to this couple!

IMHO

And can later be re-opened, unless the house is torn down (plan termination). Just a difference of opinion on the semantics.

agree completely.

Yes, required. If someone is early retirement eligible then they have all other distribution options available to them already. By giving them a (temporary) lump sum option I don't see how you can take away any of their annuity options. If someone is not eligible for any distribution other than under the window then yes, you can offer them only the QJSA/normal form QOSA.

I think that's Mike's Friday night version of "yes" - you avoid ABT.

Yeah, SECA tax should be $17,656.43 with the 50% deduction at $8,828.21, net SE income before PS of $116,132.79, and then 25% PS at $23,226.56.

That is the key. Typically, unvested balances forfeit at the earlier of distribution of vested balance or 5 consecutive one-year breaks. If you have unvested balances remaining for participants who have been gone longer than five years then you could have a compliance issue - operational defect for not following plan document that may have required forfeiting and re-allocating (or reducing ER contributions) in a specific time frame. You should make sure that is clean before terminating the plan. Then, anyone who has not forfeited unvested balances under the terms of the plan must be fully vested upon plan termination.

Large company with existing traditional DB plan, so you have a current actuary and given your size, would assume it is a large consulting firm actuary and (hopefully) not a bundled insurance company arrangement. Your actuary should be willing and able to elaborate the pros and cons of converting to a cash balance arrangement, both in general and specific to your organization, as well as with respect to your employees - and for little or no fee. When you get into modeling potential conversion formulas and the impact on employee benefits, company funding cost and (often the most relevant issue) company financial statement (pension liability and expense), then the consulting fees can be substantial - as are the fees to actually implement the conversion. If your actuary is unwilling or unable to have a no cost general pros and cons conversation with on this then maybe it's time to find a new one. If you are a public company and/or in the finance/banking industry, then I'm somewhat surprised you haven't already converted to cash balance or at least had specific material conversations about it. For a company/plan your size, the design discussion should be within the scope of your overall compensation and retirement benefits/total rewards objectives and include a comparative market survey, which kind of looks like what you're asking of this forum. Personally, I say consult with your actuary and possibly engage a total rewards consultant to determine what your company wants to provide, then drill down to your potential cash balance design on a top down approach rather than trying to go bottom up. We've worked on many conversions over the years, large and small, various industries (banks, hospitals, retail, etc.) and public and private companies. The primary objectives vary, including simplify plan, lower employer cost, lower employer F/S expense, keep employees whole. If your actuary won't engage in a complimentary discussion with you, I have no doubt that one of the actuaries of our company would love to have a conversation with you (as probably others in this forum would as well). Maybe I've dug way too deep and you only want some basic cash balance plan design education and thought it's be easier to ask here rather than sift through volumes of Google search articles, but you will need a deeper dive at some point to determine feasibility for your company.

Isn't a lump sum distribution defined as the balance of the person's account (paid in the same calendar year)? So if the entire balance is distributed in 2022, I don't see how a partial distribution in a prior year DQs it from being a lump sum.

The initial "transaction" (DB plan termination, distribution and transfer of excess to QRP) has been completed, I don't see any legal basis for transferring from DC into a new DB, unless a termination of the DC might allow for a second generation QRP - a QRRP? However, the rules say if DC is terminated before the DB excess has been allocated (see the last sentence of this link) then the residual is a reversion, so I don't see as possible. https://www.law.cornell.edu/definitions/uscode.php?width=840&height=800&iframe=true&def_id=26-USC-276939643-615333267&term_occur=999&term_src=title:26:subtitle:D:chapter:43:section:4980

There should be USERRA provisions for this in the document, and you may need to look at the BPD in addition to the AA. And if there is an incorporation by reference then go to the applicable code or regulations. I believe that contributions are required. However, if the person returns to work from the leave after the plan has terminated and distributed assets, I don't think (s)he would be entitled to anything.

IMHO: 1. Transfer (trustee to trustee) - it's only a RO if person has ability to receive, which is not the case. 2. N/A for transfer of this sort, reported on 5500s. 3. Yes, transfer. 4. Yes, and remember it is due by end of 7th month following the month assets went to zero.

Agreed. You can start vesting from plans' effective date and for BRF purposes, the statutory vesting schedules are deemed equivalent.