CuseFan

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.

I think that makes for an awful tasting pate!

Yes and yes.

Bo knows pronouns (for those old enough - otherwise, Bri knows pronouns)

Bang zoom CBZ!

You're welcome.

I've never used that extreme before, for including masculine, feminine, singular and plural all in one. So how would you expand upon this to include the neutral, those who do not gender-identify?

sorry - "not" and "exhausted" - and it's not even Wednesday yet!

You need to allocate reasonably ratably over not longer than 7 years. It can be fewer than 7 years, but I think you need to map out an approximate allocation schedule and stick to it. It is subject to 415, so in your above example that person could get $58k for 2021 provided (s)he had no other additions. ER is nor deducting so the 25% PS limit should not be in play. But then you should continue at same approximate amount until the escrow is exhauster.

BPAS

Peter, we have a PR RK practice and the leader of that practice tells me we have a pre-approved plan with Hacienda (but not dual qualified). I'll have him or someone from that group contact you. Thanks

Ongoing plan = auto rollover. Terminating plan = turn over to PBGC under missing participant rules. And to the consternation of many, if you have unresponsive participants in a terminating DBP with PVABs/CB accounts less than $5,000 that do not return election forms then you cannot auto rollover and must treat as missing participants and remit benefits to PBGC.

What sort of in-service distribution, lump sum, ad-hoc partial withdrawal? DC or DB? If DB, was plan sufficiently funded? What about having owner repay the distribution, then amend the plan to allow for 2022? I know this still involves a level of self correction but takes retro amendment benefiting an HCE off the table.

Correct, provided $1M is eligible payroll for eligible employees and the 401(a)(17) limit is applied.

Yeah, I think it's obvious as the Plan Document is THE primary document governing operation of the plan. Everything else is supporting, but could be useful to a participant and so included.