CuseFan

I think you have a problem adopting a plan retro to 1/1/2020 for a business that started 3/1/2020. You don't prorate salaries, you prorate 415 and 401(a)(17) limits at 10/12 of the annual limit. For 2020 there is no lookback year compensation for anyone so your only HCE(s) in 2020 is (are) 5%+ owner(s) in 2020. I do not think you have a BRF issue.

I think there is no difference when applying the rules to traditional DB or CB formula. There was some guidance a few years back that clarified the offset is applied to CB accrued benefit and not current DC contributions versus current CB service credits.

11/30 or 12/1 on notice, amendment need not be adopted until 12/31

I think the requirement to allocate those assets to participants ratably over a specified period not exceeding 6 or 7 years, I forget which, precludes their use for anything else, including payment of expenses. Deviation from that could result in excise taxes retroactively applying to those transferred assets. I also do not think that the preparation of the initial plan document is an expense eligible to be paid from plan assets.

You could adopt any time up till then (9/30) with the SH (and PS, if applicable) effective back to 1/1, if desired, but deferrals cannot begin until after the plan is adopted.

I believe the exclusion is if they don't benefit by reason of termination of employment and worked less than 501 hours. Your situation appears that they don't benefit because the employer chose not to provide them with a contribution, and so I would concur with you.

If the plan document allows for commencement at NRA while still employed - so you may need to amend.

If they can get to where neither is an employee of the other's business(es) nor provides services to the other's business(es) and they have no minor children and they are not in a community property state, then they are golden and Betty can do a solo plan to her heart's content. But it sounds like Betty's business is serving Bob's businesses, so in breaking that chain does she even have a business any more?

Yes, provided the plan had previously received a D-letter. PLR can be prohibitively expensive for a small plan. How large a plan and employer/control group are you dealing with and by how many employees are you missing the SH% and is there the ability to bring in people to pass - or does the size and HCE/NHCE makeup of this CG member not make that possible without bringing in another CG member?

You can only say these are the rules and I'll be happy to help you play by them and wish you luck elsewhere if you decide not to. Some people just don't like to accept the writing on the wall.

Severance pay - we ended your job but will pay you $X per month (or whatever) over the next two years - is NEVER compensation for qualified plan purposes. However, and maybe things have changed, I thought to be a bona fide severance plan you could not pay out over more than two years. Seems to be a disconnect there - so maybe (although intended as such) this is not a true severance plan/benefit and these are considered deferred compensation payments rather than severance, in which case the 401(k) plan document should indeed describe the treatment of such.

You obviously did not get, or did not take, qualified advice from your TPA or failed to disclose all the facts to such party (already funded max PS) before going forward with this arrangement. This is a tax issue and now you need advice from a qualified tax advisor - i.e., your accountant. If you have already contributed more than 6% PS for 2020 then you essentially have a 31% deduction limit for 2020 between the two plans. Again, you need accounting advice, but my non-accountant opinion is that you'll be able to deduct only a portion of your 2020 cash balance contribution for 2020 (which hopefully you haven't deposited yet) and then will need to deduct rest on 2021 return along with as much as legally/actuarially possible of the 2021 cash balance contribution, AND limit your 2021 PS to 6% or less of your eligible compensation, depositing such AFTER year-end and your eligible compensation is known with certainty. Note, the creation/existence of the CB plan does not make your PS plan deduction limit 6%. How much you already contributed for 2020 PS drives what your total deduction limit will be. Maybe others will opine differently, but again, this is a tax issue to discuss with your accountant as they are the ones opining on your tax return deduction.

Exactly, because granting past credited service for benefit accruals does not provide any additional participation service for (proration of ) 415 limit - good call.

I'm not sure, instructions just say before 180 days following PPTD, but do not say must be after the PPTD. Not that is holds any official weight, the graphical timeline bar in the instructions do start at PPTD and end 180 days later for various compliance items including the NOPB and the 500. But if there is no problem issuing NOPB before 12/31, why would there be one with the 500 filing. If you file, what's the worst that happens? PBGC rejects and makes you refile after 12/31.

Agree no reason not to use individual groups. I believe there was conversation within the last month or two concerning documentation for allocations. I noted that in an IRS audit the agent asked for a copy of the memo that authorized the allocation amounts/percentages to each respective group. I believe a number of people noted their practice was to have the employer/plan administrator execute a simple memo authorizing the contributions as presented in the attached schedule (which shows the individual allocations as determined by the RK/TPA or whoever).

Similar to the Pirate Code - more like guidelines! LOL?

It's a per filing fee and your filing is supposed to correct all errors, so 2018 and 2019 all together. You/they should also review thoroughly for any other issues that may need correction and include as well.

Yes. Otherwise, from year to year, a group may get X% of pay as a contribution one year and then a flat $X another year - the allocation formula for the group is not definitely determinable, you don't know how you're contribution will be allocated. Think of the group - whether it's one person, 100 people or 1,000 - you must specify how you are allocating to the group. The method cannot be discretionary for the employer, only the per-group amount (or percentage) is subject to discretion.

Ditto/agreed - no reason to keep separate and file separate 5500's, maintain separate documents, etc.

Yeah, you don't want to file your first return for 2020 showing a 1/1/2019 effective date.

Probably - don't work with these so don't know for sure - but NO 5500s were extended beyond 10/15.

Non-key HCE is benefiting in both DB and DC, correct? So 5% DC for TH.

that person will need to file for an individual taxpayer identification number (ITIN) which the plan will need prior to payout https://www.irs.gov/individuals/international-taxpayers/taxpayer-identification-numbers-tin#:~:text=An ITIN%2C or Individual Taxpayer,NNN-NN-NNNN).

How does that happen? If ELIGIBLE for 401(k) deferral = benefiting whether defer or not. If ELIGIBLE for Match had they made a 401(k) deferral = benefiting whether deferred and got match or not. How are possibly failing coverage on K & M if people are eligible after 30 days (FT) or 1 YOS (PT)?

It's not prevalent at all. Not counting our small plan practice, probably 2% or less - maybe more if you count any who ever did a COLA, but still less than 5% I'm sure.