CuseFan

Fully agree with you both and here's an example of why our interpretations make sense compared to the alternative view. What if the 401(k) plans are both safe harbor and what if one or both exclude HCEs from the safe harbor? Not even considering the transition rules concerning amendment, if you amend a safe harbor plan mid-year to change who is and is not an HCE and thereby also change, mid-year, who gets and does not get the safe harbor, I think you have a big problem. I believe the transition rules were designed so that for a brief time after a merger (1+ PY) that plans of merged entities could continue to fully operate on an "as is" basis (so no "change" amendments) and have time to iron out the logistical details regarding future compliance of the respective plans. These rules are there to help ease the problems of dealing with plan differences, not exacerbate them! Otherwise, WTF bother with the transition rules at all? IHMO

Yes, saw this, hopefully this kind of relief will be granted. Thanks

Not to mention tax return due dates of 3/15, 4/15, ..... It's the zombie apocalypse - where is Rick Grimes when you need him?

The only unwritten rule in retirement plan administration is that those who follow unwritten rules in administering plans end up in trouble with the IRS and/or DOL.

It looks like CEO is being paid/treated as an independent contractor, which may or may not be proper based on facts and circumstances - not your call, the employer's call. On that basis he is not an employee and not included in your testing. You are not making an assumption, you are acting on the facts as represented to you by the employer/plan sponsor.

Does anyone know if any of the ARA bodies have advocated to the IRS or if the IRS is considering filing deadline extensions due to the pandemic? DB plans in particular have a 4/30 PPA restatement adoption due date and, if required, determination letter application filing due date. Just curious, as an unexpected prolonged sickness hitting service providers or their client plan sponsors could derail the timing necessary to complete the process.

Which plan says the DB will satisfy TH - the 401k document, the DB document, both? It should be both, or at least one w/o being contradicted by the other. In a DBP, you generally have a 2% TH minimum accrual. If the plan accrues a 4% benefit you should be good. NOTE, this does not mean a 4% credit allocation in a cash balance plan - the benefit accrual must be at least 2% and a 4% credit won't get you there. If that's the case, switch to provide in DC, especially if you're doing another 2% or close to it in PS.

I do not work with government plans so I'm not sure on the coordination between 457(b) and 401(a) - but in the private sector, you could have 401(k) deferrals of $19,500 (plus catch-up if eligible) and yes, $37,500 in employer contributions taking you up to the $57,000 415 limit. I cannot see your arrangement being limited to anything less than that, I'm fairly certain.

Thanks, but that trail appears to apply to statutory minimums and the timing of amendments to comply, remedial amendment periods and such. You can change things like the lookback month and protect the greater of for a year, but this is totally different. I know we could change for prospective accruals, but the plan is frozen so that doesn't matter. Thanks anyway.

Client has frozen plan with a subsidized lump sum interest rate using the 30-year Treasury less 50 bp. Plan is currently partially restricted under IRC 436, but in the current environment lump sums are valued at 1.16% - OUCH! Does anyone have experience with or knowledge of getting a PLR allowing removal/changing of an unsustainable provision such as this? We know this is otherwise protected, but in the interest of protecting the future viability of the Plan we are looking into options. Thanks

Yes, employer provided group term life insurance coverage in amounts in excess of $50,000 is not tax-free and the value of such is taxable income to the employee.

Correct. But if plan is a CBP and now eligible for pre-approved document, you will probably want to restate and, if not an adoption w/o modification, submit for a D-letter.

I don't think that is a matter of public record. And personally, to me the idea that allowing in-service commencement from a DBP at age 62 is "Phased Retirement" is a joke. If you have specific coordinated options that help balance the pension income with reduced work schedule and pay and then further adjust or allow a new annuity starting date upon actual retirement at 65 or some later date, like SSNRA, then you might have a true phased retirement program. Maybe these exist in the government sector and/or the Fortune 500 type of pensions but I have yet to see anything I would truly call phased retirement. If you simply want a survey of DBPs that offer age 62 in-service, I don't know where or how you would get that, and now with BAMA allowing DB in-service at age 59 1/2, that universe is all likely to change anyway.

If IRS intent here is to move along the VCP process by strictly and automatically (rather than at discretion) enforcing the 21-day info request turnaround because a majority of applicants to date have taken longer and/or routinely requested extensions, and by so doing we'll get responses on simple applications sooner than 12-18 months from current backlogs, then bring it on. If the intent is to reduce the volume of VCPs and increase the volume of audits, then boo hiss.

Or, if you don't pass 414(s) then I think you can (must) calculate ACP based on a gross compensation or some other 414(s) definition.

I would hope they would share with you their reasons for discarding the seemingly easiest and most viable option if they're asking for you to provide a solution. The only reason I could think of would be better creditor protection? If he must have it in a qualified plan, then why not just keep in the DBP until that plan terminates? Of course, that just kicks the can down to road. I would also take a good look at the existing document (and available provision options) and not just take the vendor's word for it. Maybe you tell them you can't have everything (where would you put it?). Good luck.

Unless the plan is a cash balance plan, the term account balance is meaningless and, unfortunately the attorney who drafted the attempted QDRO didn't know the difference between a DB and DC plan. It boggled my mind over the years to continuously see that "splitting the account balance" language in a QDRO for DBP and even more ridiculously see the Majauskas formula to split the accrued benefit in a DCP. Also, that a TPA would have this from 2006 and not questioned it or flat out tell their client to reject it is inexcusable, IMHO. I don't know how you comply - there is no account balance at said date nor earnings thereafter, there is only and accrued benefit and a present value at particular points in time. Maybe going back to the parties to make it right and able to administer/comply but I have no other insights, sorry.

Don't forget this either. If that amount transferred in 2019 you have to begin using it in 2019, either in entirety or (because that's obviously not an option here) in installments over a period not exceeding 7 years. If they fail to do so and get caught then excise taxes on the reversion (plus interest and penalties) would apply.

Plans sometime need to be aggregated to satisfy coverage (410b) or nondiscrimination (401a4) and if you must combine for one then you also must combine for the other, in which case you treat the aggregated plan as a single plan. None of that precludes someone from being covered by a more than one 401k plan of an employer. Coverage under multiple plans sometimes happens in a given year when an employee changes union/non-union status, divisions/locations within a company and/or goes to work with another member in the control group and there are different plans covering different groups of employees, in which case participation usually switches (ends/begins) when status changes. However, to be concurrently covered under multiple 401k plans of the same employer/control group is very rare - I can't recall the last time I've seen it, if ever, in 30+ years - but not precluded. And the rules CBZ notes above were drafted to prevent HCEs from benefiting being in multiple plans and somehow circumventing the nondiscrimination rules.

Your plan should have an investment advisor you can go to for answers to your questions. If not, and you have a sizable account balance, then you should consider your own fee for service advisor. You can try to educate yourself to make the right decisions on a timely basis, but learning retirement plan investing on the fly is probably not a good idea unless you are fairly young and new in your career and retirement savings. And no, I'm not an investment advisor.

Agree w/CBZ and as I have said before, just because you CAN do something doesn't mean you SHOULD. Documentation would be problematic unless you had the employee sign a release that (s)he did not provide notice. What do you do if someone just stops showing up later in the year? Did they quit w/o notice (no match) or did you fire them for not showing up (match), or do they plan on no match if fired? So you must work 520 hours and terminate voluntarily with notice and remain employed through notice period? Then what happens if I give notice and after a week my employer says I don't need you for the next week, today is your last day? This is so rife with potential problems - do your client a big favor and talk them out of this mistake like a good consultant.

I believe that is correct. I don't think that matters or is applicable for your general test - if you pass nondiscrimination in compensation then you can use that definition as your testing comp, I don't think you need to circle back. If your comp definition is such that you think it will pass, why not just general test using gross comp or some other safe harbor, or save steps and just do that first? Unless you have some funky large swings in excluded comp among HCEs and NHCEs screw that up.

Which is why the use of VATC for "backdoor Roth" IRAs only works (typically) for solo or HCE-only plans, or possibly some very large plans that are not SH but can pass ACP testing. Note you can use QNECs to help pass ACP testing, but you have no safe harbors as our esteemed colleagues stated.

The document should specify what 90 days of service means, whether it means 90 days of actual employment (actual hours makes no sense in the context of your question, but maybe it was for this intent) or to have been considered in employment for 90 days, i.e., elapsed time and simply being employed 90 days (or more) later. If this is an adoption agreement pre-approved plan you'll likely need to look at basic document for your answer. If you still don't have a clear answer, the answer may be the AA was improperly completed - mixing elapsed time and hours of service options to express an intent by the employer not explicitly allowed in the AA.

No problem, as long as 410b and 401a4 pass, which they very well could easily if you have a lot of non-excludable HCEs who do not benefit. BUT, you still need to allocate under the terms of the plan (and the terms of the employer's declaration of profit sharing). If the PS is declared as going to A, B and C but B got excluded by mistake, I see that as a problem. If PS is declared by each company separately, and A and C declare PS while B does not, then no problem (subject to testing of course). Remember, if the employer(s) designates each individual's PS then there should be declaration, documentation, memo, etc. as to that effect and as to the actual allocations.