CuseFan

Yes, sorry, I was over-simplifying.

Contributing more than 6% PS means the 31% combined limit applies - it does not mean that if your total DB/DC was more than 31% that just the excess of PS above 6% is not deductible, whatever exceeds 31% of eligible payroll is not deductible.

I think if it is control group then service has to count for eligibility and vesting. They just go from not an eligible employee to an eligible employee, similar to moving from non-participating affiliated employer to a participating employer, or from union coverage to non-union. Document language should specify and support.

What about SECURE Act relief, if the plan has been in existence long enough (5+ years) and not increased benefits within last 5 years?

Same RBD but with 72 substituted for 70.5 - so the 4/1 of the year following the calendar year in which the participant attained age 72 or, if later, retired. This applies to anyone who did not attain 70.5 by 12/31/2019 - those participants are under the old rules.

Why would you not? If you include this person and testing would then fail, do you think you then don't have to correct? If IRS audited do you think they would give the employer a free pass on testing with incorrect data?

I think any separation after NRA qualifies for retirement (and waiver of last day requirement), whether by death, disability, voluntary or involuntary termination.

Nope, it becomes effective for tax years beginning after 12/31/2019 - so 2020 plan years as you suspected.

yes, but he cannot get his RMD from the 401k plan into the IRA, the 401k plan must make its own RMD to the participant which is not rollover eligible in any fashion

Yes, plan document should clearly state whether she gets an accrual or not. Regardless, she is not statutorily excluded for coverage, nondiscrimination or minimum participation purposes.

What was the over/under? In all fairness to the PBGC, I'm sure the one person they have working on these is very busy. Very frustrating I'm sure, like waiting for IRS on a VCP submission.

As a DBP, participants are whole as the employer assumes the investment risk (unless it's a ROR CBP). If the employer, as a fiduciary, could be considered to have committed a breach, maybe they could do a restorative contribution/payment but not sure it would be deductible. The $100k recovery must go into the plan and there is no deduction for that. As you note, the net loss will flow through the plan's funded status and affect minimum required and maximum deductible contributions, so I would expect the employer would be able to make up the loss on a deductible basis if it so desired (unless already extremely over funded).

No. The plan is required to make the RMD and such portion of any larger lump sum is not rollover eligible. So if lump sum was $100,000 and the RMD portion was $20,000 then only the non-RMD portion of $80,000 may be rolled over. What the IRA owner does with the $80,000 IRA in terms of future RMDs/charitable donations is of no concern to the plan.

Yes, but as you know very well I'm sure, "can" does not mean "should".

For permitted disparity, yes.

1099R reporting goes to both the employee and the IRS, so even if you "filed" the undeliverable employee copy (not recommended) you still owe the IRS a copy.

Just going from memory and defer to experts out there if I'm incorrect but I thought bona fide severance arrangements were exempt from 409A.

so they answer to your question is no - if person was 70.5 prior to 2020 then they must continue RMDs

Depends - check to see how the form reads. Also need to know when the contingent beneficiary died in relation to the primary beneficiary. I could see situation where the lone surviving contingent beneficiary gets it all and I could see a situation where the deceased contingent beneficiary's estate is entitled to his/her half.

Vesting would trigger application of payroll taxes, unless you have a DB SERP formula with a pension offset where the present value cannot currently be reasonably ascertained.

Need more facts - is R the owner, is this an owner-only plan, or is R an employee/NHCE? If R is the owner and no employees/NHCEs impacted, then I think you can do at the 50% rate provided amendment adopted by 12/31. I don't think subject to 204(h) in general and even so, having not completed 1,000 hours, the expected rate of accrual for R for 2019 is zero, and it also looks like the future expectation is also under 1,000 hours a year - hence the lower hours (and lower rate) amendment going forward. So this amendment appears to actually be a benefit increase rather than a decrease. If there are other employees involved then all bets are off.

We have client in kind of a similar situation - benefit is 415 max but plan is over funded on a lump sum basis because the sole participant continues to work into his 70's (and is taking RMDs). However, the plan is slightly under funded I believe on the basis of a 100% J&S because his wife is significantly younger, so he can continue deductible contributions.

Not to be unsympathetic, but you certainly bear some responsibility here by not recognizing that the salary deferrals that were withheld from your pay were not in accordance with your election, if that indeed was the case. It still boggles my mind to hear stories on how various over or under adjustments to someone's pay go unnoticed for extended periods of time. If your salary deferrals maxed out 3 months earlier than planned (i.e., September rather than December), that is a 33% error (if truly an error) - how does that go unnoticed, presumably for the entire year and be a "big surprise"? I would sure notice a withholding error of that magnitude in my pay, regardless of how much or how little I made. If this was not the surprise, and you wanted the accelerated deposits, but were surprised by the lack of a true-up, then you either failed to read the annual safe harbor notice and/or SPD as applicable or your employer failed to properly provide those to you or their narrative was deficient, in which case (and the only case in my opinion) you may have a beef with your employer. Good luck.

I think you have the same 204h timing issue. Would not the increase in hours requirement result in an expected decrease in the rate of accrual? In which case your amendment could not take effect until after 1/1 and then participants would already have earned an accrual, at least on 2020 comp to date. Also be careful in case you have any flat dollar credits. If all participants were expected to work 1000+ hours then maybe the amendment would not necessitate a 204h notice - but remember that IRS can take a series of amendments and consider them as one, the reason being to prevent circumvention of various rules, which is what you are trying to do here, so a savvy agent (don't laugh people) could say you did not comply with 204h on that basis. I would tread lightly, do 204h now and freeze effective 15 days hence and provide minimal 2020 credit (assuming no flat dollar amounts, especially for HCEs). If the first 2020 payroll doesn't happen until 1/10 say, then maybe your argument can be zero plan compensation thru 1/3, for example, and so no credits on that basis. Good luck

That $400,000, if properly reported, will come to him via a W-2 from his (former) employer as it is (formerly deferred) compensation from that employer. So in no way may it be considered self employment earnings for pension purposes.