CuseFan

Can A & C fully fund B to terminate or is that too much cash? A as the fiduciary may try contacting PBGC for consultation on what may be done.

w/o 80% control I don't see how that is possible. If B has no operations then what is it's purpose, is it solely in existence as sponsor of this underfunded DBP? Assuming B has no assets and only DB liability, A or C taking the other's share of B in exchange for a payment covering their newly assumed liability is what neither is willing to do? Or are there other issues with B such that neither A nor C would want full control and responsibility? Why would A or C even want to merge B w/o proper compensation? Is B's plan being funded now at all and by who? Are A & C pumping cash into B solely for this? Is there a reason not to just let the plan "fail" and go to PBGC?

Look at the 436 provisions in the document/AA. From this it doesn't look like you can go back that far and may need an amendment. From IRS Publication 5139: Line c. The plan may provide that benefit accruals that were not permitted to accrue because of the limitation of section 436(e)(1) (described in line IV.d. of the worksheet) shall be automatically restored when that limitation ceases to apply if the continuous period of the limitation was 12 months or less and the plan’s enrolled actuary certifies that the AFTAP for the plan year would not be less than 60 percent taking into account any restored benefit accruals for the prior plan year. 436(i) 1.436-1(a)(4), 1.436 1(c)(3) https://www.irs.gov/pub/irs-pdf/p5139.pdf

Peter, are you asking when the determination of 5% ownership gets made? I don't know for certain, but drawing a parallel to the HCE rules I would say if they are a 5% owner at any time during the applicable calendar year (2027).

It looks like the goal is to cover "direct" owners while excluding other HCEs including spouses and/or children, and only covering the lowest paid NHCEs while excluding higher-paid NHCEs. I think you would have to satisfy coverage via ratio percentage, that this would not be a reasonable classification for average benefits testing. A bigger hurdle may be the IRS anti-abuse rule on including short service NHCEs while excluding other NHCEs. It's facts and circumstances and does not matter if you satisfy coverage and nondiscrimination, I don't believe. I would not recommend such a design unless the facts and circumstances support all facets (primarily the lower paid NHCEs NOT being short service employees compared to the NHCE population).

Lois, that is my understanding and about to opine such until scrolling down to your post. Once the participant dies, if the primary beneficiary is living, that beneficiary becomes the account owner, so to speak, and any secondary contingencies the participant had are moot.

If the documents were written that way.

Remember, each contribution source - 401k, 401m, 401a is a "plan" that must satisfy coverage. If the solo 401ks have deferrals and PS, then adopting 2024 retro PSP for NHCEs fixes the PS but not the 401k. Not sure how you fix the 401k part when the missed deferral opportunity is because there was no plan.

Thanks Corey.

You only need to make sure that no EIN/PN combination is repeated. There is no requirement of which I'm aware that mandates sequential plan numbering.

Was the ASG a relatively new development or does it go back years? If the former, might they avail themselves of the M&A transition rules? If the latter, only fixing prospectively is risky.

Peter, who the heck knows? So many clichés about chaos and ineptitude come to mind I'm just paralyzed by the choices to comment. Maybe things will be different come 2029 if there is still an IRS by then, but thankfully won't be my concern any more.

Congrats on the scholarship, but more so on the decision to further your professional education. Wish more practitioners took that approach and more bosses supported such, evidenced by some of the questions we see on this forum. Even if you do not get that support, attaining a designation (and having a bit of experience) will only serve to improve your personal marketability and, with modern technology and the proliferation of remote work, enable to find the right place to practice and continue to learn and develop with organizational support. I can't opine on either organization's designations but over the years have found ASPPA and it's related entities to be a great resource. I have had less exposure to NIPA. Good luck with your continuing education and your career!

Yes, the cash out threshold is now $7,000 if a plan chooses to implement. Amendment need not be adopted until the end of 2026 but be sure to document the decision and implementation timing because amendment must match operation. Cash out, however, does not mean simply paying a lump sum, it means providing the 402(f) notice and the ability to make an affirmative election (rollover or payout) with at least 30 days to decide, and then making a default IRA rollover if no affirmative election is made within the minimum 30 day election period.

Agreed - this is definitely a compliance consulting project. The first year set up and identification of all relevant issues noted above will be the most involved, then ongoing it's mostly data collection and manipulation. This is not trivial, nor are the ramifications if not done properly, so you should charge commensurately. This is where we as consultants earn our money.

Effen is correct - for benefit determination you need not use consecutive but for 415 FAE hi-3 it must be. Also, and this applies to traditional plans with employees that are integrated with social security, you lose 401(l) safe harbor if you use average of non-consecutive years. We took over a plan where prior actuary amended for non-consecutive years for the client (via an "end around" on the AA) but never told them their safe harbor design went away and they needed to general test.

Yes, if 7/31 is the termination date you would calculate your contributions for 1/1-7/31 and also test that period if needed. Technically, not a short plan year, at least for filing purposes, as the plan is still in existence until assets are distributed. The timing of deposit will depend on what the plan requires, if anything specific, and the employer's tax year/return due date. If the employer continues on and only the plan is terminating, then deposit could possibly not be due until next year.

The only consequence of having an IDP is the inability to request and secure periodic ongoing determination letters. Some view those cycles as a safety net while others see an unnecessary cost and inconvenience. If you modified a preapproved document, those changes would have to be substantial. I've yet to see any plan with modifications that IRS rejected from preapproved status.

Hence now your previous employer - congrats on resolution.

We'll see - usually it's the services and oversight we want that gets cut and what we wouldn't mind seeing wither away remains!

No, that is absolutely correct, why else invest in such property?

Be prepared! I've had my ERPA since 2010, renewing in 2012, 2015, 2018, 2021 and 2024 based on CPE for the 3 years prior cycle. In every renewal except the last one in 2024 for the 2021-2023 cycle, I self reported w/o issue. Last time I get an email from IRS saying there isn't documentation for my credits and I need to provide ERPA-compliant certificates for all the sessions I attended those prior 3 years. Most of my credits were satisfied with ASPPA recorded sessions for which I got certificates but which were not ERPA compliant. I had to go to ASPPA and ask that they re-issue about 30 CPE certificates in ERPA-compliant form (needed IRS program number) - and now I've heard they aren't too keen on doing that. Then I package everything up and submit only to be told that I'm short credits because I had 3 Ethics credits each year and they only count 2. Nowhere in the renewal instructions or Circular 230 did it say at least 66 non-ethics credits and 6 ethics credits in a 3-year cycle - it said at least 72 credits of which at least 2 each year must be ethics. So I had to attend a couple sessions in 2024 to apply to the 2021-2023 cycle, which won't count for 2024-2026 but, to be honest, I'm done and letting it lapse. I work with enough enrolled actuaries and we have other ERPAs, I don't need the aggravation. I know another one of our forum contributors was going through similar scrutiny and dickering with ASPPA for compliant documentation. I feel sorry for those of you who really need to maintain that designation for your practice. Sorry - rant part deux.

Does that document automatically include all employees of employers in the CG or must affiliated employers adopt and, if so, did this one? IF the ONLY issue is missed deferral opportunity I would be inclined to make a 3% QNEC. That's the assumed NHCE ADP in the first year of a prior year ADP tested plan, right? It's also the SHNE rate, which also make 3% the reasonable correction in my mind.

You got that right! First they eliminate the requirement that an ERPA have a PTIN, which I and many others dropped because why go through the cost and trouble to keep renewing. Then well after that (years) they require program providers to report directly to IRS, using what, a PTIN of course. Now, a number of program providers do not give session attendees an ERPA-compliant CPE certificate that includes the IRS program number, and IRS will not accept such deficient documentation. I had to beg ERISApedia for an ERPA compliant certificate because I registered w/o a PTIN. At this stage of my career and ERPA cycle, it's not worth getting another PTIN. I think IRS is trying to accelerate ERPA extinction through forced attrition rather than natural retirement. Sorry, I haven't had a good rant in a while and was overdue!

That link you showed looks like a bargain, I'd say start the free trial and see if it lives up to expectations.