CuseFan

Sometimes, but rarely - I have seen it long ago but not recently - upon DB plan termination benefits are transferred (not rolled over) via trustee to trustee transfer (options were an annuity contract or a transfer w/o spousal consent). This almost never gets done because you then have to maintain the legacy annuity options in the DCP and get spousal consent to opt out of the QJSA. I would be surprised if this is your fact pattern, but just in case.

Allocation schedule is from the RK showing all the contributions allocated to participant accounts. Payroll report might only show salary deferrals (loan repayments, safe harbor and match are possibilities). Auditor wants to verify what was withheld for a participant was allocated to the participant.

As directed trustee the person is taking direction from the Plan Administrator and/or possibly (for investment direction) the participants. That could limit this person's liability to the execution of those instructions. However, if it's the business owner, who is also the PA, it doesn't really matter, but if it's a non-owner officer, maybe CFO or CHRO, who is not exercising any discretionary authority then naming as a directed trustee has utility.

That is the correct question - when did the EMPLOYER sign? I don't see an issue with the staggered trustee signatures.

Yes, I know for certain the MO situation does not apply, thanks for the confirmation.

My reading of the ASG rules for A-org or B-org groups (management organization does not apply for my case) is that there must be at least some overlap of ownership for two entities to be an ASG, is that correct? I have two service corporations (S-corps) that are each 100% owned by separate unrelated persons. They provide their services together under the same brand/joint marketing, so to the public it looks like ABC company, but each company X and Y has it's own book/P&L. I believe the rules say that there must be some ownership overlap between the A or B organization and the FSO, am I missing anything? Thanks

The RBD is 4/1/2020 but the first distribution calendar year is 2019, so agree with EG.

If you have cross-tested PS then I would say yes.

If a person can only participate if their compensation exceeds the 401(a)(17) limit, their total contributions exceed the 415 limit, if they must first contribute salary deferrals up to the 402(g) limit, or are otherwise limited by ADP testing, then I would say that constitutes "solely". If, however, anyone at or above a particular level/position, such as officers or other top management (i.e., a top-hat group), may participate and contribute without regard to the existence of any of the aforementioned limitations, then that would not constitute "solely".

That is the money quote! If you have ever thrown anything away (or taken some similar action like this consolidation) thinking this will never be needed again, only to feel the dread when the need for such arises a year or two or three later, then you know. If you have never experienced that feeling, then give it a shot! All kidding aside, if it's a matter of (your) convenience then I would make absolutely sure it can never come back to bite you on the tushy.

Probably - I think someone is either (actively) employed or terminated. If terminated, then obviously there is no need for in-service distribution. If not terminated - so no distributable event - then I think you're considered employed and eligible for in-service distribution assuming all other requirements for such are satisfied.

concur - that is a fairly standard practice, especially for (very) large plans

In general, no. However, many NQDC plans do have some payment flexibility built in, where you are allowed to the change the timing and form of payment that was otherwise locked in at the time of deferral. The requirements to that are you must make this new election one year prior to the current distribution start date and must defer receipt of payment for at least 5 years thereafter. If you have already terminated, or will terminate within the year, I believe it is too late. If you expect to retire say 5/1/2020 then you can elect now to, instead of 5 annual payments beginning 5/1/2020, get 10 annual payments beginning 5/1/2025, if my understanding of the 409A rules are correct.

if under the income threshold for Roth IRA contribution.

As usual, Tom is spot on. "Seasonal" is an hours or other time based classification similar to part-time, temporary, etc. and you cannot categorically exclude such employees, but you can hold them out unless/until they work 1000 hours in a computation period. As noted, the plan document must provide for this and once in, always in, unless truly in a proper category of ineligible employees.

Yeah, love these legislative acronyms, but still waiting for the Working Toward the Future Act - although a colleague said he thinks most could be called that.

Absolutely. We have had some DB clients stop their plan terminations at various stages for various reasons - market losses, annuity costs. We've also had plans that were frozen for a few years decide to unfreeze, so that happens as well. Have never seen a plan freeze in anticipation of termination and then halt the termination and unfreeze - but there is no prohibition against it.

There is a difference between required and advisable. Unless the plan is ongoing beyond the end of the RAP 4/30/2020, there is no requirement to restate. However, because you need to ensure the plan is up to date regardless, it may be advisable to restate although that is still no guarantee depending on any interim legislative changes. We've been lucky that they've been extremely minimal during this DB cycle.

They have a 415 limit of $4,666.67, 1/12 of $56,000, plus a 401(k) catch-up of $6,000 available to the extent other limits are reached, so yes, you could say they effectively have a $10,666.67 415 limit.

of course it would - it makes perfect sense, would improve the flow of simple vcp applications and also ensure that complicated matters get to the right people from the start - which is why it will probably never happen!

Taxable distribution to participant of $160,000 and 1099-R for the same, what he did with the proceeds does not impact that. However, if the plan directly transferred the funds to the charity without reporting as taxable distribution to participant, then it likely violated the exclusive benefit rule.

and that is a bad outcome? oh wait, that would lead to government efficiency, never mind.

Not arguing that point at all, just that the intent was clear. And we all know the path of clear intentions are paved with muddy waters - or something like that!

That is a fairly standard provision now in any pre-approved DB or DC plan. I can see both ways. If divorce automatically revokes the (now ex) spouse as primary beneficiary, it is true that the primary beneficiary has not pre-deceased the contingent beneficiary, but the reason now is because there no longer is a named primary beneficiary, not because the primary beneficiary is still living. So it is as if the primary beneficiary designation were left blank and the contingent beneficiary was completed - which brings us back full circle - is that a valid election? That is, would the PA accept a form completed in such a manner from an unmarried participant? Personally, I think the participant's intent here was clear and that interpreting the above questions in that manner (Father gets the death benefit) by the PA is the proper way to proceed - but interested in what legal counsel my opine. Please report back if you remember.

First, not an auditor and second, not taking the other side - and you may know for sure (or maybe not) that it was one DOB in 400 that was incorrect, and presumably 3 genders among the same count, BUT the auditors had, I'm sure, a much smaller sample size and so this looks more material to them than it does to you or the plan sponsor. If I'm doing QC and I see 3 out 10 problems, I'm going to conclude that there are issues or control concerns with +/-30% of the population rather than think I happened to sample all or a majority of the issues by chance.