CuseFan

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.

If it ran through regular payroll period then additional payroll and income tax withholding associated with the extra payment for the loan could be taken from his remaining regular wages.

The average benefits percentage test is a coverage test, which requires you include 401(k)/(m) amounts/benefits in determining an AB% for the Employer's group of plans. Then if ESOP satisfies nondiscriminatory classification and safe harbor percentage, and the AB% > 70%, the ESOP passes coverage on its own. What clearly can't be done is say that the ESOP and 401(k)/(m) together covers > 70% and so passes ratio percentage test. If the ESOP service provider is showing that, it's time to look for a new provider, but hopefully they are simply showing the scenario portrayed above.

This is perfectly fine provided the amounts are treated as compensation (for all purposes) to the son - which would be the case regardless of status of HCE or NHCE.

Thanks CBZ, I was going to repeat that. Send, withhold taxes if required, re-issue checks if necessary, issue 1099-R's and repeat annually - that is the plan's obligation. A letter/notice to participant from the IRS might change his/her disposition but until then, the plan needs to comply even w/o cooperation.

1120S is a sub-S return, so it appears this is a sub-S corp in which case only the owner's W-2 compensation is considered and any profit/loss pass-through on the K-1 is irrelevant to his compensation.

Thanks Tom. I thought "long-term part-time" was defined as >500 hours in three (consecutive?) years. For DBers - permanent relief for frozen plans, including 401(a)(26) now as well, and for those in the small DB/CB space, the ability to adopt a new plan after year end before tax return due date. Yay, Christmas and New Year's Eve with the family again (hopefully)!

ok, so I just saw in another thread that SH matches, if determined on payroll period basis, must also be deposited on an accelerated basis (end of next quarter I believe was what was noted) - but still, determination timing and deposit timing are different.

So I look at that language and it says when the Employer is allowed to make contributions, which to me means when they are allowed to deposit - and Employers can deposit on a payroll period basis and calculate/determine on a plan year basis and true-up after year-end, or they can calculate on a payroll period basis but not make the deposit until tax return due date, can they not? The way plan provisions are spelled out here is important. Usually, the general reference is to the plan year, in which case I think you are bound to do a plan year calculation (so year-end true up) unless the document specifically calls for the determination/calculation on a payroll or other time period basis. Again, deposit timing is not determination timing, in my opinion.

or the CBP contribution would be limited to 6% to come in at/under the 31% combined deduction limit

Agreed, and using accrued to date methodology would seem the most logical.

Each separate matching schedule must pass BRF testing (which can be done by satisfying the safe harbor nondiscriminatory classification ratio percentage of the average benefits test).

Agree with J, and if wife has 3 or fewer employees, the DBP can be limited to the owners, just need to be wary of combined plan deduction limits in addition to (of course) gateway and testing.