CuseFan

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.

seconded

I think ESOP Guy's initial response was spot on. You can tell a former employee that you have no record of any further benefit due them from the plan, insinuate that they have been paid out, ask them to check there records and hope they go away - and most often they do. But if they don't, 100% burden of proof is on the sponsor - so whenever someone (client or co-worker) asks how long a PLAN SPONSOR should keep records, my answer is always FOREVER. And there is no reason not to convert old paper records into electronic copies and retain. The big problem is that plan sponsors can't jump in their Deloreans and go back to the 70's and 80's and restore the paper records they lost/destroyed prior to the electronic age, together with their impression that their providers were responsible for maintaining all those records. For some, it could be costly case of wishing they'd known then what they know now.

Yeah, kind of like college athletics recruiting - or apparently now just college entrances.

correct - employees get income (and tax w/h) reported thru w-2 but non-employee directors must be reported thru 1099.

No, you misunderstood, sorry if I wasn't clear. GTL taxable is part of W-2 pay and is included if the plan does not further excludes fringe benefits, but is excluded if the definition excludes fringe benefits. And thanks, hoping to get a crack at #1 seed Gonzaga, but Baylor will be a tough game. Hoping I can last the game tonight as it's way past my bedtime! At least this year we didn't have to sweat getting into the tournament!