CuseFan

you can have non-key hces, in which case that doesn't help.

Agree with all - it's #1, and to jpod's point that she is still entitled to full 75% survivor annuity if she survives him. Also, I think he should be entitled to her current portion if she predeceases him, but (hopefully) QDRO addresses that - a well drafted one will.

that is absolutely OK

I think Bird is correct, only paid up allocated annuity contracts are excluded.

Class year vesting was eliminated a long time ago - there was a discussion on that here within the last month or so. The only way to do that would be to adopt a brand new plan every year and exclude service before the plan's effective date, but 4-year cliff still wouldn't be permitted, and I'm sure IRS would have big issues with this when they caught up with you anyway.

You can do it if you satisfy coverage, which for the SH-K would mean passing the average benefits test. When calculating average benefits percentages you include all plan and all benefits, including the ESOP.

Transition rule allows you to treat as separate employers for year of transaction and following year, so you would have through 2020 if desired. However, neither plan can be amended to change coverage or, if I remember correctly, benefits, otherwise you lose "protection". IMPORTANT - double check both plan documents prior to the transaction closing to make sure neither automatically covers all the employees of the control group. Also, if B becomes part of A rather than remain a separate company, you'll want to make sure A's plan has language that will exclude former employees of B that are now employees of A. I think most pre-approved plans have built in provisions to cover both of the above scenarios, but you should check, obviously, to make sure.

DBP amends its final pay formula as of 12/31/2012 and provides a new/better final pay formula effective 2013. The accrued benefit as of 2012 is frozen - benefit service and final average earnings - so total accrued benefit is A+B. However, the plan also limits benefit service to 25 years but does not specify how that limit applies with respect to the pre-2013 and post-2012 benefit formulas. The prior actuary (it's always a takeover case) applied the limit on the latest service. Extreme theoretical example, a person hired in the 1980's could hit the service cap under the old formula, work another 25 years (so 50 in total) and not accrue another cent, while a new hire in 2013 could work 25 years all under the new formula and have a substantially higher benefit than the 50-year employee. Putting the fairness argument aside, are there any statutory issues of concern here? If so, would it matter if the pre-2013 FAE was not frozen so that the service-limited person's benefit could increase for salary increases? Thank You and Happy New Year!

You all clearly did not drink enough eggnog during Christmas, get your moose mugs back out and see if you can get it right by New Years!

The five-year look back serves two purposes, I believe: (1) verifying that a partial termination did not previously occur and (2) collecting information to ensure that any partially vested participant without five consecutive one-year breaks and who was not paid out their full vested balance has been made 100% vested upon plan termination.

I think solo-K products/documents state there can't be any non-owner employees but shouldn't limit the ability to adopt a CBP. Certainly check if it's specifically a "solo" product, rather than a normal pre-approved plan simply adopted for a sole proprietor. Also, this late in the year, if the profit sharing max has already been funded (above and beyond salary deferrals, which many like to do as early as possible), your CB deduction may be severely limited by the combined plan deduction limits. The PS is more than 6% of eligible compensation then your total DB/DC deduction will be limited to 31% of eligible compensation.

Agree - just get the account properly titled, retain all the paper trail and move on. In no way could it be construed as a 401(k) account (rollover or otherwise) as there isn't currently and never was a plan document for such a plan.

457 plans for tax-exempt (non-governmental) employers are non-qualified plans and, as such, are subject to the claims of creditors (as is his concern) and are not afforded favorable tax treatment upon distribution (distributions are taxed as ordinary income, and you cannot roll over to anything except possibly another NQ 457(b) plan of another tax-exempt entity if such plan allows).

Yes, no and no. Depending on his level and history of SE income, a solo DBP may provide significantly more value, especially if he needs none of the SE income to live on.

and if your general test passes using average benefits, you have to bring the 401k and 401m contributions for that.

I never heard of them referred to in that manner as specific plans but I have at least one consulting client with a 403(b) plan with these mandatory contributions as a condition of employment which, as noted, do not count as elective deferrals but as employer nonelective contributions. Then the employee can max out on top of that, and my client throws in a nominal 10% of pay to boot! it is quite the plan for sure.

I look at this way - if A acquired B in a stock sale, then I view as if B was part of A all along and would consider 2017 ownership and pay under B as same under A. If an asset sale, then I tend to view as new employees of A and ignore 2017 ownership and pay under B. I fully agree with Tom on any reasonable manner, this is how I define reasonableness.

The due date to do this is actually 4/30/2020, and although you may not have changed anything, the provisions of the IRS pre-approved plan you adopted in 2015 have been updated. These plans are updated on a 6-year cycle, so you will incur future update fees as well - it's not just a one and done affair. If you would prefer not to have that sporadic cost you can have an attorney draft an individually designed plan for you, which you will likely never have to restate again but will need periodic amendments. If you think you were quoted a hefty fee for this pre-approved plan restatement, go the individually designed attorney plan route. My apologies to any attorneys who draft individually designed plans, I do recognize their value in the larger defined benefit plan market.

agreed. 25% deduction limit is not exceeded and no one exceeds 415, so no problem.

Tax w/h - FICA et al should have been w/h along the way - and agree W-2 is only option regardless, except death benefits if subsequently applicable.

Yes, no and everything everyone else said. Unless you have a solo plan, or investments only in MFs or stocks that can easily be split up if needed, forget about in-kind distributions.

Personally, I don't hold a lot of faith in many government entities, whether at the Federal, state or local level securing the most cost-efficient services, although still likely to be comparable/competitive or better than the small/micro market. But will there be legal fiduciary duty and sufficient oversight to avoid the backroom deals that exclude all but one or two preferred providers from legitimately bidding for such services?

also, remember 2016 contribution can be deposited up until 9/15/2017. and you have a funding deficiency for 2015 (and likely 2016) for which an excise tax applies, even if a massive contribution was made in 2018 for 2015, 2016 and 2017 combined.

Their motivation may be avoiding having the trustees' names in the SPD for employees to see, but employees are going to know who the CEO, CFO, CHRO are, so nothing is really gained there. Maybe it's to avoid having to go through hassle of amending the plan whenever there is a change. I don't see anything wrong with this provided the acceptances and acknowledgements of appointment and removal are done and who is a trustee at any given point is not in any way hidden from participants.

Maybe, but check your plan document options if you are using a pre-approved plan. Rollovers are usually limited to either participants or eligible employees - that is, employees who have not yet satisfied age and service but would become participants upon doing so. For example, if you excluded union employees from a non-union plan, you wouldn't allow them to roll into the plan would you? Why exclude HCEs from the Plan? Testing? Plans can limit HCE deferrals up front for testing purposes, or maybe even provide for a hard coded HCE deferral ceiling like 2%. Cost? Exclude them from the match. But they are participants and can roll over if desired. On the flip side, if I'm an HCE and precluded from otherwise participating in a plan, why would I want to rollover into that plan instead of an IRA unless it has a primo lineup of top performing low cost institutional funds?