CuseFan

I don't recall when it became effective but do know it's been that way for a while, so 2007 wouldn't surprise me.

no issue, this gets done all the time and the exact reason you have individual allocation groups, so you can adjust individual NHCEs as needed to pass testing rather than increase everyone or do an 11g amendment.

Really, and I thought Oregon's neon green unis were obnoxious. But they played a great game so I have to give them their props and harbor no animosity to the Hokie Pokies!

It never ceases to amaze me how the IRS, DOL and industry practitioners have generally absolved the participant of any and all responsibility with respect to their contributions and retirement accounts. If I'm over age 50 and knowing/expecting/wanting to save more than $18,500 then I'm going to be damn sure my contributions continue. Or people who elect a contribution change and don't recognize (for months or even years - not a lie) that their contribution (or take home pay) never changed - hello, McFly! Yes, plan sponsors are responsible to properly administer their plans, but I think participants should incur some responsibility as well, especially if they have received multiple sources (pay stubs, quarterly statements, etc.) that clearly show any errors. Sorry, just my grumpy Monday rant because the 'Cuse got toasted Saturday at Va Tech and the wrong two teams are in the Super Bowl.

Basically, hitting the 415 limit prohibits the required actuarial increasing of delayed benefits, which results in an impermissible forfeiture of benefits under the plan and therefore requires the commencement of benefits. Plans that provide for suspension of benefits (and issue the required notices) can avoid actuarial increases for delayed commencement between NRA and age 70 1/2, but not after age 70 1/2.

ii) All other letter ruling requests (including accounting period and method of accounting requests other than those properly submitted on Form 1128, Application to Adopt, Change, or Retain a Tax Year, Part II of Form 2553, Election by a Small Business Corporation, or Form 3115, Application for Change in Accounting Method) (except as provided in paragraph (A)(4)(a) or (b), or (5)(a) of this appendix) $28,300 $28,300 I did see all other requests and $28,300 as the fee, which is a huge jump. Thanks

Agree with you - they were not the sponsor of the MEP and this is a brand new plan. There is no basis on which to use that as effective date. Furthermore, doing that would show a 2016 effective date for a plan for which you started filing 5500's in 2020 (for 2019 - the actual start date) - an invitation for IRS/DOL questions.

For what it's worth, I recall years ago a unionized hospital client had a similar issue with respect to such hours and credited hours were a direct factor in the determination of benefits. I think they got a legal opinion that those hours had to be counted, not sure if pursuant to DOL rules or the CBA, and went through a massive correction process to correct accrued benefit calculations.

Being nondiscriminatory is not automatic here because your HCE comp threshold is determined on the lookback year but you are excluding based on a current level of comp, hence the requirement that it apply only to HCEs.

The IRS User Fee Schedule (Appendix A, IRB 2018-1) does not show the user fee for an application to waive minimum funding and the Rev Proc refers back to 2004-15 which refers back to 2004-8, which shows user fees of $2,290 (waiver <$1M) and $5,415 (waiver =>$1M). It doesn't look like any of these rules have been updated. Are these still the fees or am I missing something? Thanks

Yeah, you can always general test for nondiscrimination, but if you do cross-test, make sure your gateway is satisfied on the basis of nondiscriminatory compensation (e.g., gross).

Yes, adding a DBP would make a lot of sense, the max contribution would depend on his age, but his profit sharing would need to be limited to 6% of W-2 pay because of combined plan deduction limit rules. If current plan is just profit sharing, a 401(k) provision should be added to get the extra $19k or $25k salary deferral in addition to the 6% PS.

His statement would show transfer out to AP's account, but that doesn't mean the AP has taken a distribution of the account from the plan. AP could still be maintaining the account in the plan.

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.