CuseFan

Ouch! KEB, I'm not stating a preference, I am a baseball guy above all else (except maybe college basketball), but simply describing the landscape as I see it.

You have a 60-90 advance NOIT window, so assuming NOIT issued 12/2, you can push PPTD back to 3/3 (double check your day count to be sure), which gives you a few days to pound out the 500 AND the notice of plan benefits to participants (NoPB) - but need to communicate the change in PPTD to participants as well. This may or may not be possible. If you can pull if off, great, but if not, I think you have to start the process over beginning with a new NOIT and PPTD timeline. The PBGC is very stringent on their plan termination rules and timelines.

We have done this for a client because they needed more deduction room. The owners could have also used to load up on CB benefits but interestingly chose not to do so. You'll need to comply with prevailing wage (PW) law, so immediate entry and vesting, and deposits at least quarterly (probably same in DC). The potential downside is you have a defined contribution credit amount (3% per your thoughts) - if someone's PW was less than 3%, you still have to credit 3%. If you're leveraging for cross-tested HCE benefits, now you have to provide gateway. For my client, we have a 5% credit because we needed the deduction room, but some people worked partially on PW projects, but mostly on non-PW, so ended up getting more than they would otherwise. This was not optimum, but was sacrifice worth the added deduction and HUGE cost savings on payroll taxes that would have been due if paid out as current compensation. Whether in a DC or CB, employees view this money as their compensation and you'll see them requesting their distributions the day after they terminate even with the 10% penalty tax. Then, if this is a seasonal industry, the following year/season they are back working and it starts all over. Admin on these arrangements is a bit more involved than your standard CBP. Good luck.

Funny! Gambling, including fantasy leagues and contests, is why football has replaced baseball as America's pastime (a long time ago).

Depends on what the plan says. If it says the age 62 account balance or actuarial equivalent thereof, then there wouldn't be a subsidy. However, if it specifically allows for commencement of the normal retirement benefit (annuity) unreduced, then you have a subsidy. Assuming your age 62 lump sum is the account balance and not the PV of the unreduced age 62 annuity, the subsidy would only happen for an annuity.

The non-vested benefit would have/should have been forfeited after 5 consecutive one year breaks (but check and confirm plan provisions - always). If re-employed, I believe the employee would have been entitled to the prior two years of service because he did have some nonforfeitable benefit (the employee contribution portion), but that would not change the prior forfeiture as post-break service would not impact vesting on pre-break benefit (again, check your plan language). I don't see how a plan termination would reinstate the forfeited benefit. Also, just because in the plan's database you may still have been carrying the non-vested benefit doesn't mean that it's not forfeited - it is or isn't based on plan terms, not record keeping practices.

It's just the green revolution - touted to save the environment (which it does) - but the real purpose of which is to save the RK some green(backs). Cut and dried. We certainly do all we can to have participants elect paperless as much as allowable, but it's not a negative election. They get paper unless they affirmatively elect otherwise.

Yes, always refer to specific plan language, but I would view the bonus as a separate payroll because it allows for a separate election, and match accordingly.

but cannot rollover the portion that would be an RMD from the plan for the current year.

I must have missed that in Circular 230!

Love the graphics!

Thinking of this in an ESOP context - I don't think the principals can guaranteed the loan, it can only be secured by the stock of the leveraged company, right? So isn't this kind of a parallel situation?

QDROs can and do get created and issued posthumously. I don't find this extraordinary.

The latter - assuming the participant truly dies before the ASD, provided the plan language supports, in my opinion. I've read some plans that say the election gets followed, so just make sure. Also, be careful as to what you consider the ASD. If the person retires and receives forms for a 9/1 ASD but doesn't return valid forms until 8/31, or 9/3, so payments don't get scheduled to commence until 10/1 (initial double payment) but then dies 9/15 - ASD is still 9/1 and person did not die before their ASD, so QJSA applies, not QPSA.

Nor is being a tax dependent. I was able to cover my daughter, living and working full time hours with multiple employers (gig economy free lancer) in another state until she turned 26, four years after she stopped being a dependent.

If you are making a required payment under the terms of the plan and do not need participant consent to do so, make the payment, withhold the taxes and inform the recipient that (s)he has received a taxable distribution in accordance with the terms of the plan, it will be (has been) reported to the IRS as a taxable distribution and failure to endorse the check will not change or delay the timing of this taxable event. In other words, put the fear of God - er, IRS - in them!

That is spot-on Madison. Agreed. The key here is that the employer must maintain complete and accurate records and has good internal controls. Lack of controls and records almost certainly guarantees most favorable resolution for the employee.

to clarify, my "no" was to this question, not your first one.

no, but just because they may also get a 3% contribution, that may be a profit sharing contribution for the HCE group rather than a safe harbor, and the rules for that are different.

I thought the regs said you could move deferrals not needed to satisfy the ADP test into the ACP test. So if you pass ADP and have some room left over, you can shift to ACP test. I don't think you can reclassify deferrals into ACP test and purposely create an ADP test failure and trigger reclassification of HCE deferral as catch-up. I believe it all starts with ADP test results and flows from there. This is recollection as i don't do these tests regularly.

Does this work on affiliated service groups as well? If AC is an ASG and BC is an ASG, but A & B have no relation or ownership overlap, do I have two ASGs or one ASG = ABC?

agreed, as long as the tax withholding and reporting are done properly and the checks are timely issued so there's no float benefit to the employer, should be no problem.

GTL is excluded from 3401 compensation but included in W-2 compensation definitions unless specifically or categorically (with other fringes) excluded.

I would "run" unless you get a written commitment/service agreement (and commensurate fees) for the client to run a TOTAL data clean up project. I would also further instill in the client that they have fiduciary duty to maintain records sufficient to properly administer the plan. A plan like this would have DOL and IRS auditors salivating.

Great questions - welcome to the facts and circumstances nebula, also known as the Twilight Zone. We often have these arguments with clients. It would be nice if IRS and/or DOL would just draw a line in the sand that everyone could see and abide by. But, if you need facts and circumstances, we usually suggest looking at how the employee is treated (retired vs. employed/not retired) with respect to all the other employer's plans and benefits - life, health, etc. (still covered, offered COBRA). If the person is treated as retired (or not) for all other purposes by the employer, chances are you can justify same for retirement plan(s) - consistency over accuracy - that's what the actuaries kept telling me for years!