CuseFan

Exactly, same as deciding whether to offer loans, hardship withdrawals, etc.

Is this really a "leased employee" type of arrangement? The "employer" does not seem to be in the employee leasing business. Also, just because the contract says X is the employer does not necessarily mean that it is the sole employer, and that A, B and C are not also employers of these employees. It seems more like a shared employee situation. I think Darrin Watson has addressed shared his thoughts on employee sharing - I would try handy dandy Google.

Check to be delivered by Jason Vorhees of the Crystal Lake post office?

Exactly. Although 4/1/2018 is her RBD, 2017 is her first distribution calendar year. This is a qualification requirement/issue for the plan so there are no options on this.

The document should be very specific about that - whether pre-tax salary and 125 deferrals are included or not. If you have an adoption agreement, it might be a check box or you may have to go to the basic document. Even an individually designed plan is supposed to specify that. Very rarely have I seen a plan compensation definition (for allocation purposes) that excludes those items.

Why can't the excess be distributed from the 401(k)? It was ineligible to be in the SEP so it was not eligible for rollover. Just like rolling over excess amounts from a plan to an IRA, where you have to withdraw from the IRA to correct, what makes this different?

Amen

I have seen plans that say if the participant has made a valid election for an optional form but dies prior to the ASD that the election is honored, or the actuarial equivalent of the benefit (100%) gets paid - but most plans say if the participant dies before benefits commence (i.e., ASD) that the QPSA rules apply, which would nullify any elections that may have been made. The waiver is specifically for the QJSA, so pre-retirement spousal rights are not waived/consented. If a spouse signed a consent to a QPSA waiver and then the participant retired shortly thereafter they would still need to execute QJSA waiver/consent for something other than the J&S. Unless the plan explicitly says differently, i think the QPSA provisions trump the participant elections if (s)he does not survive to the ASD.

are you searching for a unicorn here? i hope not, good luck!

yes, on 12/31/2018. the 2017 in-service should not include any RMD since still working

Love the conversation here! Let's try another context - different but similar. HCE has excess deferrals and/or match in 2016 due to failed ADP and/or ACP test. HCE dies in January 2017 before testing is done and corrective distribution determined. Plan pays corrective distribution in March to who? Estate or death benefit beneficiary? Again, a required corrective distribution and not a death benefit - who gets it? Let the arguments commence! (What better to do on a Friday afternoon? Certainly not 5500s!)

i guess their thought was that the surviving spouse would get the (100%) lump sum so the QPSA is satisfied - which may be true, although when does someone designate a beneficiary for a lump sum? - and their opinion is that the spouse already signed off. However, that waiver was for the QJSA, not the QPSA, and I also think the plan is then paying out more than it should. Thanks for your input.

Thanks guys. My first thought was it couldn't be eliminated but changed my mind as I researched a little and was looking for some confirmation. Enjoy the weekend!

Why do my colleagues save up their questions for Friday? Participant in DBP makes a valid election - assume lump sum, and all the forms are properly completed and submitted - for an annuity starting date of 10/1, but the participant dies today (9/29). Unless the Plan states otherwise (which I've seen, but rarely), I believe the QPSA provisions of the Plan apply and the benefit election is moot. Furthermore, I think Plan language is fairly explicit that if the Participant dies prior to the ASD his/her surviving spouse gets QPSA. My colleagues were thinking election should be honored.

Plan QPSA is defined as 50% survivor annuity but the Plan provides a total death benefit that is actuarial equivalent of 100% of the accrued benefit. The portion of the death benefit above and beyond the QPSA is an ancillary benefit, but is it protected or can the Plan be amended to eliminate it?

I agree with you that the missed 2016 RMD that would be paid now is a corrective distribution and not a death benefit distribution, and in that regard is due to the (now deceased) participant which is now represented by his estate. I think the only way it can be paid to a beneficiary is if it is a death benefit and, I believe as you do, this is not a death benefit.

My parents must be of the same generation as Belgarath's because I heard the same thing growing up - and it carried weight as there were (and still are) six of us.

also, if the comp limit comes into play for the owner, if you terminate before year-end then you have to pro-rate the limit, right?

A recent post in this forum discussed this issue in a similar context and the issue was raised that a new plan would be considered similarly to an amendment of the prior plan when looking at discrimination. That is, you terminate one plan with employees and start a new one in the same year but without employees and then provide an employer contribution in the second plan. Not saying yes or no, but it's a gray facts and circumstances situation.

From Form 8554 (ERPA Renewal): • You must complete 72 hours of Continuing Professional Education (ERPA–CPE) over the three-year enrollment cycle to remain active. This must include at least 2 hours of Ethics CPE each year. • Exception: If this is your first renewal, you have to complete 2 hours of CPE for each month you were enrolled, including 2 hours of Ethics each year. If you have re-taken and passed the ERPA Special Enrollment Examination (ERPA-SEE) since your last renewal, you are only required to take 16 hours of CPE, including 2 hours of Ethics, during the last year of your current enrollment cycle. The Form seems to confirm what the IRS agent said, although I agree with RBG with respect to following C230. On another note, what November conference provides over 70 hours of ERPA specific CPE? Heck, I would automatically renew you on the spot for sitting through that!

Well, if they are separate for coverage ("dispensation") then they are separate for nondiscrimination.

This is why there are the M&A coverage and nondiscrimination testing transition rules. You can treat as separate entities for the rest of 2016 and all of 2017 provided you don't amend coverage or benefits. That gives you time to analyze the aforementioned mess and make prospective (2018) changes to the plans to ensure future compliance.

Fees are currently for various documentation assembly and representation and answering questions. I agree that if we got into issues and necessary corrections that could be a different story. Thanks

Thank you both for your input. The plan does allow for payment of expenses. We typically suggest counsel opinion in gray areas, but the fee will be immaterial to both the plan and the employer, so likely not worth that hassle. Was hoping it would be more black and white - I'll suggest they pay directly to avoid any potential issue just in case. Thanks again.

Client's plan is being audited by IRS. We provide support services to the client/plan for the audit and charge a fee. Is that fee eligible to be paid from plan assets?