CuseFan

I've seen both. I thought I read on this forum that IRS will inactivate an EIN/TIN after X number of years of inactivity. If that's the case, what would be the reason to get a separate TIN for a solo owner plan upon start-up, for example, where the lone participant maybe 10-20 years or more from retirement distributions? Also, if inactivated, does/can the same number get reactivated when requested, is it gone forever, recycled elsewhere (that would be a problem), does the sponsor have to apply for new TIN when it's actually needed? Just trying to understand the necessity or best practice aspect versus wasted or duplicate efforts.

Mr. Peabody and his pet boy Sherman can do anything!

Yes, the employer and not the union runs the plans but the union can (and should) collectively bargain the retirement plan provisions. Sounds as if you are an HCE and in the union, and that plan fails ADP testing requiring you get a return of some of your deferrals, correct? You can discuss with your union hierarchy responsible for negotiations to consider asking for a safe harbor in the 401(k) plan come the next collective bargaining agreement.

Actually, if he owns both then it's a control group rather than an ASG, but treatment is the same.

After filing formal claim, if you get nowhere I would go to DOL first, the last thing a plan sponsor wants is a disgruntled plan participant or beneficiary complaining to the DOL. A follow up "threat" of such to the Plan Administrator may move them to action. An ERISA attorney could also help but legal counsel is not free. Good luck.

I would show it as a transfer from the plan on line 8j.

Not only acceptable, required.

Agree with all of the above - usually see SHNE when plan also has cross-tested PS and if in combination with a CB plan. When owner is just looking to defer maximum with as little employee cost as possible, then it's always the SHM. The situations in between then usually depend on the owner's or owners' attitude (and pockets) toward employee benefits.

Similar to QPs, first thing to do is read the document.

and that the document allows for the allocation in the manner you propose

Those limitations apply to the benefit - so in a CBP you need to convert the account balance into the NRB per plan terms. Also, you then need to look at maximum lump sum versus the account balance.

What happens when someone with an existing loan incurs a seasonal layoff? Like CBZ asked, are they considered on leave with repayments suspended? Or does the plan allow direct off-payroll repayments from the participant? Absent any specific plan/loan program documentation otherwise, I would likely treat similarly. But, ultimately, the Plan Administrator has the authority/obligation to reasonably interpret the plan.

So 2024 401(k) RMD done, then rest distributed via R/O check by 12/31/2024. Will this be the only IRA once established or are there others? If the IRA did not or could not include the in-transit R/O as part of 1/1 balance and there are no other IRAs, then would that not create a situation where no 2025 RMD was due? Is that something IRS would let fly? If that were the case, then everyone would say close my 401(k) account the last week of the year and then mail me a check, or someone could simply hold their R/O check for nearly 60 days to establish IRA in the next tax year. And maybe that's ok. In this case, the well-meaning philanthropist could possibly delay RMDs until 2026. If she has other IRA money then it doesn't matter. Anyway, interesting tax year anomaly and one I think should be posed to her accountant.

Does the plan document support in-kind distributions? I think that would be a requirement and then note it applies to everyone all the time. Otherwise, I don't think he can simply have his loan distributed/offset in total without also taking a total distribution. He could accomplish his objective doing that and directly rolling over his non-loan assets, having the loan offset taxable piece but no taxes withheld. If he really wanted to keep his other money in the plan then he could roll back. Even if plan had in-kind distributions are you all comfortable with someone just deciding they don't want to repay so they take as a distribution? Another option, but has a cash cost, would be a $50,000 taxable distribution, $10,000 withholding and $40,000 net cash used to pay off loan. This results in $10k more as a taxable event with all of such extra being withheld and then much being recovered later via assumed tax refund.

I don't have a ton of experience on these but I suspect not. If the filing has been made, can be proven/documented, and correction measures were of the pre-approved sort, then I see no issues if such a letter was delayed. If the desired correction was more aggressive or "outside the box" then if there was an examination before a closing letter was received, either the issue would be deferred to the EPCRS process and excluded or the EPCRS application maybe gets accelerated into the examination and resolved then. If you know the issue is resolved and just need the letter, even less an issue I would say. The potential downside for a client on delayed closing letter receipt is if they are waiting on letter before completing a relevant correction and the passage of time results in an increased cost of correction (e.g., attributable earnings).

What about review of VCP applications, and determination letter applications for terminated plans and the upcoming DB cycle 3 restatement deadline for modified language adopters? VCPs and plan termination d-letters already face a serious backlog and time delay and now add on the cycle 3 and who knows what that does to timing. Maybe those reviews continue as critical, I don't know but I'm guessing not.

I do not think you can split a QRP transfer across two years or a reversion. Also, as those transactions are linked, I question whether you could do one in 2024 and the other in 2025. Say you had $100,000 excess, so you need to transfer $25k to QRP and do so in 2024. Then you wait until 2025 to take reversion, to delay the taxes, but you now have $76,000 left in the trust - your QRP falls short of 25%. Maybe you can split and maybe it doesn't matter, but you're going to have a 2025 final 5500 in either case, so why not just do it all in 2025, unless they want to allocation dollars for 2024. I just think it's risky to do that. I view the entire transaction as one reversion with the direct transfer to the QRP and the other a taxable receipt (like a lump sum with direct rollover portion and a RMD portion). This is just opinion.

Yes, you're good either way. It's a 2024 allocation/annual addition based on 2024 compensation/census, and whether you allocate all or 1/7 or something in between because they want to exhaust in less than 7 years, your 2024 starting point is correct.

You cannot cross-test an ESOP. You likely need to satisfy NDT on the basis of contributions unless the initial allocation was safe harbor and the subsequent adjustments are deemed safe harbor or resulted only in reductions to HCEs/increases to NHCEs.

To avoid any potential limitations imposed by the plan she could take a distribution and rollover to an IRA where she then has complete control over where it goes upon her death.

Mandatory disaggregation, so having separate vesting schedules for union/non-union should not present any BRF issues.

Agree with Bill, not a CG. Also, unless you have a management company situation I do not see an ASG here either as there must be some ownership overlap, which there is none. Multiple employer plans do provide some cost savings in having one document for each plan, but you can't then operate as one employer so is it worth that savings for a situation that (in my opinion) makes the arrangement susceptible to administrative errors issues in making sure everything is run, calculated, contributed, reported and deducted as it should be?

Thank you everyone for your valuable input. Would be nice if everything was always black and white but having this forum to navigate the gray areas is invaluable. Have a great weekend!

Pension plan unmarried participant elects life annuity with 10 years certain and names three children as beneficiaries for one-third each. Participant dies before the 10-year guarantee period ends so remaining payments are due to the beneficiaries. However, one of the three beneficiaries also died, shortly after the participant but before receiving any benefits if that matters. Are remaining benefits now paid to the two surviving beneficiaries at 50% each, or does the deceased beneficiary's portion go to that person's estate? The plan is silent, as are the SPD and benefit election/beneficiary designation forms. Nothing specifically allows for beneficiaries to also elect their own beneficiaries so I'm inclined to say split remaining guaranteed payments between two remaining children. Thoughts? Do you think it different if beneficiary had started receiving payments and then died? Unless there is a specific legal avenue we must pursue (reason for my question) I think we ultimately need to have Plan Administrator interpret and decide upon how proceed. Thanks

If you bring in an NHCE to Plan A such that it passes the RPT of 410(b) on its own then there is no reason to test A & B together, A's PS is safe harbor so no further testing and no gateway. If the NHCE you bring into Plan A is also in Plan B, be mindful of the aggregation for 415 limits.