CuseFan

Tom, is that your song or did you "borrow" from Derrin Watson, it sounds like one of his?

i have a hard time believing that would be ok with respect to the SH contributions as it directly affects them, and that is what IRS wants to prohibit. i don't see an issue if the comp def was changed just for the PS, as it's these non-SH provision amendments they've softened up to.

or you can take a lump sum from the DB at RMD time and calculate the RMD in the same fashion. by doing early you avoid having to do the two piece payout, R/O eligible and non-R/O eligible RMD

My client's plan is a 403(b) and not a MP, they used to have both merged MP into 403(b). i do occasional ad hoc consulting for them, the plan is with TIAA-CREF.

I have a tax-exempt client with a similar type of plan. Employees must make 5% pre-tax salary deferrals as a condition of employment. Interestingly, as these are not elective deferrals - they are non-elective deferrals - they do not count toward the 402(g) limit.

maybe it's ok, but i just remember taking over a nightmare plan with a number of doctors who each had multiple policies with loans, to the individual docs, that were in excess of limits and sporadically paid - i ran screaming after came to and swore at the colleague who brought the plan in. that same plan owned the building the docs practiced in and leased it back to them. oh the good old days!

yes, that is very odd. the NTIP used to get included but then the IRS said it didn't need to be, but it sounds like they want it again. at first I thought they wanted some statement if the NTIP wasn't provided, but the instructions are a bit murky. maybe if you are the type of plan that doesn't need a NTIP you attach a statement to that effect. however, the instructions also say that applications checked "no" will get returned. so if you answer no and include a statement - like this is an owner-only plan - will it get returned? and as the IRS continues to be resource constrained we can expect more of the same. i had been checking yes and not including the NTIP, but I can't say I've used the Jan 2017 revised form yet.

exactamundo - that trick only really works with solo plans

Agree with all, but back to the real estate - be careful, the plan must provide for in-kind distributions AND they must be offered to everyone. All it takes is one disgruntled smart-@ss employee or former employee participant to demand his/her slice of that property. Of course nothing like that ever happens in real life (which if you believe, I've got bridge to sell to someone's profit sharing plan!).

nope, you are correct

i would question how policy was "rolled" into the plan and yes, the $90k loan is an issue. Personally, I don't like in-plan insurance and prefer to let those who do take care of such plans.

Agreed - i believe you must enter into the agreement at least one year prior to retirement or you do not get the advantages of 3121, so I think you're stuck with pay as go full FICA and Medicare. I agree with X that 409A is also in play, which could impact the ability to modify payments, if desired.

that trend will certainly continue. good luck EastCoast

The employer remits the tax when due then withholds from SERP payments until employee portion is recouped, so it may be that the first few SERP payments don't get paid, depending on the amount of Medicare taxes versus the SERP payments.

what about being acquired and becoming part of a bigger national organization?

those payments are most definitely subject to payroll taxes. even bona fide deferred comp is subject to payroll taxes at some point in time. if this is a structured installment payment buyout then maybe it's not earned income.

Agreed, amend eff 1/1/18 to exclude those employees from the definition of eligible employee, no problem, but you need to do so prior to 1/1 and also notify the affected employees in advance, in accordance with ERISA 204(h), either 45 or 15 days prior to 1/1/18 depending on whether the plan is over or under 100 participants.

you'll need to catch them up at some point because once you hit the five-year mark the remaining balance is a violation/PT, right?

participants can be allowed to purchase their life insurance contracts from the plan (for fair value) - but not sure if you can restructure it that way after the fact. policy comes out - no tax implications because it is a purchase - cash goes into plan/participant account and then distributed out to participant, rollover eligible. that's what you want to accomplish right?

plus the deferral limit is individual calendar year limit, which can result in some weird looking PY 401k contributions - but if SH, testing isn't an issue and if payroll has the proper controls/shutoffs, shouldn't be an issue. having a fiscal year plan helps if you add a second aggregated for testing plan like cash balance, because they have to have same PY to combine for testing.

Whenever I hear of plan sponsors asking about "alternative" investments the first thing that comes to mind is they are looking to somehow benefit themselves and since they don't have enough disposable money to do this on their own outside the plan, or maybe even enough in their own plan account, they try to justify putting employee/participant retirement funds at risk so they can take advantage of this unique opportunity. Unless, and only unless, this alternative investment is prudent for retirement funds and is made solely in the best interests of plan participants (not the owner/plan sponsor) will it be OK. A colleague owned a piece of a racehorse than ran in the KD a few years back, and she ended up with net income when it was all said an done, but that didn't mean it was a suitable 401(k) investment. The fact that an LLC has to be established and the plan could not directly invest in this asset leads me to believe it would not be retirement plan suitable and a big fiduciary mistake.

I can relate - can't decide if it's funny or just makes me feel old when all the "kids" I work with don't get my pop culture references - and way more recent than Beatles. Just yesterday, a reference to Stevie Van Zandt (E Street Band, Sopranos, Lilyhammer) got numerous "I don't know who that is" - you're killin' me Smalls!

If you're testing comp definition for nondiscrimination, the inclusion percentage is the 96.52%.

Yes, the 436 restrictions apply to the accrued benefit in total, not the traditional and cash balance benefits separately, so in this case the $15,000 lump sum is well below the restricted limit.

So if they don't use the software for trust accounting/account balances, forget about testing, what are they using it for at all? Almost sounds as if they licensed the software solely for the purpose of providing the internal controls reports. Yeah, fraud and breach of ethics immediately come to mind. We use spreadsheets with the best of them, but not in place of a valuation system, and not while purporting to use that valuation system. Wow.