acm_acm

If you're worried about using the trustee-directed account as a QDIA, the your problem is with the investment vehicle that you're forcing all the participants to use.

How many will lie about their occupation? I remember hearing something about how many "missing" children there were after SSNs were required.

My 2 cents on the effective date - I would just start using the correct effective date going forward and have documentation ready for any questions later.

I agree with filing to get the SOL running, but I would be more worried about nondiscrimination testing including 401(a)(26) given that this is a collection of one-person plans in an ASG.

FYI they were even 8" floppies way back in the day. You can see one in the movie WarGames. (Shall we play a game?)

Either just family limit is allowed, and that can be allocated in any way between the husband and wife, or they each are allowed the single limit. It depends on whether one had "family" coverage covering both or each has single coverage. Any catch-up contributions can't be split regardless.

Like Lou said, you have to follow the plan document. Don’t assume anything. If there’s any ambiguity, the client needs to make the call (in writing to CYA) on how to proceed and should consider getting an ERISA attorney’s advice on the matter.

I’m not a 125 expert, but I don’t see how you wouldn’t have to aggregate. Otherwise you could have separate plans for HCEs and NHCEs or separate plans for each person in the extreme.

Wrapping all of this into one thought is to just do it and be done. The time spent thinking about it will be (or already has been?) more than the time spent just handing them the form. Done and done.

I would document the reason for the new election forms and have the client sign off on writing. If this doesn’t get fixed I would say the 401(k) plan could have a qualification issue if the in-service distributions weren’t allowed by plan terms. If that’s right, then that might be the stick to get the employer and adviser onboard and moving.

Re trustee - it’s an owner-only plan. Usually the owner is the trustee, no? The bank is just the custodian. They still shouldn’t be allowed to switch the account type though. Move the money quick.

It's been a while since I dealt with a GF plan, but I seem to remember there is an allowance for increasing co-pays and deductible amounts (but not co-insurance %s). It's tied to inflation with an anchor pretty far back in the past now. That might help, but I'm not sure whether the change in the network itself is an issue or not.

The OP says "If you defer something other that 2,4,6...then match is 100% of deferrals." If literally true, that would mean if you defer 3% or 5% you get 100%. Is that true? If so, then I think you would have an issue of the match rate increasing when going from 3% to 4% (100% to 150%).

Reimbursement for coverage obtained elsewhere is not taxable for retirees, as long as it’s in a “retiree-only” plan. You would at the least need to set up an HRA/Section 105 plan for just retirees. Doesn’t solve the OP’s issue though.

I.e., if this change is being done so the owner(s) can pump in a lot of after-tax money, it likely won't work as intended.

I think you would need to have division D in a separate plan and make sure both plans would pass 410(b) on their own. Others here will be able to verify.

Be careful. As another poster said, it's the 5th anniversary of participation, not 5 years of participation, which often requires 1,000 hours in a plan year. I've seen this messed up several times by people just saying (and thinking) "5 years of participation". The actual words matter. It's best to not even say it that way.

Minor typo: An overspent FSA when dropping COBRA is just like an overspent FSA when terminating employment.

Yes. in fact, what downside would there be to just letting it be 1/1/23?

Seems like ACP testing still applies, but if there are no HCEs besides the owner, then no problem.

There are only two employees, so they would OK with a DB as far as 401(a)(26) is concerned. "On each day of the plan year, a defined benefit plan must benefit the lesser of: 50 employees of the employer, or the greater of: 40 percent of all employees of the employer, or 2 employees (or if there is only 1 employee, such employee)."

I'm not an expert on this, but I would think you measure the total benefit obligation, FT, etc. and then treat the buy-in annuity as a plan asset valued at cash/surrender value.

Can't one use a different discounting method for the IRS versus PBGC purposes? If so, the IRS has no say over the discounting method used for determining PBGC premiums, filings, etc.

One thing to consider when documenting the loan provision is that Moody's publishes lots of "bond rates". It would be best to precise about which rate will be used.

I think the point is that one can exclude a class of employees (drivers, sales, etc.) and then neither FTers or LTPTers in that class would enter the plan.