Larry Starr

Luke, be aware that not all preapproved plans operate in that manner. What you are really referring to is an adoption agreement formatted document, which will often have the options you mention in the boilerplate. However, the plan (adoption agreement) must still be amended as I noted in my response. We use preapproved documents called Volume Submitter documents and they are formatted as a single plan and trust with all the specific provisions incorporated and nothing that is not a provision showing up in our language. The document looks very much like an individually designed plan, which it really is (that is, we custom design each plan for each client), even though IRS has approved our documents as VS plans. Just, FWIW.

Neither; there will be a compromise that is very different than both of those bills, IMHO.

Pelosi's $3Trillion house bill passed by the house late last week also has this correction. IT WILL HAPPEN.

We have no idea what changes will occur; we can get changes from SBA, IRS, or Congress. Lots of different things are being talked about, including increasing the 8 weeks to 24 weeks; not starting the counting of the time until 60 days after all restrictions on the business are lifted; and others. The expectation is that we are going to get some relief (they really have to; PPP just does not accomplish what it was supposed to for, for example, restaurants, dental offices, and lots of others). As to the deductible amount, opinion is unanimous that this will change before the year end; Congress (both houses, both parties) have written to Treasury to change it. The house bill has that change written in to it. IT WILL CHANGE, but it hasn't changed yet. Stay tuned......

For once, the accountant is right! Maybe he read our Forbes article from this weekend (link below). I've also attached the 16 page manifesto we (four of us) wrote for LISI and for which there is a webinar this afternoon. The webinar registration link is in the first paragraph if you are interested. It's an hour and half presentation. Here's the link: LISIGassmanKetronStarrCameronPDF5_18_2020.pdf

My wingman! Thanks for the work. I'm getting old so I don't remember who was the presenter! ?

OK; so the above is correct. Now let's look at your original question: Can Business 2 just adopt Business 1 plan as an Adopting Employer, since they will create a Controlled Group? Would there be Plan Amendment needed only for that? They are absolutely a brother-sister controlled group. Thus, Company B is free to adopt the existing plan of Company A as an additional adopting employer. The addition of an adopting employer IS an amendment to the plan. I don't know what you mean when you use the word "only" in the second sentence; you need to make sure the proper process is used to add an additional adopting employer, which for us would be an amendment to the plan that we prepare and is adopted by the existing plan sponsor, the new adopting sponsor, and all the trustees.

Since this is different that what you said in the original post, let's have you be very specific. Tell me how much Mr. X and Mr. Y owns of Company A and Company B. It appears now that you are saying it is: Company A Company B Mr. X 50% 50% Mr. Y 50% 50% Is that correct?

Ummm.... is this understanding correct? You have Company A owned by Mr. X. Company B is owned by Mr. Y who is Mr. X's father. Is that the situation? Assuming they are of the age of majority, why do you think you have a controlled group? Neither owns more than 50% of the OTHER'S business, so why is it a controlled group? So first let's deal with that, and if what I think it true, then we need to talk about multiple employer plans if they both adopt the same plan.

Long ago settled that you could recover your basis from the distribution of cash when the contract was surrendered by the plan and you got the cash instead of the contract. It was unclear for a number of years but ultimately resolved that way. And no, don't ask me for a cite at this time.

Yup!

Sorry, but I can't answer a question that is missing important facts. It is important to know the relationship between R and P. There may or may not be a controlled group between C and the ASG of R & P (assuming there really is an ASG there, which I never would say is true without knowing the facts). It is possible to have a controlled group of R & P, and a SEPARATE controlled group between C & R. You can't give correct answers without knowing the facts.

I don't even want to think about your question unless we had the actual ownership percentages and relationships of the employers and owners. The answers can be very complicated. OR, you could just buy a subscription to Derrin's book as this is well explained in hundreds of examples. http://www.employerbook.com/

I agree; basically, I would say "ignore the whole thing"; life's too short. Eat dessert first!

"It's Good To Be The King"!

But Luke, this is what you said: "But only if the guy or his spouse had COVID (pretty dicey at his age), or suffered income decline due to layoff or reduction in hours (again, seems like a long shot), right?" And that is certainly NOT what is going to go on in the real world and that is certainly NOT the ONLY way and I feel it's misleading to say that without pointing out the reality of the rules, which is that there really aren't any! I didn't write this stuff; Congress did!

Wrong. The employee self-certifies that it's a CRD; there's lots of circumstances that will apply and no one is going to have to prove it. And as I said in my post, if the employer is not comfortable with that, do a trustee to trustee transfer to his IRA and then he can just take it out of there.

FWIW, if I had a client who insisted on this, we would tell him to find a new admin firm. There are a ton of problems, including that he is now responsible for the decisions made by the employees with regard to "bad" things they might buy. And an investment in an LLC is a bad one; how is it going to be valued? Is he willing to spend maybe $10k a year for a professional valuation of EACH of his LLCs that would stand up with IRS and in court? Lots of other problems (like changing capital gains into ordinary income, and more). Just say no.

Yes, that is correct. More than likely, the plan has language that requires that. Did you look at the plan language?

Well, if you think annualization is ok, then yes, if you DON'T fully vest the PW amount, you are going to have to annualize and that usually is more expensive than just paying the PW in cash to your participants. Your best source for resources is DOL: https://www.dol.gov/agencies/whd/government-contracts/construction/seminars/resources And specifically, the PW Resources Book: https://www.dol.gov/agencies/whd/government-contracts/prevailing-wage-resource-book

Agree; note also that New York does not allow for ignoring annualization at all (even fully vested contributions). If you are looking at a PW plan for a New York contractor, be very careful as they usually just don't work if there is non-PW work as well as PW work.

What does your plan document say about missing participants? Did you look?

Agree with Mike; I'm guessing your plan document (existing one) allows for those fees to be paid by the plan. Did you check the language?

NO... No..... no.... no.... no......

That's a little better; this is what you originally said: Can anyone provide me the IRC section for the 0.5000 safe harbor weighting for contributions? The real question actually has nothing to do with "safe harbor weighting"; it has to do with the method used in a pooled plan for allocating gains and losses. And yes, a standard provision (as used in our pooled plans) is the BOY account balance plus 1/2 of the contributions to be allocated for the year as the ALLOCATION BASE. And that includes employee deferrals, any non-elective or match contribution, and any profit sharing allocation. Now, to answer your implied question: you won't find any IRC section that discusses that, because there isn't any. Your plan document language is what obtains. Is that what your document says?