Luke Bailey

I'm with EBECatty on this one, at least without further facts. Very likely a service org, although the facts are insufficient to reach a conclusion. In my experience, "investment advisory and asset management services" probably means people in an office, with computers and nice furniture and décor, but making money entirely from fees and commissions earned by advising other people, called clients, about their investments. The phrase would typically not be used to describe the business of a partnership or LLC, like a PE or hedge fund, in which the "managers" all have equity stakes and get K-1's. I would advise BTG to get a more complete description of the business of the entity in question. Ideally, BTG could review copy of the business's financial statements and look at the ratio of revenue to invested capital, but they may not want to share.

Bill, just to make sure everyone understands , and to provide the cite to applicable regulations, you're saying that the SH plan could have been terminated (since it was a stock acquisition) before close and then it would have been treated as safe harbor (no ADP or ACP testing) for its short year through the termination under Treas. reg. 1.401(k)-3(e)(4)(ii), had it actually terminated an not been merged? The acquirer's plan could have added the target's employees immediately, which would have blown 410(b)(6)(C), but would probably have work out ok?

It's 411(a)(10). The guy is fully vested under plan, so you would be amending to provide a lower vesting schedule. Can't do that. Note added 8/3/2020: I think 411(a)(10) is the statutory support, if the answer is correct, but the conclusion is quite possibly incorrect. See Gruegen comment and my comment on Gruegen below.

Correct.

chibenefits, a percentage deferral election in 2020 before the amended is adopted should have used the plan's definition of compensation. Most likely the match should have as well, although if it is an end of year discretionary match, conditioned on end of year employment, you should be able to change retro to 1/1.

Belgarath, I have always viewed these as rules of convenience that enable partners to contribute to K plans, e.g. with last day of year election. Agreed.

Loyalty at that level is inspiring in a way, but I'd still like the citation!

It seems to me that some TPAs are just that, i.e. recordkeepers and distribution processors, but most also do retirement plan consulting (compliance and/or planning). There are also some consultants who do not do recordkeeping or distribution processing. So for a firm that does it all (except the legal or actuarial work), a good term would probably be "Retirement Plan Consultant and Recordkeeper." If the firm is qualified to do actuarial work, then "Retirement Plan Consultant, Actuary, and Recordkeeper." Just a thought. Actually, I've thought about this off and on for years as it comes up, and never could think of a good name.

Wow, Larry, do you have a cite for that? Let's change the example a bit. Suppose I have a 5% money purchase pension plan, calendar year, and I freeze it as of June 30 and say that I'm not terminating yet, just freezing. Employees get 5% of their W-2 comp through June 30. Suppose the business is profitable and the owner has $200k of SE income for the full calendar year. You're saying the owner can't get $5,000 contribution for the year?

supernole, you can have a SEP and a Keogh at same time, you just can't use the IRS 5305 SEP form if you have a Keogh, but rather need to use another approved SEP document that would have provisions to coordinate with the Keogh. If using the IRS 5305 SEP form is your ONLY error, probably a pretty easy fix in VCP. But there are a lot more rules you may have violated, e.g. if you had other employees or made contributions to both Keogh and SEP. You need to have someone review all of the facts.

cpc0506, I agree it does not seem to be prohibited by Notice 2016-16, and therefore would appear to be permitted. But I believe that the ability to do Roth is required to be included in the annual safe harbor notice, so you would need to follow the notice provisions of Notice 2016-16 for changes that affect annual notice.

I think ERISA still applies, but Congress nevertheless wants you to file EZ as one-participant plan.

Scuba 401, I'll be interested in what others have to say on the topic, but it seems to me that the IRS studiously avoided tackling this issue in Notice 2020-50. I think there is a position under the statute that if the cure period had not ended for the loan by March 27, then you could suspend the payments due after March 27, 2020, until first quarter 2021. But the payments due before March 27, 2020 would not be suspended, so the window has now closed. In other words, if someone missed, say, their March 31, 2020 payment, obviously they are squarely within the relief if the employer chooses to apply it, because the first missed payment is after March 27. If someone had missed the February 29 payment, and then later, by June 30, 2020, caught up the February 29 payment, they should also be covered and not have a default if the employer applies the CARES Act suspension. But if they did not catch up the February 29 payment by June 30, they would have a default in the second quarter, because the due date for the February 29 repayment was not suspended, and so their loan would be deemed in the second quarter of 2020, even though the March 31 and later 2020 payments would have been suspended. If the individual terminated before July 1, 2020, so that they would have a loan offset distribution rather than a deemed distribution, then they could claim CRD treatment for the loan offset, assuming they qualified as COVID-affected, or of course roll it over under the regular loan offset rollover rules.

On closer examination, I think you're right, Kevin C. Treas. reg. 1.401(k)-3(g)(1)(E).

Larry, I think we may be saying sort of the same thing. The business will have a full year. I'm just saying half of the full year comp is what he or she earned through June 30. Company would resolve now to contribute X% of that to the "terminated" plan's trust, just like they could have resolved next year to contribute X% of 2020 comp. Just trying to make it simple.

AmyETPA, Treas. reg. 1.401(k)-3(e)(4), which you should look at for detail, treats a short plan year in connection with a termination of the plan as if a full year, i.e. you are still safe harbor for short year. But you have the same notice requirements as if amending to drop safe harbor, but continuing plan.

Maybe achieve the same result through a sole proprietor "written resolution" to make a contribution for 2020 based on comp through 6/30 (2020 comp divided by 2 for sole proprietor)? You would still need to keep the trust intact until contribution made.

Dave, agreed. I had paid insufficient notice to that point in your OP. Good luck.

You can ask, and if you get it, it might help, at least tactically, if not in court, but as others have pointed out, it may not be enforceable. If there is any bona fide dispute or ambiguity about the amount owed or how to calculate it, a properly drafted release might be both appropriate and enforceable as a settlement of a disputed benefit claim. However, if the participant has not complained and the calculation has not gone through the plan's claims procedure, it probably should not be viewed as a settlement.

I would rephrase, but same thought: Company B establishes a new plan, and assets of Plan X are spun off into it. Then the questions' answers are clear. And if it is individually designed or there is any other reason for wanting a DL you can submit as new plan.

I think so. Would include "4I" for plan characteristics code in welfare plan list on page 1. Since most severance is unfunded, you might not want to combine if your H&W plan is funded and requires an audit.

One of these (most likely the percentage method, unless the percentages increase over time) is going to result in an acceleration, the other in a deferral. The former is generally a violation of 409A, the latter typically is OK if, as Xtitan points out, you comply with the 5-year rule. The analysis will also be affected by whether the plan says that the entire installment scheme is one payment, or each installment is a payment.

Lois, thanks for pointing out that there is a little glimmer from IRS regarding what they think the term means. However, it is obviously not authoritative in any way, and, as with 86-142, does not address investment advice, which does not seem to fit well within any of what the IRS enumerates in the section you quoted as either included or excluded.

ESOP Guy, given your informed analysis is it clear to you that the production and retail ends of the biz are treated differently for 280E? Just curious.,

FYI, Coleboy, the issue is presumably the IRS's general position that since pot is still illegal at federal level, marijuana business cannot deduct expenses. That exhausts my knowledge of the subject.