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excess is to be allocated ratably over 7 years beginning in the year of the transfer IRC 4980(d)(2)(C)(II)

Remember to check the "first return" box on the first 5500-SF filing.

All good information. Thanks for the leads and background.

I’ve got a potential new client who owns a carpentry business. He and all of his employees are collectively bargained, and participate in a Union Money Purchase Plan (they also get collectively-bargained health coverage). If the owner were not collectively bargained, I’d feel comfortable saying that he could set up a new DB plan just for himself, since all of his employees are collectively bargained and therefore excludable from N-D testing. What’s not clear to me is whether he can set up a new plan just for himself, given that he himself is collectively bargained. For reference, here is the general rule from 1.410(b)-6 (highlight is my own): (1)General rule. A collectively bargained employee is an excludable employee with respect to a plan that benefits solely noncollectively bargained employees. If a plan (within the meaning of § 1.410(b)-7(b)) benefits both collectively bargained employees and noncollectively bargained employees for a plan year, § 1.410(b)-7(c)(4) provides that the portion of the plan that benefits the collectively bargained employees is treated as a separate plan from the portion of the plan that benefits the noncollectively bargained employees. Thus, a collectively bargained employee is always an excludable employee with respect to the mandatorily disaggregated portion of any plan that benefits noncollectively bargained employees. Any insights are welcome.

Why can't the plan be amended to use a fresh start without wearaway? A participant's total benefit would be the sum of the net accrued benefit as of the fresh start date plus the new formula accrual after that date.

It's possible that the FSA claims amount to more than has been withheld from paychecks so far. If that's the case, the employer needs to withhold enough from the final paycheck to forward to Wageworks who then will forward it to the employee.

The salary deferral agreement that Relius provides includes language re: the participant's duty to review pay records. The participant's failure to report a discrepancy is deemed to be an election to defer the amount actually withheld. Perhaps the opt-out paperwork includes something similar.