C. B. Zeller

It also says

Yes, they have to. Unless the assets are less than $250k, in which case, they don't have a filing requirement at all.

If the plan covers only a 100% owner and their spouse, then they should be filing a 5500-EZ, not SF.

Is it? I don't see anything in the text of that item or the items above or below it that would restrict it to the YOS match formula. There is the heading of course, but as it says in the basic document, headings are for reference and convenience only, and are not part of the plan document. It seems to me more likely that the coders at FTW put this item in the wrong place. You could always select "Special schedule" in D.8.f and describe it there. Something along the lines of, "a uniform percentage of Matched Employee Contributions not in excess of X% of Compensation"

Looks like it's at D.11.b in my adoption agreement. It's under the heading "Years of Service" which doesn't make much sense to me, but so be it.

Whoops. Missed that part. Then I agree with Bri, it's still a deferral election, it's merely late.

Not even late. For an owner with earned income, they have until their tax return is finalized to deposit their deferrals. For a sole prop that can be as late as 4/15, or even later on extension. I would have no problem saying that the establishment of an auto-$2k/month withdrawal constitues an election to defer $24k for the year. So just get the remaining money in by 4/15 and call it a day.

You only need to test them all together as one big group. Under 414(b), members of a controlled group are treated as a single employer for testing purposes. So if A, B, and C are all the same employer, and C, D, and E are all the same employer, then logically all of A, B, C, D and E must be the same employer.

Peter's info (as he is clear to remind us, not advice) is thorough and excellent as always. It sounds like the client is happy with the current tax situation, and ejohnke is just looking to correct the potential disqualifying defect of allowing a distribution that shouldn't have happened. Is that accurate? If the individual could have had a distributable event, but the plan didn't allow the distribution, could the plan be retroactively amended to permit it? For example, the participant is 60 years old, so amend the plan retroactively to 2025 to permit in-service distributions at age 59-1/2. Problem solved. If there really is no possible distributable event (don't forget that employer money sources can have much more liberal distribution restrictions than 401(k) deferrals), then you might still be able to get relief for the distribution (and leave the money in the Roth IRA) through VCP.

Stock sale or asset sale? If asset sale: A still exists as a shell company and the owner(s) of A can sign on behalf of A. The participants can take distributions right after the sale date since they are no longer employees of A. If stock sale: B is now the sponsor of The Company A 401(k) Plan and has the authority to sign. Participants can not take a distribution until the plan termination date. Termination triggers the successor plan rule and B may not be allowed to maintain a 401(k) plan for 1 year after the distribution date. This is why, with a stock sale, it is important to terminate the seller's plan before the sale date, or be prepared to merge the plans.

An IRA can not be part of a qualified plan. A Roth IRA can not be rolled over into a Roth account in a qualified plan. Just set up the new account. Do it right.

No, you can't self-correct the initial failure to adopt a written plan. See Rev. Proc. 2021-30 4.01(b) and Notice 2023-43 A-2(1).

Interest AND mortality. See Bri's response. There is no such thing as an annuity with 12 monthly payments made all at once. There is an annuity with annual installments, or an annuity with monthly installments.

Glad to hear it's working out well for you. In my experience, I've never seen the IRS try to bring the hammer down on someone who was demonstrably making an honest effort to comply. They are pretty lenient with waiving penalties as long as you can show you were trying.

To satisfy the RMD in a DB plan, the participant must commence distribution of their entire accrued benefit no later than the RBD. What does the plan document say about the available forms of benefit? I suspect it offers a few annuity options, with monthly or annual frequency. The participant would need to elect one of the available forms of benefit and commence distribution under the selected form. Conversion of the accrued benefit to the elected optional form must be done according to the plan document's rules. In regard to your questions, consider this: I'm assuming your acccrued benefit numbers are single life annuity amounts. What would happen if the participant commenced distributions as a monthly life annuity on 4/1/2026 at $1,090/month and then died on 4/2/2026? Now compare that to what would happen if they took $9,810 on 4/1/2026 instead. Do you see the problem? As an aside, this is why you should never do RMDs from DB plans as life annuities. Use a term certain only annuity without life contingencies, that way if the participant dies, the undistributed part of their accrued benefit is not forfeited. Alternatively, you can do a lump sum distribution of the entire accrued benefit, use the DC account balance method to calculate the portion that is an RMD, and roll over the rest. Just be aware of 436 restrictions and the 110% funded rule if you go this route.