C. B. Zeller

Are the PAs in an affiliated service group with the partnership? (Probably yes - this is the classic ASG scenario, and it would explain why the three doctor partners are able to participate in the partnership's plan even though they are not employees of the partnership. However an ASG determination is highly fact-specific, and the standard advice to consult an attorney applies.) Assuming this is an ASG, then the one doctor could adopt his own plan, but it would have to be aggregated with the partnership's plan for testing. Keep in mind that includes not just benefits (ADP/ACP, etc) but also availability of benefits, rights and features, so he can't for example have an investment in his plan that isn't available to the employees of the partnership.

The preamble to the 2025 proposed regulations also mentions 3121(b)(7) service as an exclusion: https://www.federalregister.gov/d/2025-00350/p-47

Just to be clear, are you looking for a present value calculation using some set of 430/404/417(e) segment rates and either the 2024 or 2025 417(e) mortality table for a given attained age and retirement age? It's not a trivial calculation, although with some effort you could do it in Excel. What software do you use for valuations? I'm sure your software can do the calculation and give you a result.

These are the ones listed in the reg (formatted to be easier to read):

The 401(a)(4) reg lists 9 separate mortality tables that may be used, plus the 417(e) applicable table, for a total of 10 mortality tables. Since you can use any interest rate between 7.50% and 8.50%, in 0.01% increments, that's a total of 100 possible interest rates. So there are a total of 1000 possible combinations of mortality table and interest rate, or 1000 possible APR tables just for cross-testing! I don't think anyone has all of them posted somewhere free for download. I would suggest just picking the ones you use most often and downloading them out of your software.

Even if the plan issues a 1099-R reporting no known exceptions, the individual can still show that they are exempt from the penalty on Form 5329, filed with their income tax return.

It's actually not in 414(s), it's from the definition of "Plan Year Compensation" in 1.401(a)(4)-12. So it's not technically correct to say that it's a 414(s) definition but it is nevertheless allowable for most testing purposes.

Are you using the option to disaggregate otherwise excludable employees from testing? If so, the employees who haven't met 1 year of service (i.e. those who aren't eligible for profit sharing contributions) wouldn't need to receive the gateway minimum. In general, the definition of compensation used for allocations does not dictate the definition of compensation used for testing. You can use any allowable definition of compensation for testing.

The good ol' IRS Rollover Chart explains it clearly: Roll from: Qualified Plan (pre-tax) Roll to: Roth IRA Allowed: Yes (with a footnote) Footnote says: Must include in income.

The instructions for schedule SB line 15: Personally, I usually find it simpler to certify an AFTAP (even if it's not needed) than to create an attachment to the SB.

Correct. All plans maintained by the employer or by a predecessor employer are treated as a single plan for purposes of applying the 415 limit. 1.415(f)-1(a)(1)

If it's a successor employer then the DB plans are aggregated for purposes of applying the 415 limit. In other words the distribution from the prior plan will reduce the max you can accrue in the new plan.

At 50% ownership there is not a controlled group. It would depend on whether the new company is a "successor" within the meaning of 1.415(f)-1(c).

I have a feeling I know which recordkeeper you're talking about. I agree completely, applying additional payments of principal to offset future interest is unsound. I don't think you'll find that rule in any IRS regulation; it is simply not how loans work. If you are going to stay with this recordkeeper then you may want to modify the plan's loan policy to disallow repayment amounts other than the scheduled amount. A participant could request a re-amortization if they want to accelerate their payoff. Again, if I know which recordkeeper this is, then they have a function to request a payoff quote for an employee who wants to repay their loan in full; if the amount generated by the quote is deposited within a certain timeframe then it will correctly apply it to principal and treat the loan as fully repaid. If allowing random repayment amounts is important to the plan sponsor, then they should find a new recordkeeper, as the current one does not meet the plan's requirements. They should let the recordkeeper know why they are leaving, if they choose this route.

Have they ever worked 1000 hours in a year? If not could you test coverage on the basis of disaggregating otherwise excludable employees?

Earlier this year, the IRS released proposed regulations under section 414A. Proposed 1.414A-1(d)(4)(ii) says that "For this purpose, the number of employees that the employer normally employs for a taxable year is determined using the rules of Q&A-5 of § 54.4980B-2 of this chapter." https://www.federalregister.gov/d/2025-00501/p-188 54.4980B-2 Q&A-5 defines "employer" by reference to Q&A-2 of the same section. Q&A-2(a) defines employer as " (1) A person for whom services are performed; (2) Any other person that is a member of a group described in section 414(b), (c), (m), or (o) that includes a person described in paragraph (a)(1) of this Q&A-2; and (3) Any successor of a person described in paragraph (a)(1) or (2) of this Q&A-2." For an employer who chooses to rely upon the proposed regulations in their current form, I would conclude that they are required to include other members of their related groups when determining if they meet the exemption of 414A(c)(4)(B).

If you're using the average benefits test to pass coverage, then remember the average benefits percentage test is only part of it. You also have to pass the nondiscriminatory classification test, and part of that test is that you have to have a reasonable classification. Excluding (or including) people by name is deemed not reasonable. So if you pick and choose which of the people who would otherwise be not benefiting to now receive a benefit, I think you fail to have a reasonable classification and therefore would lose the ability to use the average benefits test. But like Bri said, check your document. If it has a 410(b) failsafe, then it probably brings people in automatically, but chances are it brings in enough people to pass the ratio percentage test. Which might be more people than you were expecting.

Rev. Rul. 84-69 (emphasis added):

A TPA, actuary, or other service provider assisting the sponsor with their submission should naturally charge a reasonable fee for their time. However the PBGC does not charge a fee for a coverage determination.

PensionPro might be a little overkill for just plan restatements, but it can certainly do the job. They will help you customize data fields, projects and cycles for your needs.

It is possible to revoke an S corp election, but you have to notify the IRS. https://www.irs.gov/forms-pubs/revoking-a-subchapter-s-election

My mistake then - I misread the post as a CB plan. Anyway, DB top heavy minimum is defined in 416(c)(1)(B) if you want to check the 2% number. It should also be spelled out in your plan document.

Well you're not asking the question clearly - you want to know what WHAT percentage would be? The pay credit? The DC contribution? The increase in the DB accrual? I think what you were asking is what would the pay credit be. And my answer was that the top heavy minimum, when provided in a DB plan (even in a cash balance plan) is NOT a pay credit. It is a life annuity benefit.

The top heavy minimum benefit in a DB plan is a 2% of the participant's highest 5-year average comp multiplied by years of service, with a maximum of 20%. Years in which the plan was not top heavy may be excluded. If you're asking what is the pay credit, I suppose the plan could define it as whatever amount will make the accrued benefit equal to the top heavy minimum benefit. You would need to see if your plan document is written that way however. I don't think I've ever seen that in a plan document. Usually it will just say that the accrued benefit is the greater of the actuarial equivalent of the hypothetical account balance, or the top heavy minimum. If the participant's accrued benefit is the top heavy minimum (and not the hypothetical account balance), then 417(e) applies.

1.401(k)-1(b)(4)(iv)(A) says that if a plan is using the option to disaggregate otherwise excludable employees for 410(b), then it must also disaggregate for ADP testing. There is nothing that permits disaggregation for ADP if the plan is not utilizing the disaggregation option for 410(b). A similar rule is found in 1.401(m)-1(b)(4)(iv)(A). 1.401(k)-2(a)(1)(iii)(A) and 1.401(m)-2(a)(1)(iii)(A) provide for a special "early participation" rule that allows you to include otherwise excludable HCEs (but not NHCEs) in the ADP/ACP tests. But again, this only if you are using disaggregation for 410(b).