C. B. Zeller

If she turned 70½ in 2019, then her required beginning date was 4/1/2020. RMDs due 4/1/2020 and 12/31/2020 were waived by the CARES Act, so her next (first) RMD is due 12/31/2021.

The first question you're going to have to find out, then, is whether you can get the recordkeeper to issue a corrected 2020 1099-R. It may be difficult or impossible depending on their systems. If the participant was a qualified individual, and the default occurred after the effective date of the CARES Act, then you could probably say that the final payment was deferred for 1 year. It would have to be increased with interest, of course. Notice 2020-50 said that the scheduled repayments had to begin in January 2021, but since there were no scheduled payments in 2021 I think you can make an argument that she would get a full year suspension from the original final payment date. If she was not a qualified individual, and she is past the 5-year limit from the original loan date, then she is out of luck. However if she is still within the 5-year period, then the plan may be able to correct the defaulted loan under SCP by having her repay the amount with interest.

Coverage test is always needed. It might automatically pass if there are no nonexcludable HCEs (or NHCEs, for that matter) but that is a different story. Assuming semi-annual entry dates: Senior manager A and regular slob B are both hired on 8/1/2020. A makes $30k/month, so $150k in 2020. B makes less. A is HCE for 2021 and B is not. A's entry date is 7/1/2021 and B's is 1/1/2022. If they were the only employees then the plan has a coverage failure for 2021 since the HCE is a participant but the NHCE is not. Contrived example aside, you have to test using the 6 month eligibility for everyone every year, even if you don't actually hire any senior managers that particular year. The otherwise excludable rule is available, and it may help you pass testing, or it may not.

It's allowable as long as it passes the coverage test. You have to test coverage using the most permissive age and service conditions, so any employees who are not senior managers, who have completed 6 months of service, would have to be treated as non-excludable in the test.

I don't see why not. Amend the plan to name B as the plan sponsor, and revoke A's participation in the plan all at once. I would make it clear in the amendment that prior service with A is included for all purposes.

Once the money is withheld from your paycheck, it becomes an asset of the plan. Since your employer did not promptly deposit those contributions into the plan, they have likely engaged in a prohibited transaction under ERISA. As Lou S. mentioned, the correction for this error is for them to make up the amounts with earnings and deposit it to the plan. If your former employer is not responsive, you could get the Department of Labor involved, as they are the government agency with jurisdiction over participant rights in retirement plans. https://www.dol.gov/agencies/ebsa/about-ebsa/ask-a-question/ask-ebsa

IRC 404(a)(6)

I am not intimately familiar with the rules around investments in collectibles, but the document you attached is talking about DC plans. I don't think it would apply to a DB plan, even if the business owner, who is presumably also the trustee, is the sole participant.

Are you sure? Just because the number of affected employees is less than 20% does not make it not a partial plan termination. It's always a facts and circumstances determination. An employer-initiated mass termination is usually indicative of a partial plan termination.

No. Even though 402(g) is on a calendar year basis, 401(a)(30) is on a plan year basis. They can do two catch-up limits in the first plan year, though.

What kind of disaggregation are we talking about? Otherwise excludable employees? I'm going to say yes, your testing elections for ADP and ACP would typically be independent of each other. There might be some cases where one would depend on the other, like if you have QMACs you are counting in the ADP test or shifting deferrals to the ACP test; I would have to look up the details of those rules to be sure.

To be honest, I am not sure. I have never encountered this situation. However, the way I would approach it would be more like a change in vesting schedule. As long as nobody's vesting percentage is reduced by the change, then it should be fine. I would measure those vesting percentages both on the effective date and on the last day of the year. In other words, if somebody would have gained an additional year of vesting service during 2021, but wouldn't under the amendment, then I would make sure to grant them that additional year anyway.

You might be thinking of an S corp, where this rule is designed to prevent the shareholder from taking all of their compensation in dividends. Sole proprietors (and partners in partnerships) are not employees and should not receive a W-2 from their business. There might be some unusual cases where this would not be true but that is the general rule.

Not a QPLO. See Example 2 in 1.402(c)-3 which is almost the same situation.

A distribution will not help over-funding. What they need to do is stop contributing until the benefit accruals catch up with the plan assets. Is the participant already at their 415 limit? How old are they? If the plan is relatively new, and they still have several more years to retirement, the current over funding might not even be an issue. It's not an uncommon strategy to juice the contributions in the early years when you have more income, and let the benefit accruals catch up in the later years if income drops off. I have found that reminding sponsors (and advisors) that reversions of excess assets are subject to a 50% excise tax helps them take the issue of over-funding a little more seriously.

If participants are under 80 then the 80-120 rule doesn't apply.

The 80-120 rule is always optional. Once you are below 100 participants, you can file on SF even if you filed the full 5500 the previous year.

Compensation is in B2, deferral amount is in C2 Put the deferral rate in D2: =ROUND(C2/B2,4) The calculated match rate in E2: =IF(D2<.03,D2,IF(D2>.05,.04,.03+.5*(D2-.03))) The match in dollars in F2: =ROUND(B2*E2,2)

Have you asked your employer about the missing amounts? What was their reply?

Are they requesting a cash distribution or a rollover? If they are requesting cash, then it's fine. If they are requesting a rollover, then there is the possibility that they could fail to take their RMD if they terminate before 12/31/2021. In order to avoid that possibility, they should take at least the amount that their 2021 RMD would be, if 2021 were a distribution calendar year, based on their account balance at 12/31/2020 and their current age, as a cash distribution and roll the rest over. It might help to remind the participant that if they fail to take their RMD there is a substantial excise tax that they would be responsible for. If they ultimately refuse to take enough of their distribution in cash, and it later turns out that a 2021 RMD is required, then a corrected 1099-R should be issued showing the RMD amount as a taxable distribution and only the remainder as eligible for rollover. The participant would have to be notified that $X amount of their distribution was not eligible for rollover and should be removed from their IRA.

See section 6.07 of rev proc 2019-19

Assuming that the plan uses the maximum permissible cure period then I believe you are correct. Given the flexibility for self-correction of loans under the current version of EPCRS, they could probably restart payments and keep the loan going even if the cure period had expired.

1) Yes, but the entire suspense account has to be used up within 7 years if they want to avoid the excise tax on the reversion. The amounts allocated are still subject to the annual additions limit, so if it's just the two of them, and they are allocating (let's say) $35k each per year that ends up as only $490k allocated after 7 years. Make sure you will be able to fully allocate the amount before you transfer it. 2) No. Assuming that they take a distribution equal to the max lump sum, that is by definition the present value of their 415 limit. The 415 limit is a lifetime limit so any distribution they take now permanently reduces the future benefit they can receive from any DB plan sponsored by the same company (or controlled group etc). If they take the max lump sum there would be zero 415 limit left so no additional benefits could accrue under a new plan.

This is correct. You do not need to make any changes to the safe harbor. Just give a 3% PS contribution to the HCEs. Assuming, of course, that the plan's PS formula allows you to do so.

Balances from all employers are considered together when determining if a participant in a MEP can be forced out.