C. B. Zeller

Why are the plans merging? Was it due to a merger or acquisition involving the plan sponsors? If so rely on 410(b)(6)(C) and test the plans separately until the end of the transition period. Then merge them on the first day of the plan year beginning after the transition period.

The sponsoring employer needs to be able to adopt the plan document on or before 10/1. What needs to be in place before the new company is a considered an entity capable of taking an action like adopting a plan? I don't know; it will probably depend on the laws in your state. Presumably there are some lawyers involved with the spin-off - can you ask them? Alternatively, have the plan adopted by the presently-existing company, with an effective date of 10/1, covering only the the people who will be employees of the company being spun off. Then after the spin off occurs, have the new entity adopt the plan and the old company revoke its adoption, and name the new company as plan sponsor simultaneously.

Profit sharing can be used for in-service withdrawals, including hardships - but that was always the case. They are not required to allow hardships from profit sharing under the new regs. They could, of course, amend the plan to permit it if they so choose.

Well, the document was written by a lawyer at some point - however, point taken, we wouldn't want to imply that we have lawyers on staff. Maybe Document-Consulting-Administrative?

This message brought to you by the American Society for the Employment of Actuaries Though as someone who is currently waiting on results from EA-2L I can't disagree too much with this perspective. To the original question, when someone asks me what our company does (and they want the short version), the top 3 things I would mention would be plan document work (Legal), testing and calculations (Compliance/Consulting), and processing contributions and distributions (Administrative). So if you asked me for a better name than TPA I would suggest something like an LCA (Legal-Compliance-Administrative or Legal-Consulting-Administrative - take your pick) Firm.

I don't see how this could be okay. Plan assets must be used solely to provide benefits to participants and their beneficiaries (or to defray reasonable expenses). You can't use assets to provide insurance for someone who isn't a participant in that plan.

Generally a plan with more than 100 participants on the first day of the year is required to file the long-form 5500. There is an exception for plans with no more than 120 participants; if they were eligible to file 5500-SF in the prior year then they may continue to file 5500-SF. Participants is generally the sum of active participants (current employees who have met the plan's minimum age and service conditions), plus inactive participants (terminated employees with vested balances, retirees currently receiving payments, and beneficiaries of deceased participants). You should read the instructions to the 5500-SF for more information. Specifically the "Who may file 5500-SF" section and the instructions for line 5.

The "Amount Due" on the DOL calc is just the earnings - it does not include the principal! What you actually have is 1052 = 1000 x ((1+x)^15 - 1) I come up with an annual ROR of x=4.91%.

If you are relying on the average benefits test to satisfy coverage, remember that the classification must be reasonable. Classification by job title is reasonable but if the IRS finds that you have a de facto classification by name or other unreasonable method it could be disallowed. CuseFan - I think "TRA" refers to the Tax Reform Act of 1986 and "offset" as in an offset plan, where the benefit is reduced by an amount integrated with social security. I'm going to assume that offset plans were added by TRA '86 - it sounds right to me but I wasn't around back then. I assume you already looked at a cross-tested DC/DB combo design? Usually that would be more efficient if your goal is to maximize the benefit for the owners.

Depends. Does the letter say "Form 14568" at the top and have a VCP user fee tucked inside? https://www.irs.gov/retirement-plans/correcting-required-minimum-distribution-failures You can also try your luck with requesting a waiver on Form 5329. They might grant it, they might not. See the instructions for "Waiver of tax for reasonable cause" here https://www.irs.gov/pub/irs-pdf/i5329.pdf

If your Keys are over age 50, one thing that can help is to put a dollar limit on deferrals of $0 for key employees only. Then they can defer up to the catch-up limit and their deferrals will be reclassified due to exceeding a plan-imposed limit. Catch-up contributions are not counted for top heavy purposes so no TH minimum. $6,500 is a lot less than $26,000, but if they absolutely can not afford the TH minimum then this is better than nothing.

Regarding the election to use credit balances, nobody knows yet.

If none of the key employees defer or receive any other contributions, then there is no TH minimum. As Luke reminds us, the IRS can not rewrite the law. TH relief would have to come from Congress.

The answer is in the reg: 1.402(g)-1(e)(1)(ii) Treatment of excess deferrals as employer contributions. For other purposes of the Code, including sections 401(a)(4), 401(k)(3), 404, 409, 411, 412, and 416, excess deferrals must be treated as employer contributions even if they are distributed in accordance with paragraph (e)(2) or (3) of this section. However, excess deferrals of a nonhighly compensated employee are not taken into account under section 401(k)(3) (the actual deferral percentage test) to the extent the excess deferrals are prohibited under section 401(a)(30). Excess deferrals are also treated as employer contributions for purposes of section 415 unless distributed under paragraph (e)(2) or (3) of this section. TH minimum is triggered by the excess deferrals, even if refunded.

It's no help for 2019. For 2020, it lets the sponsor suspend the SHNEC without the 30 day advance notice. It also lets the sponsor suspend the SH even if they did not provide the "maybe not" cause in their notice, and without regard to whether they are operating at an economic loss.

From the instructions to Schedule C of Form 5500: The instructions do not defined "terminated" for this purpose. There are plenty of situations in which a different enrolled actuary might sign the forms for the plan without anything that one would reasonably consider a "termination" having taken place. I don't have any answers for you, truphao, but I find it hard to imagine an IRS or DOL agent making an issue of this on audit. Ethically I don't believe you have any obligation to the plan sponsor if you are not currently being paid to provide services to them.

I imagine most recordkeepers are not terribly incentivized to make it easy to accommodate this arrangement. However in my experience there is usually a way to get the recordkeeper to at least issue a check to the plan sponsor (without creating a 1099-R) which the sponsor could then use to pay the service provider, if the recordkeeper would not pay the service provider directly. Is there a 404a-5 issue? With an affiliated advisor, the fee schedule will be known in advance and can be disclosed to participants. In this hypothetical, I grant that the spirit of 404a-5 is not violated, since clearly the participant who hired the advisor would be aware of their fee arrangement. But I do not think there is any exception to the disclosure rule just because the participant negotiated the fees themselves. If the participant hiring the independent advisor is an HCE, is there a BRF issue to consider? Particularly if non-HCEs would be unable to find an independent advisor willing to manage their small account balances.

I have never seen such an arrangement. If the participant's investment options are restricted to the plan's core menu, would the services of an outside advisor still be plan-related expenses?

The 2019 AFTAP had to have been certified by 9/30/2019. It would have been based on the funding results for the 12/31/2018 valuation. You do not have to re-certify merely because of a change in the funding method to use the first day of the year as the valuation date, unless the AFTAP measured as of 1/1/2019 would be materially different from the already-certified AFTAP. Rev. Proc. 2017-56 provides automatic approval for a change in the valuation date to the first day of the year. Check section 6 for restrictions on its applicability.

Yes.

Certainly. Consider a plan with a brokerage window or self-directed brokerage accounts. Whenever a participant selects investment alternatives outside the plan's investment menu, they are going to end up using plan assets to pay advisory fees on those investments.

No. From Notice 2020-50: Loan relief is limited to the delay of repayments and extension of amortization period permitted under CARES sec. 2202(b) and Notice 2020-51. However, if the participant terminated employment and received a total distribution, including a loan offset, that would be an actual distribution, which would be eligible to be treated as a coronavirus-related distribution.

I'll repeat ratherbereading's question and ask why? What's your goal? If we know more about what you're trying to accomplish it will help us point you in the right direction. Are you trying to break into the industry? Move into a different role at your company? Impress people at parties with your encyclopedic knowledge of qualified plans? ASPPA's Retirement Plan Fundamentals is a great place to start. Everyone at our company (a TPA) completes this within their first few months. ASC did a 5-part webcast series earlier this year on the fundamentals of qualified retirement plans. I didn't attend personally but I head it was good. Off the top of my head, if I were to come up with a list of things you need to know in order to have a solid grasp of the fundamentals, it would include: eligibility coverage non-discrimination including ADP/ACP top-heavy safe harbor plans distributions, including QJSA and rollovers taxation including sec. 72(t) RMDs annual additions/maximum benefit limits elective deferral limits compensation limit vesting and forfeiture deduction limits participant loans form 5500 prohibited transactions and fiduciary issues

(For those readers not familiar with the bizarre world of 90s professional wrestling, the one in shirt and suspenders was known as "Irwin R. Shyster" or "IRS." His gimmick was that he was a tax collector and would go after other wrestlers who he accused of being tax cheats.)

I think you are making this more confusing than it needs to be. Why are you looking at the reg for DC plans? It has no application to a DB plan. Benefits need to commence as soon as he becomes vested after the 4/1/2018 RBD. From what you said that would be at the latest, by 6/30/2022, or more likely, at some point in the middle of the 7/1/2021-6/30/2022 plan year when he completes 1000 hours of service. The amount that gets paid out is whatever is payable under his elected form of benefit on the benefit commencement date. One other thing to ask, since the plan started after this RBD, is did the business actually exist during 2017? And if so was he a 5% owner during 2017?