C. B. Zeller

There is something called a Qualified Separate Line of Business which would allow you to disaggregate the plans and test them individually, but each QSLOB must have at least 50 employees (plus other requirements) so that is not going to help you here since B has only 20 employees. If each plan satisfies minimum coverage separately, then you are good.

AAA code of conduct (which is incorporated by reference in the ARA code of conduct), Annotation 10-5:

Refinancing involves replacing the original loan with a new loan - usually to get a new interest rate or add additional funds. Re-amortizing an existing loan without adding additional funds and at the loan's original interest rate in order to keep it in compliance does not, in my opinion, constitute refinancing.

You didn't mention ownership percentages - but I'm going to assume that we're dealing with an ASG between the partnership and the two corps. 1. The compensation that is paid to the two dentists for their personal services is the W-2 income from their respective S-corps - so that is their plan comp. 2. If the correct compensation had been used in past years, would the plan have satisfied all applicable requirements, e.g. 401(a)(4)? If so then no correction is needed. Most likely you are fine, since you were probably using a lower number than their true comp for past years, and having higher HCE comp would typically help testing.

It sounds like this is a regular occurrence, and from your description the employer knows it is a problem. It also sounds like the employer has not taken any steps to remedy the underlying problem since they are aware of it and allow it to continue happening. In order to be eligible to use SCP, a plan administrator "must have established practices and procedures (formal or informal) reasonably designed to promote and facilitate overall compliance in form and operation" (Rev Proc 2019-19 4.04). I think they might not meet that requirement.

The IRS takes no position on it - the bond requirement comes from Title I of ERISA which is under the purview of the DOL. A plan which covers only an owner and their spouse is exempt from Title I and thereby bonding requirement. A plan which covers only an owner and their mother does not fall under this exemption and therefore is subject to Title I and everything that comes with it, including the bonding requirement.

That is still the definition of "standard interest rate" in 1.401(a)(4)-12

The recipient's mailbox may be full (or close to full) and the added size of the attachment could cause the message not to be received. PDF files are a common vector for transmission of malware and viruses. If the sender's PC is infected, they could be unwittingly transmitting the infection to the recipient. These both seem like very remote possibilities. The size of a properly created PDF is usually not more than a few dozen KB, and the second threat can be reasonably mitigated with appropriate security measures.

You are correct that the 25% limit applies alone to the DC plan when the DB plan is covered by the PBGC. The DB plan is still subject to its own limit, so they can can only do "as much as they want" to the extent they do not want to do more than permitted under 404(o). Assuming the DC plan is a profit sharing plan, they of course have to have some profit left over after the DB contribution in order to make a contribution to the DC plan. If they do, they can contribute up to 25%.

This comes the safe harbor of 414(n)(5). What it is saying is that, if the leased employee is covered by the leasing org's MPP (which meets the requirements given), then you do not have to treat them as as leased employee of the recipient org (your client), but solely as an employee of the leasing org. In other words you can disregard them for plan purposes. I've never asked a client about it because it seems unlikely (to put it mildly) that a leasing org would sponsor such a plan.

20% withholding is mandatory on eligible rollover distributions. 3405(c) A hardship withdrawal is not an eligible rollover distribution. 402(c)(4)(C)

The regulations are explicit that an HCE's excess contributions are included in the ADP test. See 1.401(k)-2(a)(4)(iii)

The ADP test includes 402(g) excesses for HCEs. So, you will calculate the amount of his refund including the entire 402(g) excess. Any additional excess that remains in his account after the ADP refund is distributed is irrelevant, since 402(g) excess can not be corrected after 4/15.

If they have the right to direct investments, then I think they should be receiving quarterly notices.

What about the quarterly notice informing participants of their right to direct investments? edit: We call it the "PPA Notice" around our office but I feel like that name is pretty outdated at this point. What does everyone else call it? "ERISA 105(a)(1)(A)(i) Notice" doesn't have the same ring to it.

May not be eligible to use average benefits test - if the excluded HCE is excluded by name it would not be a reasonable classification.

If the plan is terminating, then just make sure all the distributions including deemed/offset loans are (or have previously been) reported and taxed properly. Repaying amounts to the plan, adopting retroactive amendments, etc. as described in EPCRS not worth it in that situation.

3-year cliff only. 411(a)(13)(B)

Apologies if I created any confusion. The source I was referencing said that an ASG can exist if there is an ownership interest in the FSO by an A-org or HCEs of an A-org, and upon further review I do not believe that is correct. For a B-org group however, the B-org needs to be 10% owned by the FSO or HCEs of the FSO or its A-orgs. So there might be a B-org group if the CPAs are common law employees of the firm, since then their pay would be counted for HCE determination purposes.

I've updated my previous post (and will be sending an email to the authors of the study guide for the CPC Related Groups module). If they are determined not to be common law employees of the firm, but rather to be common law employees of their own LLCs who are working under the primary direction or control of the firm, then it is possible that a leased employee situation exists. While not exactly on point, Derrin Watson does address the question of whether one could simultaneously be an independent contractor and a leased employee in ch.5 of Who's the Employer. This situation is a little different since the entities in question are single-member LLCs and not sole proprietorships.

We use PensionPro and most of our clients manage to submit their annual data collection and other sensitive through it with no trouble. Gmail has confidential mode which helps with sending sensitive data if you are on G Suite, receiving not so much. I have one client who has added me to their Dropbox and uses that to send me files. Worst case, I will tell clients to password protect their Excel file and send it over regular email. It's not perfect, but better than nothing.

For B-org groups the proposed reg 1.414(m)-2(c)(1)(iii) says that the B-org must be owned at least 10% by members of the "designated group" which includes HCEs, officers, and common owners. I need to double check on the A-org specifics. I am reading contradictory information in two different sources. I'll update this post when I figure it out.

There are a lot of issues to consider in making an ASG determination. Who is the common law employer of the non-equity partners? How the report their income is not necessarily determinative for this purpose. If the CPA firm has primary direction or control over their work, then they may be considered common law employees of the firm even if the firm does not give them a W-2. If they are common law employees of the firm, then there is likely an ASG even though there is no common ownership, because the ASG rules require that the A-org or HCEs of the A-org must have ownership in the FSO (or, if treating the firm as the FSO and using the B-org rules, that the B-org be at least 10% owned by the FSO or HCEs of the FSO) - assuming of course that the individuals in question have compensation high enough to be considered HCEs, which it sounds like a "non-equity partner" probably would. Edit: HCE ownership does not apply for A-orgs

ESOP Guy, thanks for pointing that out. If we're talking about fictions in the qualified plan world, the most pervasive one is easily that your 401(k) account is "yours," since it is of course, legally an asset of the plan under the control of a trustee. Given that the trustee is obligated to use that asset solely to provide benefits to benefits to you or your beneficiary, it is expedient (not to mention good marketing) to refer to it as "yours," but there are definitely situations where the distinction becomes important.

fmsinc - all of the links you posted describe one way of accounting for participant loans. This is a common way to do it, especially on daily valuation platforms where each participant's account is segregated from all others in the plan, and they all choose their own investments. These platforms are very popular and account for the vast majority of 401(k) accounts in existence today which is probably why all of the articles assume that is how the reader's plan is set up. In a pooled plan however a participant loan can be treated like any other plan investment, and the earnings on that investment (in other words, the interest paid on the loan) are just part of the plan's overall earnings for the year, which would be allocated to each participant's account in accordance with the plan's procedures for allocating earnings, which may or may not allow for interest on participant loans to be credited back to the account of the person whose account balance is securing that loan. To the original question though, I wonder if the short period of time between the date of termination and re-hire has anything to do with it? If account only contains deferral contributions, the employer might not want to be in a position of distributing those contributions if the employee is under 59-1/2 and still employed at the time the loan is being offset. Jaclyn, the law allows (but employers are not required to provide) for a suspension of loan payments for up to 1 year during an unpaid leave of absence, with the missed payments during the unpaid leave to be made up upon return to work, or re-amortized over the term of the loan. I'm not sure if your situation fits this, but maybe they would allow you to make up just the payments that you missed while you were not working (with interest), and then resume payments on the original schedule?