truphao

it depends (as usual). If the client keeps good records of hours and the owners did not cross the 1,000 hours I think it is possible (assuming this is how the plan is drafted). Had exaclty same situation last year and we froze the benefit accruals for Owners in late August. I did spent a great amount of time educating the client about the keeping the proper records and the due diligence. I was comfortable implementing at the end of the day given the quality of records and the corresponding decrease in W-2s.

110% issue is within the 401(a)(4) regs, so one would think it would not be applicable to H&W situation. But, I think the IRS insisted that the language be included in the pre-approved plan documents, so I believe all "known" PD vendors have that language in their PD. So, it becomes an operational issue. Proceed at your own risk.

it is not just 415, it is a deductibiltiy too. If your Plan Document says "do whatever you want" (aka each participant in their own group) then you can do whatever makes sense. If yoour document is not flexible, you follow the Plan Documnt terms.

David, we are getting a lot of situations where the client/prospect already has an existing 401(k) Plan through ADP, Paychex, and the likes. This is usually a total crap from the perspective of accomodating a CB Plan. So, more often than not a workable solution is to add a CB Plan and a stand-alone PS plan just to get going to accomodate the proper eligibiltiy, entry, TH minimums, etc. The actual benefit level design is limited by imagination and creativity only.

50?! i.e 3 hours and 20 minutes per plan? assuming no data issues, all provisions are standardized, everything is passed on the first try and zero time spent on documentation and notes? double that. Here is another tip - in old good times we would put on a wall a large map with multipe colors highlighting the permissive aggregations. Might still be an efficient and relevant tool inspite of all the AI advancement.

usually plan's formula for oner-only plan is 10% of AAC (415 limit formula). Thus, there is no need to complicate things.

that applies for sole-props as well and many (if not majority) of CPAs think it is OK to deposits VATs by September-ish.

What is the basis for that? I do not see in §1.411(a)-5(b)(3) any reference to distinction by plan type. If it is a "replacement" plan, then sure, but is it? And if it is, what makes a DB plan not to be a "replacement plan"? The old plan exists, and a new plan is being added to accomodate whatever, with a different structure of benefits and vesting.

dependent on the actual plan design you potentially need to calculate various factors for each person at attained age at termination, normal retirement age, age 62. That is using 5.50%. 5.0% and 417(e) rates. Btw, you need to watch out not to exceed 415 limites along the way for 2024 (if applicable) and 2026. Varous proration rules applied to dollar-based limit and compensation-based limit. The precise guidance in the IRC Section 415(b) and the final 415 regulations. GL.

"Buy cheap, buy twice." Only in this case it will be much more than twice in 2026.

not sure if I see a practical issue here. I am of opinion that you got to protect the annuity benefit but it is extremely likely that the additional one year of pay credits will make the protection to go away. So, unless you are doing something really funky duiring the very first year after the change, it is a non-issue. FWIW, I am sure I could be missing something here, so I am interested in hearing other people thoughts.

agree with Effen, QRP is a reversion. The final decision is with the client and their attorney.

let's say, the solo 401(K) allows investment in bitcoin futures. Unless the main 401(k) allows investment in bitcoin futures as well, the BRF test is flanked.

let's not overlook the fact that the actuarial equivalence definition might have changed because payments did not happen in 2023. Dependent on plan provisions, definition of actuarial equivalence, and interplay with 417(e) rates all kind of messy things could have happened.

no, it fails. 1.401(a)(26)-5(a) thows you into 1.410(a)(b)(1) which requires an increase in accrued benefit (assuming exceptions do not apply):