truphao

Participation can be tested on accrued-to-date method. That might do the trick for the last year of the Plan.

I believe you have to follow the plan terms. If document says, allocate, then allocate. If document says "revert to employer" I believe you can give it all to the owner assuming the general test for the year is passed.

contributions reporting on SB demonstrates compliance with the minimum funding standards. Thus, it ought to be reported on 2023 5500, SB, etc. I agree with smartness of Lou and Draper

Been there on several occasions. Normally I would send the docs an “easy read” on ASG from ASSPA and a hard one from IRS and point out a few most relevant slides with a closing recommendation to engage an ERISA council. It is what it is.

I do not believe bank has an authority to force the change from EIN to SSN. They can definitely terminate servicing the account altogether though. Talking to the bank is likely to yield nothing, just move the money as others said. Schwab for example would set it up in couple of days and you client can invest in bank products (cds and such) using the brokerage platform. Arguing with a bank might be worth only to waive any kind of termination/transfer fee.

yo creo que si, it requires modifications on the partnership agreement level.

either way should be really fine.

operational failure in accordance with plan doc terms, potential failure of ADP/ACP, potential failure of TH test, and I hope a need to find another TPA

he will not

Thank you all. Just to confirm staying at 95% / 5% ownership would trigger a TH allocation to the 5% partner, correct?

Let's focus on the ownership tests only - It is my understanding that for a person to be considered an HCE the ownership level is at 5%, and for a person to be considered a key employee the threshold is at "more than 5%". So, if for a two-person partnership, setting up the ownership level at 5.01% and 94.99% avoids both the non-discrim and top-heavy tests. Am I correct?

not only recordkeeping fees but assets valuation fees as well, the value has to be reported on Form 5500, right? In addition, the same type of investment has to be offered to other participants to avoid potential BRF issues. Let me throw another wrinkle while we are at it - how are you planning on rolling over the horse into the IRA in case the plan MUST be terminated? I would not touch it either; it has "ain't worth the trouble" 40 feet high neon sign on it.

while most of the plans (especially small ones) are using PY as stability period, the choice of the lookback is really a consulting issue. For example month of September has a tendency to be the "lowest rates" month, if you want to be able to time/plan "things" better, August gives the most flexibility, if you have to process distirbutions in January the month of December is not a good choice, etc.

sorry guys, answering my own silly question. Mathematically it actually does not matter since the answer is the same. (0 + x +y) / 3 * 3/10 is the same as (x + y) / 2 x 2/10; I am assuming everyone agrees that service and comp treatment should be consistent.

the OP says "contributing". If the ER portion of DC has not been contributed yet, then there is a lot of flexibity. If it has been contributed in 2024 then there is flexibility too. Even if the dedcution for 2023 become limuted to 31% It is definitely worth it to do a retro plan from 415 perspective. It is time to get an actuary engaged.

1) no, he can continue with Schedule C 2) yes, he can, he will pay SE tax on all income BEFORE the pension deductions 3) No, it is not too late to set it up retro for 2023 assuming his tax return extension has been filed timely.

counting sevice should be consistent with the average comp calculations. For the 100K answer - yes, for 150K answer no.

sole-prop, activity commenced late in 2021, 2021 Schedule C is negative, 2022 sch C is 150K, 2023 Sch C is 150K. What is my 3 year average comp for 415 limit purposes? Is it 150K or is it 100K? Is there any specifc guidance on that type of situation?

I have no problems having 2 separate plans in the situation you described. The caveat here is that the both plan docs ought to be drafted with care specifying exclusions, eligibility, etc. The only advantage is to simplify F-5500 process and this is iffy by itself (one is for surely to be forgotten if not both). Form 5500-SF is really not a big deal, and there is only one doc required with one plan covering both brothers.

You are not starting a new Plan, you are simply restating the existing Plan to a new Document provider (E-Trade). Please make sure you implement this properly, the penalties for messing this up are very severe.

set up a DB/CB Plan if the Owner is older than his Ee.

I think the restrictions serve the purpose to prohibit circumvating the in-service distributions at early ages.

the lowest safe harbor NRA is still 62.

Thank you again, and I am in agreement again. Was double-checking my understanding.

here is a follow up question. If it were an ERISA plan but only the Owners' benefits are being reduced (no NHCEs are impacted), would the 204(h) Notice be required issued to the Owners only?