truphao

I am doing some modelling trying to forecast the segment rates for 2024 EOY valuation. I am getting 4.75/4.96/5.59 for 430 and 5.03/5.27/5.23 for 404. Leaving the technicalities apart, thus my conclusion is that for 2024 the min and max are the same and are driven by 430 rates. This is totally insane, what am I missing?

it is all good for 2024, it is probably too late to do VAT for 2023 given that only contributions made up to January 30th can be considered toward 2023 415 limit.

Thank you all - this gave me enough to formulate my thoughts. Tremendously appreciative, as always.

that is essentially what my question is? They are not partnership, they are not ASG, but are they a CG?

no, each business is owner-only, both H&Q are in professional services but different fields.

Husband owns his S corp, Wife owns her S corp. Business are not related (different fields). Can one DB plan cover both H&W? State NC. Just trying to keep the admin cost on a low side.

I think they are benefiting. I would not be uncomfortable deploying a de minimus threshold though ($ or %).

in addition to SPD it owuld be extremely beneficial to obtain a copy of the actual Plan Document in effect as of the termination date. It is not that uncommon (especially if we are going back) that the SPD and the Plan Doc language are not lined up perfectly.

yup, ouch it is. We are doing in-service distributions right now to avoif further deteriation of value on account of aging.

FYI, Datair is using 4.87% for the moment.

FWIW, at the 2023 CCA Enrolled Actuary Conference the question was asked during the Q&A session with IRS. They responded pretty firmly that one participant plan must file EZ.

yes, ACP applies. Not likely to work unless all Ees are HCEs.

5 year clock can be bypassed by opening a Roth IRA in advance with a nomianl $100, no?

Lou, do you prefer In-Plan conversion or "Out-of-Plan" to an IRA? What are the resonings for your preference?

if you follow the simpliest way to convert (bypssing all bells and whistles) it should pretty straightforward. In the worst case you would just feed into the system the Opening Balance (even if it has be calculated outside in the spreadsheet) and move forward. I think Datair Plan Documnt system also allows for conversion.

change the document and be done? subject to effective and actual availability tests of course.

I am with Effen. Adding a few points: 1)In-Service can be made available at 59.5 (rather than only at NRA) which requires the proper language in the document. 2)I also think of in-service as a distribution of a full accrued benefit rather than some random amount. Thus if a participant recived a full distribution at January 1, 2023 of his benefit accrued as of December 31, 2022, then there is nothing to be distributed until January 1, 2024 since he receives an additional accual only on December 31, 2023. Is it too simplistic? 3) Those distributions require some actuarial gymnastics if the design is at 415 level, got to be careful with proper capturing the offset for val purposes

no way out, NHCE gets 3% and HCE would get whatever % the testing would support. To avoid the TH, you could had excluded HNCE from the Plan alltogether but then you would have a coverage issue. Bottom line, the HNCE must get 3% if the PLan is TH. But is it?

with Bri's #3 - put a clause in your engagement agreement that the client idemnifies you for any <2023 issues.

ErnieG, there is something that always escaped me; so I am hoping you (or others) can explain this conceptually. If the life insurance policy is owned by the Plan, then it is a Plan's assets. In case the Owner passes, the Plan receives the policy payment. It is still within the Plan. Then, how does it become "partially-tax free"? I am not trolling, I just do not have enough knowledge/experience with life insurance products.

yes, thank you.

That makes it somewhat easier. You can suggest to proceed with the plan termination with a proper communication advising the sponsor of the potential disqualification risk upon audit. Make sure you create a well organised paper trail having your advices well documented. The burden is on the plan sponsor. Billing hourly (vs a previously agreed fixed) might be a good idea as well. And here is a reminder (I have almost tripped over that several times myself so I am paranoid now) - although no F-5500-EZ is not required, the SB still has to be prepared. Do not forget to review if the combined assets are over 250K if there is a 401(k) plan.

Thank you, now I understand. Putting a high-comission long cost-amortization period financial tax-deferred product inside a tax-deferred plan which is likely to get terminated in 5-6 years to create a maze of non-dsicrimination, valuation and compliance issues. Nevermind that it is practically impossible to obtain a "market value" of the policy and that a life insurance cannot be rolled over into IRA upon termination. Did I get it right?

my question is what is the point of putting a tax-deferred vehicle inside the tax-deferred vehicle? Especially given that on average CB life-span is 6-7 years?

Zeller, you are correct, sorry, I am totally wrapped up in the complexities. I am doing 2-year wait but did not spell it out in the OP.