truphao

it is allowed if it is allowed by the Document. It is a benefit/right/feature so proceed accordingly if it is not owners-only plan.

also look for a "deemed cashout" language

let's think about the meaning of the "business' closure". If the business is sold (stock transaction), then yes, it is closed from the original Owner perspective. And the plan btw follows the business. If it is sold as assets sale (or simply stopped the business activity all together), the original business still exists albeit not doing any business activity. In that case I think there is some grace period (1 year? may be even more) before the Owner has to do something. But this really becomes a question for the CPA.

yes, the rule of thumb is that a new plan ought to be "materially different" from the one which is terminating. Obv, IRS has never defined "materially different" so it is up to a practitioner to interpret. I have seen positions taken that a different interest crediting rate (old plan 5%, new plan 3%) is a "materially different". Going from DB design to CB design feels OK.

Starting a general discussion rather than a specific question.... As we know returns during 2022 were bad, 2023 is still iffy but not exactly great either....Which means that PBGC premiums for 2024 using a lookback (1/1/2023 for BOY vals and 12/31/2023 for EOY vals) might be a quite unpleasant surprise especially for plans that started 3-4 years ago and are just hitting the "vested" point. So, I am curious what others think about the "opting out of look back": 1) Is it realistic for PBGC to approve? 2) Does the 60 days advance application to PBGC mean October 31st deadline? 3) I realize that for EOY val date it is not practical (valuation results are not available until 2.5 months AFTER the premium is due) however: I believe PBGC filing can be done on an "estimated" basis with the subsequent "true-up". Yes, it is an additional work but might be worth it? Or not? Is it likely to get approved by the PBGC? Has anyone ever done something like this? Are there any other considerations or concerns? TIA.

Lou, I am going to start a new topic on this notion.....

Again, just had a similar experience. I ended up drafting aa detailed email outlining the professional responsibility of the prior actuary to transition the work. That did it. Not the best nor the enjoyable experience but it might do the job.

If you get the access to the PBGC MYPAA portal you should be able to see the history of prior filings right there. Which might be a challenge if the prior TPA is the "most non-cooperative". I just had the similar experience - the prior TPA made sure everything is the most difficult for the takeover.

I think "post mark" concept extends to a proof of delivery triggered by snail mail, private delivery service or electronic transaction. I would be comfortable signing SB with 9/15 contribution date given the transaction has been originated on that date. I would be OK even taking it further and signing SB with 9/15 if the bank received the request on 15th but did not wired/ACHed/Zelled/Paypaled/whatever money until 16th.

Thank you both Bri and Peter, that answers my question. I knew the election must be consistent across ALL plans (not just retirement plans btw) but I did not know what it means if it is NOT consistent. Appreciate.

both plans are VS.

it is for 2022 reviewing and trying to file

takeover situation, CB Plan doc refers to "standard" definition for HCEs. 401(k) Plan refers to Top-Paid. Small combo (6-7 total, 2 owners, 1 highly paid non-owner). What does it mean? Which definition prevails? IMHO it boils down to if the highly paid non-owner individual does get the 7.5% Gateway or not?

post-mark date governs. Have a client in a similar situation (the client is doing everything very last possible minute and I am about to resign on that reason). Told him to run to the post office on 9/15, mail it with the certified receipt and save everything for documentation in case of audit. After seeing the mailing date of 9/15 I am comfortable signing SB with 9/15 contribution date.

It is definitely feels like an ASG. Therefore, all the plans sponsored by ASG must be treated as a single plan for compliance purposes; without the employee being covered and not getting the employer-paid benefit you either failing coverage or non-discrimination or both. As a practical recommendation I would approach that as a total redesign opportunity rather than trying to "squeeze" it in into Plan # 1 or Plan #2.

correct, the attachment is required only if there are late quarterlies. Even if there were quarterlies but made timely , no attachment is required. I believe this was changed around PPA (the full schedule used to be always required).

may be the "reasonable amount" should be thought of in %-ages? 0.1%, 0.25%. 0.5%, 1.0%?

interesting, learning something new all the time....I always thought of this situation as requiring to exclude compensation for those who are NOT eligible for PS compensation (vs not receiving it). Following the strict reading of the cited PLR 201229102 what would be the reasonable amount that would allow to include Mary's compensation toward 6% limit? $1,000, or, $100, or $1? I am assuming Mary is eligible for PS but simply not getting it because of tax considerations here......

Jakyasar, I agree with you. I believe you get to use the full $200,000 or $12,000 PS.

I would be OK starting the Plan in 2024 but no so wrt 2023.

I understand it is not the actual distribution. What I was illuding to (since it did not happen on 06/30) make an assumption that the LS will be paid on 7/1/2023. It is your assumption , not theirs. I should have phrased it better first time.

If the distribution occurs on 06/30/2023 the distributions should be already removed from both assets and liabilities. If the money is still there then I am with Lou.

This bothers me as well. Basically, the Owner waits until he "fires" all his employees and only then starts a new plan for himself. Timing of plan amendment/adoption issue? If the sale took place in 2022 that would be different. Just thinking out loud.

true, my bad - feeling the impact of approaching 9/15 i guess....

concur with Effen. Hopefully the amendment and 204(h) notices were handled properly and timely.