truphao

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.

S corporation, owned by Father and Son, each owns 50%. No employees. Which 5500 should be filed? EZ or SF? I am getting lost in the EZ instructions language: "2. Covers only one or more partners (or partners and their spouses) in a business partnership (treating 2% shareholder of an S corporation, as defined in IRC §1372(b), as a partner);"

yes, it is OK. Just did a post-PPA plan document. Datair supports that design.

thank you Lou, it is my understanding as well but I did not spend enough time digging in.

Lou, has anything in Secure 2.0 changed that "nuisance" with 5305 by any chance? (running too thin to dig in myself:)

all 3 are statutory excludables. The only I see is with 1,000 and last day requirement for PS component. If you have any ees who have failed either of those criteria and need to get the gateway (hopefully you do not have any), what would you do?

and how do people address the market value for valuation purposes every year? This is a concern to me especially if the annual contribution is dancing close to min or max.

What does it mean "overfunded"? Is the plan overfunded in terms of Assets > PVAB based on 8 years of participation since 2015? Or is it overfunded even when you look at 10 years of participation in 2024? In the latter case you definitely want to start paying accrued benefit (as in service distribution) to avoid the problem from growing bigger. Most likely it is a number play. I would also review 2023 return through 06.30 (I am seeing 12-13% for some of my clients) and would try to guesstimate what the new 415 limit will be for 2024. Another hidden surprise there - what if interest rates shoot over 5.50%? We are not far off right now, what if rates keep on increasing - your LS will take a dive on account of that. All in all it is a huge waste of valuable time IMHO. This is unless you get paid by an hour and then it becomes a very interesting and rewarding multi-year actuarial math exercise.

I think (?) 401(h) arrangement with the DB Plan cannot rely on the prototype plan and has to use the individually designed plan. Which makes it cost-prohibitive proposition.

following up on Tom's comment - thus, this is really a CPA's job to do the "reasonable" allocation. The TPA/actuary should figure out the deductible amount for the whole plan and stop there...despite of temptation to keep going...

I agree with Effen in general. However, there might be situations when it is advantageous to pay PBGC from the Trust (overfunding, plan termination, merger, etc.). Too many variables that we do not know about.

yes, PBGC premiums are payable from the Trust, and it is a prevailing practice for many "larger" corporate DB plans