SSRRS

Hi, A Corp and their DB Plan was a fiscal year end of 7/31 until 7/31/19. The corp switched to a calendar yr end by running a short year for 8/1/19- 12/31/2019. Then they had a regular calendar yr for 1/1/2020 thru 12/31/2020. The plan also should have ran a short year 8/1/19 thru 12/31/19, however they forgot to file for this 12/31/19 short year. If they would file now for 12/31/19, they would need to file with the DFVCP to avoid large late fees. Question: 1. Can the pension stay with another year of a 7/31 year end. Meaning file a 5500 for 8/1/19 thru 7/31/2020. And then switch to a calendar year by running a short year of 08/1/2020 thru 12/31/2020. 2. For the fiscal year end 7/31/2020 (if they can keep the plan with a fiscal year end for an additional year) the company can contribute up to 275,000. This contribution was made in march 2021. Can this contribution that was made for the plan year 8/1/19 -7/31/2020 be used as a deduction for the 2020 calendar yr on the corporation's return for 2020 (as the company for 2020 was a calendar year)? Thank you very much.

Thank you very much for this clarification. If the company is based in Melvile, New York, however as construction company it is possible that they might have a job in NYC or an employee that lives in NYC. If any of these two are applicable, would the employer be required to now offer a plan? It seems that quite a few companies today have been struggling even before this additional new required expense.

Thank you, Peter Gulia. The query is about Melville, New York.

It seems that the New York secure choice was indeed voluntary , and now they are trying to push for mandatory. In these times, is it fair to force emoloyers to sponsor a plan? (even if it jusy employee deferrals, it still costs the employer). Thank you very much.

Bill,thank you!

Hi, A client recieved a letter that New York requires all employers with five employees to offer a retirement plan. Is this true? It appears from research that this program is voluntary in NY. Thank you

Effen, I really appreciate this. Also, I do hear the two sides on the dilemma, of who will govern the RMDs after the rollover.. Unless they agree to pay for an ERISA counsel, we will go with the husband's older age ((higher RMD annualy) to be safe.

Effen, do you mean that the surviving wife must take her annuity this year to salsify the RMD for this year, and then she can roll the present value of her annuity to an IRA, OR do you mean that since her husband, prior to his passing, was already in RMD status before she can not roll the lump sum to an IRA and must take a taxable distribution? Thank you!

Thank you Mike. Your vast knowledge and clarity that is seen thru your response is much appreciated as usual. Thank you for the point that the comp at some pint will cut back.

Hi, The 415 is 19,166. This is increased if the particpant is age 71 (provided that had enough salary average to cover).correct? If this is indeed increased, it is increased from 65 to 71 and not from 62 to 71. Correct?..Thank you very much.

Thank you.

Thank you so much Lou S.

Thank you so much Effen. If at death of her husband, the wife (new plan sponsor) elected to take a lump sum equivalent of her husband's annuity that he was taking, however, due to the the rough transition period, the lump sum was delayed until now (3 years later) and the wife in the interim took the annuity for the past 3 years, can this allow her (hopefully) to take the lump sum now? Also, the plan has not been terminated as the plan is very overfunded. The widow has been accruing benefits each year Thank you very much.

Lou S., thank you for this point. Would this apply for DB minimum funding as well, or if a DB plan has a minimum required contribution, then it would still be due (the minimum required portion of the contribution) by 8.5 months after the plan year end.- and the rest of the contribution up to the maximum , can be made up until the new due date of the return? Thank you.

Bird, thank you very much.

Thank you very much. What if the plan was under examination, would it still be advisable to amend ?

Thank you Bird.

Thank you ESOP Guy

Thank you duckthing. Is it ok to amend and show the WH going out of the plan in the prior year 5500 even though it was not actually paid until the following year?

Hi, Terminated employee in DC Plan elected a lump sum and 20% was withheld as required. The 20% sat in the plan until the following plan year when it was sent to the IRS. The 80% that the employee received as a lump sum was shown on the 5500SF in the year it was received and the 20% withholding was shown on the following year 5500 SF (since it sat in the plan assets until the following plan year). Are there potential penalties for this and can this be rectified? Thank you very much.

Thank you very much Effen. The wife now owns the company, and the participants are all HCEs. The plan is overfunded and at this point it does not appear that the plan will be terminated in the near future. I just want to clarify, the wife can take a lump sum as beneficiary of her husband , even though the husband had elected and was taking his annual RMD in the form of a J&S with years certain annuity? Thank you.

Hi, Sole proprietor (with employees in plan) elected at age 70.5 to take his RMD based on 100% J&S with 15 years certain annuity. After a few year of taking his annual RMD, he passed away in 2018 and since then his wife (the survivor) has been taking the RMD based on the annuity that her husband elected. She now wants to take a Lump sum, and and after taking the 2021 RMD, will transfer the lump sum to an IRA. Is a lump sum permissible, or must she continue to take the yearly annuity? Thank you.

And Bird as well.

Thank you, Luke Bailey, as always, your knowledge and analytical brilliance is much appreciated.

Bird, thank you very much, for the clarification. As always your knowledge is appreciated.