SSRRS

Thank you very much Luke Bailey. This particular case was not a case of increasing pay, thru reducing the contribution. Rather , the company simply did not want to include the shareholders and the wives of the shareholders in the annual contribution (HCEs). Would the following provision in the eligibility section of the document been a better option for them? "For purposes of this Plan, all Employees are Eligible Employees except for the following ineligible classes of Employees: (1) Union Employees; (2) Non-Resident Alien Employees; and (3) the shareholders Jack and Jill, and spouses, children or parents of the shareholders."

Thank you BG5150 and DogHouse.

Thank you BG5150. This is a Volume Submitter approved plan.

Thank Thank you very much Bird, for your insights and knowledge. I just want to clarify that the provision of limiting the compensation to $0 is only for "any participant who is a Key Employee, an Owner-Employee, a Self-Employed Individual, or a Highly Compensated Employee". Meaning the company is making contributions for the NHCEs and just not making contributions for the shareholders, whom have elected to limit their compensation to $0. Also, would it be better if the document would have just stated in the eligibility section the following? "For purposes of this Plan, all Employees are Eligible Employees except for the following ineligible classes of Employees: (1) Union Employees; (2) Non-Resident Alien Employees; and (3) the shareholders Jack and Jill, and their spouses, and any children of the shareholders." Thank you again.

Hi, I would greatly appreciate any insights etc., on the below. A DC (Money Purchase) Plan (volume submitter) has a provision in the compensation definition section (shown below) that allows the owners to sign a form that states that their compensation for the year of the effective date of the plan and all future years is $0. Their contribution based on this is $0, and only the employees receive an annual contribution. Are there any issues with this? Thank you. Compensation Limitation Election Available to Certain Participants. Except for determining Top Heavy allocation requirements under Section 3.5 or Code §415 limitations of Article 6, any participant who is a Key Employee, an Owner-Employee, a Self-Employed Individual, or a Highly Compensated Employee may elect for any Plan Year, on a form prescribed by the Administrator to limit Compensation for all purposes under this Plan.

It has been mentioned on this forum that the EZ Forms that were sent during the pandemic are not being processed. This might explain why the IRS sent this reminder even though the form was marked as the final form. The IRS seems to send this yearly to EZ filers.

Yes, Effen you are correct, this has been dedication at it's best. Thank you very much David. Your knowledge and insight in general are appreciated as well.

To clarify the above, if the 5500-EZ for the years that the IRS claims they did not receive were actually filed, why should the sponsor have to pay fees for the Delinquent filer relief program? The sponsor even has a copy of the October 15, 2020 postmark for the 2019 filing.

Hi, Owner only DB plan received letter that his plan has been selected for examination. The exam seems to be just that the IRS did not get his EZ for 12,13, and 2019 (for location and date it says N/A). The agent says that he should file the missing EZs with the delq. program, however, it must be sent to the agent (as opposed to filing directly DELQ. program). The 2019 was just filed on October 15th, 2020. The other years as well. I recall that there was mention that there isn't anyone at the IRS location to process the 2019 EZs. Thank you.

A Takeover 401k Plan. The plan has 1) deferrals, 2) safe harbor, and 3) PS contributions. The deferrals and safe harbor are of course 100% immediate vesting. The PS contributions are 100% immediate vesting as well, (they are used to offset the DB Plan and only the vested PS balance can be used to offset the DB). Each participant has one total balance at year end and each participant's balance is not allocated between the three money types (deferrals, safe harbor, and PS contributions). Hardship distributions are not allowed in this plan and in service distributions after retirement age are allowed for all three money types. Distributions are made after a terminated participant requests payment for all three money types. Question: Since all three money types have 100% immediate vesting and all share the same specs listed above, is it ok, that each participant's balance is shown as one total balance and is not broken down per money type? Thank you in advance for any insights on this matter.

Thank you, Bird. Yes, the mingling of personal and plan investments is quite common.

Thank you very much. Once an employee who was working 1,000 hours each year, entered the plan, then even if down the line his hours drop under 1,000 he will still be eligible (since he is in the plan already- the under 1,000 hours will not make the employee an otherwise excludable). Is this case different, since the employee terminated (as opposed to an active employee who's hours went down)? Thank you.

Hi, Thank you all , as always, for all the insights. I have seen those that have stated on this forum that an EZ Filer that answers yes to having participant loans is a flag. On the 5500 -schedule I there is a question if the plan held a part of the assets in real estate. If you answer yes to this question, is this a flag as well. And if this is indeed a flag, is it advisable to stay away from investing (DB Plan assets) in real estate to avoid this (even though clearly legal to invest a portion of the assets in Real Estate-with diversification, less than 20% of the assets etc.). Thank you,

Hi, Thank you, as always, for all of your help and insights. May we all be safe. A DB Plan has a 1,000 hour requirement to enter plan and to be eligible to accrue a benefit for the respective year. However, once an employee enters the plan, even if his annual hours of service dips below 1,000 he will still be eligible (although won't earn additional vesting, since only vests an additional 20% per year that had 1,000 hours of service).Question : What If a participant in a DB Plan terminates in middle of the year with 800 hours, will he accrue a benefit for this final year? Thank you.

It appears, that if a plan that is eligible to file an EZ, elected to file an SF, then if nothing is filed the next year, they would be delinquent for not filing. However, if in the second year, the plan switched and filed an EZ, then the plan in the second year became an EZ filer. And an EZ filer does not have to file if the assets (of all plans) are below 250K. It's always good to remember, as has been pointed out on this forum by others in the past, that although an EZ filer does not have to file if the assets are below 250k, however, the statute of limitations does not start if the firm was not filed.

Effen, thank you. You are correct, he will keep the plan open. His main goal is to at least have most of his benefit in an IRA, while buying time to come up with a solution for the excess assets. He will remain in the plan as a participant with a small residual accrued benefit that he will take RMDs from annually. He will elect a Joint & Survivor -non spouse - on his remaining benefit in the plan.

Hi, A owner only DB Plan (owner and wife) is overfunded. He was taking RMD past few years based on Accrued Benefit times 12 (meaning did not elect a particular benefit ie J&S or Years Certain etc.-- this has been discussed on this forum in the past as a method for an RMD for an active participant). He retired now and wants to terminate and rollover into two IRA. The issue of course is that the plan is overfunded. To avoid any reversion and excise tax he will keep the plan open and elect a partial lump sum distribution and roll 80% of his benefit into an IRA. The remaining 20% of his Accrued Benefit will remain in the plan. Is this a feasible option? (by opting for a partial lump sum he is not changing his original election since he never made an election until now, rather he was taking RMDs. In addition, even if this considered a change of benefit election, since he now retired and has a change in status, the change in status should allow for a new benefit election to be made). Thank you for any insights and thoughts on this matter. May we all be safe always.

Thank you AndyH.

Thank you very much, Retired, but still reading and FPGuy. Very helpful and of course very impressive.

ErnieG, than you very much! Your knowledge and clear way of writing, is much appreciated,

Hi, May everyone be well and safe. Based on the incidental death benefit rules, a life insurance policy cannot be held beyond retirement of the employee. If an employee is still active, yet is beyond 62 and is taking in service distributions, must the policy on this employee be distributed/converted to cash value etc. as well? In addition is there a difference if the one taking the in service distributions is an owner as opposed to an employee? Thank you for any insights on this matter.

Thank you very much.

After bringing up the open invoices, the following is what we received in response: I’ve been authorized to arrange for payment of the outstanding invoices and obtain the information we need. Please resend your invoices, and ........will pay 50% of the outstanding amounts immediately. When I’ve been provided the following:1. Your (last two) actuarial valuations2. Calculation of each participants benefits due3. Any RMD calculations (for past two years)......... will remit the balance.

Thank you, Effen. The following sentence that you pointed out helps alot. " The Actuary shall not refuse to consult or cooperate with the prospective new or additional actuary based upon unresolved compensation issues with the Principal unless such refusal is in accordance with a pre-existing agreement with the Principal. "

Thank you very much. I was under the impression that information must be given regardless and fees have to be worked out separately. The above sounds a lot better to swallow.