SSRRS

Thank you very much CuseFan, truphao, and Lou. Yes, as you mentioned Lou, the plan is well overfunded by approximately 1.2 million, and this employee has always been an NHCE (55K salary range throughout his career).

Lou S. thank you. Your knowledge and analytical approach is always appreciated 1. The delay was due to the TPA not completing the final benefit calculations until 2023. If the participant announced he was retiring (at age 69) and requested his benefit amounts back in in November 2022, when is the due date to give the employee his/her options , 30 days?

Hi, A Happy and Healthy New Year to all. Calendar year DB Plan uses December as the look back for the 417e rates for lump sum calculations. A participant requested on Nov 7 2022 his benefit, as he was retiring. Had the benefit been prepared anytime prior to 12 31 22 then the lump sum would have been calculated based on the 417e rates of December 2021. The December 2021 were quite low and thus, the lump sum would have been quite high. Although the sponsor was pushing in late December for the calculations to be completed, however it was not done until now in 2023. Question: The December 2022 rates are much higher and therefore the lump sum, calculated now in 2023, will be much lower. Do we give the participant the lower lump sum, or do we say, that since the participant requested his benefit in November 2022 and the sponsor really was pushing in late December 2022 for the benefits to be completed that the lump sum should be calculated as if it was done in 2022 based on the lower December 2021 417e rates and therefore give a higher lump sum? Thank you for any insights etc on this.

Intresting question. However, what would happen if the sponsor in 22 decided to amend to 100 percent immediate vesting? The RMD would seemingly still based on the 12 31 21 value of 60% as the amendment occurred in 22. The same should apply for a termination that increases vesting to 100% during 22.

Hi, At 250 a day for late 5500, isn't that quite steep...is there a grace period? Yes, there Is the DFVCP, however tax returns allow to file a few days late with barely any penalty (relatively). Thank you for any insights etc.

There is a seven day grace period, in which they automatically wave any penalty.

Question 10a of the EZ pertains to information that would be taken from the SB.

In case anyone not aware--all parts of Florida are extended until 2/15/23.

Thank you very much Lou. As always you sure are on top of your game. The reason for this post actually, is because a company wants to open a DB Plan and a 401k SH (3%) as well. The issue is, is it prudent to use the 3% non elective Safe Harbor to the 401k as the DC offset contribution or safer to stay away, since the DC Offset contribution will be les than 5%? Thank you in advance.

Thank you C.B. By the way this was a quote from a seemingly reputable company's website.

I just want to clarify. 1. It seems that you can use 3% of comp as the DC Contribution to offset the DB Benefits, however, it is not advisable to use less than 5%? 2. What does the minimum contribution mean in the following quote ? "Floor offset arrangements can often be designed so that only the business owner and other favored employees receive any benefit at all from the DB plan. For this to work, non-favored employees must receive a certain minimum contribution level in the DC plan (generally between 5% and 7.5% of pay)." ---Thank you very much for any insights on the above 2 questions.

Lou S. thank you, as always, for your time and vast knowledge.

PS Plan has owner and one employee. During the plan year, the employee was paid out. At year end the only participant is the owner. I recall that since at beg of yr there was an emotes in the plan the 5500 EZ cannot be used. Is there any other opinions? Thank you

Is the deferral limit up to 100 % of comp or 25% of comp to the SAR SEP? Thanks for any insights

Thank you so much Bri and Bird. Why does the IRS page, referenced above, say that the max deferral is 25% (and not 100%) of comp? How much may an employee defer under a SARSEP? An employee may make an elective deferral up to the lesser of the following amounts: 25% of compensation, or $20,500 in 2022 ($19,500 in 2021 and 2020; $19,000 in 2019, subject to annual cost-of-living adjustments).

Is the 100% of comp shown below (pasted from IRS site) a typo and should really be 25%? Or is the non elective ER contribution to a SAR SEP IRA (a grandfathered SEP IRA that allowed ee deferrals) allowed to be up to 100 % of comp? Thank you. May an employer contribute to the SARSEP for its employees? Yes, the employer may make non-elective contributions to the SEP-IRAs of its employees subject to an annual addition limit. The annual addition limit is the lesser of 100% of the employee's compensation (limited to 305,000 in 2022, $290,000 in 2021, $285,000 in 2020 and $280,000 in 2019, subject to annual cost-of-living adjustments) or $61,000 in 2022, $58,000 in 2021, $57,000 in 2020 and $56,000 in 2019, subject to annual cost-of-living adjustments). In determining this limit, all

From the IRS. CP283 NOTICE

The pensionmaven, Thank you. We will send a response. The extension until October 15, 21 had been filed.

Hi, Yesterday, two separate DB Plan ez CALENDAR filers for 2020, that were extended due to IDA to Jan 3rd and then further extended to Feb 15th received late filer penalty notices of $16, 500 and $17,000 respectively. They both filed in mid December 2021, well before the Jan 3rd extended due date. In addition, on top of each form it was written in Bold..."New York- Hurricane IDA - FEMA IDR 4615." Has anyone else heard about this? Thank you.

joef, thank you so much. The 5% DC contribution to offset is to pass TH. If 3% of comp would be used as the DC Contribution, then TH will not necessarily be met? Thank you

Lou, thank you. If you don't think that it's correct, then most likely it's not correct.

Thank you again Lou. Your brilliance as always, is appreciated. I seem to recall, but could be wrong, that if a DB offset plan is a SH offset plan than the plan is tested before applying the offset. Therefore, if the DB benefit formula is a SH formula (ie unit accrual) then the plan automatically passes (irregardless of the benefits accrued for the NHCEs after applying the offset). However, in order for the DB Plan to be considered a SH offset plan, the offset contribution to the DC needs to be a minimum of 5% of comp? Again, I may be wrong on this. Thank you very much in advance

Hi, I recall seeing that an the contribution to the DC Plan that will serve to offset the DB Plan benefits (DB is floor offset plan) should be a minimum of 5% of comp. Therefore, to use 3% of comp as the DC Plan is not advisable. 1. Is this correct? 2. Or is this only so that the DB Offset plan is a safe harbor, so technically 3% can be used, however, the db plan will now be a NON safe harbor offset plan? Thank you very much for any insights from all the Pros out there.

Thank you very much Lou, chc93, and CuseFan.

Hi, A DB Plan was adopted for 2014. The only participants for 2014 were the owner and 1 employee. The other 15 employees worked each year less than 1000 hours and were not eligible. In early 2015 this eligible employee terminated and was 0% vested, since did not have 2 years with at least 1000 hrs ( only 2014). Question: 1. Would this be a partial plan termination? 2. If yes, would this one terminated employee become 100 vested? 3. Why should the owner be "penalized" and be forced to make this employee 100% vested just because there were only 2 participant's in the plan (and 1 terminated)?...... The plan is still in existence in 2022, 7 years later, (with the owner still the only participant) and there are no plans to terminate the plan, and calling this a partial termination is quite harsh. 4. What is the ramification if the terminated employee was removed from the plan (since at termination was 0% vested) instead of being kept in the plan and becoming 100%vested? Thank you very much for any insights.