SSRRS

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.

HI, We do not do much work on cash balance plans. An actuary brought up the following: A TPA that he works with set up a Cash Balance Plan. They are getting a maximum that is lower than the cash balance allocation per the formula. Does this sound right? Thank you.

Hi, An owner only DB Plan (100% owner -no partners etc.) opened account with Bank. Bank did not want to open pension account so he opened the account with the corporate name only and left out "Defined Benefit Pension Plan" on the account name. It is a checking account with no interest -so there are no issues of bank issuing a 1099 for interest income. Is this a big issue that the account is missing db plan on the label? Thank you.

thank you for any help with this. Thank you!

Thank you. Your clear, and concise way of thinking is always appreciated,

CuseFan Thank you so much! Yes, correct, we did not apply a second forfeiture (double dip). Rather, as you are saying, we are just under reporting the vested balance of these two other participants. As their account balance is correct, however, their vested balance should show the same amount as their account balance (100% vested). They did not receive their money , so they were not underpaid......just wondering can--if the IRS would pick up on this--can the IRS say that since their vested balance is to low in a sense we are potentially could have taken money from them that they are entitled to. Then again, we can always show that for the following year on the report we fixed their vested balance to 100% percent.

I guess if they come back and ask us to show the calculation of the forfeiture, we then will show the 2 additional that forfeited and only then will mention that we noticed that these 2 others should also be 100 vested, but otherwise don't mention it, as to not point it out?

CuseFan and Nate thank you as always. We noticed that that there are 2 other participants who forfeited their unvested balances and their remains balances are now 100% vested. However, inadvertently, we did not change these other 2 participants vesting to 100%. When we respond to the IRS explaining that the 3 questioned are 100% due to the forfeitures, should we also point out that we noticed 2 other participants that should be 100 vested. Or is it better not to point it out, and just fix it on our end, and hopefully they won't pick up on it. Can you self correct during an audit, as if not, then maybe better not to point it out? Thank you.

Thank you Nate. I wasn't sure what the attorney was referring to, but with a bully personality as this client/attorney is anything scares.

Thank you CuseFan. I agree with you, unless since the Audit is for 2019 so the agent only sees the balance being 100% vested as of 2019 and doesn't see the allocation of the forfeiture that happened a few years prior? --(as can't figure out otherwise why they would ask this)