Jakyasar

Thank you for your input, yes I would be testing OEX separately. Everyone in the main test is getting whatever they need to. Forgot about the no t/h requirement for OEX but I was mostly concerned about the ADP test.

Not a 401k expert and the client asked the following: Calendar 401k plan with 3% NESH and PS provisions, it is combined with a cash balance plan. Plans are top heavy and top heavy is provided under the 401k plan. Eligibility is age 21/1 year and dual entry Hiring a new employee on 10/1/2026 and sponsor wants to amend the 401k plan so that the employee can start deferring immediately. Not amending the CB plan, just the 401k provision. Does this employee also need to get SH i.e. ADP testing would be an issue if not? Possible top heavy issue too, at least in my opinion. Not providing PS allocation. Thank you

I have a situation and I use the cheat sheet Austin3515 provided long time ago. Paragraph 4 of the attached states: “The rule of parity can be only applied with respect to the service of a Participant. If an individual never met the eligibility or plan entry date requirements; if they terminated before the Plan was effective; or if they were excluded from participation in the Plan, their service cannot be disregarded under the rule of parity. A calendar plan with standard eligibility age 21/1 year service (1000 hour requirement) and dual entry date. A rehired employee was never a participant prior to rehire so that means (according to above), their service cannot be disregarded. Employee in question was rehired 5/1/2024 and worked 1000+ hours thru 5/1/2025 but did not work 1000+ hours during calendar 2024. He was an employee some years ago (2 scenarios, 1- did not have 5 breaks in service and 2 did have 5 breaks in service) It the statement above correct from the cheat sheet is correct then, since he never worked 1000+ hours at any given 12-month period in the past, the fact that he worked 1000+ hours from 5/1/2024 to 5/1/2025 is no longer relevant and he should not be eligible on 7/1/2025 since he also did not work 1000+ hours during calendar 2024. The 1000+ hours from 5/1/2024 to 5/1/2025 method would have applied if and only if his was never employed prior to 5/14/2024. He worked 1000+ hours in calendar 2025 and therefore eligible 1/1/2026. What am I not reading/understanding here or am I making a correct statement or am I making sense? Thank you

John, are you saying if they made 140k CAD of salary in Canada (not a US based income) and the equivalent of it which is roughly 100k USD, the US company can make a contribution on their behalf for a pension plan maintained in US under IRS/DoL regulations? If that is what you are saying, where would they deposit the monies (apart from what currency)? Would the US company even be able to take a deduction for it? I must be missing or not understanding something here.

I understand the non citizenship/non resident exclusion but again, not sure about the lack of US based income. May be an exemption for Canada?? A foreign employee working with an H-1/H-2 visa and have US income is included for testing purposes. May be excluded from the plan categorically. Also a foreign employee working outside US but the income is from US is also included for testing purposes. The above is based on a multi national client that I worked with and had a good ERISA attorney involved with all this but this was 10+ years ago so commenting from memory. Things may have changed or I may be remembering wrong but one thing always stuck with me was US based income.

Isn't there a requirement that they need to have US based income?

No census thus no compliance testing no matter what. Late 5500 due to lack of information is the client's issue, not yours. How can one complete the 5500 forms without knowing how many participants you have, active, terminated, with account balances, terminated with less than 100% vested balance? RKs o not always have the correct data, depending on who is inputting the data. As a TPA you would be taking a huge risk and responsibility by preparing incorrect information with nothing and also putting in incorrect data knowingly. As RBG said, do not make it your problem if the client is not incompliance with providing the data. They can always file late with DVFC. If the client insists on not providing census, resign. My 2 cents FWIW

Will the taxation be for 2025 or 2026? I agree with being a distributable event.

Owner only plan. Loan was not paid off in 5 years (5 years ended 12/31/2025) and 3 left. Is there any self correction? Otherwise, what needs to be done? Never dealt with this before. Thanks

Client fell victim because the broker said it was ok to do so without consulting me. Now the broker states that the client is preparing the 1099s for paying capital gains taxes on all stocks transferred. I will refrain from commenting further.

Just was informed that the client made 300k of db contributions in all kinds of different stocks held by the corporation rather than cash. This is the first time I am dealing with this and any guidance on how to correct it is appreciated.

Any takers?

Any takers?

Have not dealt with this 10+ years so memory not good. Hopefully some DB gurus out there are still using/remembering. May be looking into taking over plan a db plan which has a good amount of prefunding balance. The sponsor wants to use portion of it for MRC for 2025. I do not see an election signed by 12/31/2025 - are they late of they have till 9/15/2026 to make the election? Does FTAP need to be over 80% or 100%? Does prior year funding % need to be over 80% or 100%? I recall being 80%+ Thank you for the reminder before I decide what to do.

This is an AFN related question as I am not sure the info is correct for calendar 2025. My valuation program provider generated an AFN with 2025 PBGC maximum benefit however payable in 2026 and they think this is the right way to reflect on the AFN with the new changes. In the past, before they changed their programming for 2025, it would have given me 2026 PBGC limit and payable 2026. I have it checked it with another valuation program provider and it provided 2026 PBGC limit and payable in 2026. Anyone checked this?