Jakyasar

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?

My 2 cents, 2 years is equal to 3 years. Since amendment to increase for an HCE was for 2024, for 2024, 2025 and 2026 you need to adjust the cushion. The way I do is run 2 vals concurrently, one before amendment (I call it B4) and one after. The cushion is based on B4 val and that is the limiting number on the new val for deduction, regardless of whatever the FT is on the new val. FT is not limited, only the cushion is limited which must be based on the prior benefit structure. Remember, this is for deduction purposes only. FWIW and I hope I am not wrong as this was discussed with many different actuaries and collectively agreed upon.

I think it may matter as the correction needs to be made asap especially with the 415 violation but again I do not know, was thinking out loud. Waiting until the year after with an event that may disqualify the plan is a very risky proposition. in my opinion. Get it fixed asap would be my approach/recommendation. Still no clear indication on what to do. I am of course suggesting an ERISA attorney at this time, given the 2m+ assets but also curious myself to see if anyone had to deal with this before and had a good and quick solution to this issue.

Over 415. I am trying to find out if could be SCP. Not sure when the rollover was done but I am thinking, if within 60 days, roll back to the plan account and do the proper termination. I think this is kosher. But if over 60 days, not sure what can be done and how.

Hi Helping a friend with a problem on a DB plan for a client of theirs. One lifer DBP, slightly overfunded. Decides to rollover all the assets into an IRA with no paperwork for termination and distribution election form. Not married. Slightly overfunded as well. How can this be corrected, assuming the plan sponsor wants out help? It is over 2.5M in assets, may be 50k or so overfunded which should have been rolled over into the existing DC plan under QRP rules. I have not dealt with this in many years (sometimes luck can be on our side, rarely in this biz).

Just attended the ASEA PBGC webinar and the answer to my question, unless you payout before even thinking about terminating the plan, no payout can be made and all those $500 benefits must go thru the PBGC termination process.

NOIT already done

Thank you for the list, always good to know more

Hi I have not had an experience with low balances for many years and just want to confirm my findings. Checking a PBGC termination for a CB plan - official termination date is late August 2026.. There are a few participants missing but their balances are less than 7k. Some are as low as $500 Plan just got amended to increase the force-out to 7k. If the participants cannot be located, PBGC will take over their balances as lump sum since no annuities, correct? Instead of PBGC taking over, can the balances be transferred to an IRA thru a company like Penchecks? If yes, is this subject to PBGC approval? Thank you

Even if the balance is less than force-out limit? Just curious.

How was this resolved as providing partial interest is not within the plan provisions? The agent asked you to violate the terms of the plan.

As Cusefan indicated, it is available in IRS pre-approved document, at least the one I use i.e. no pro-rata interim adjustment is required is one of the options. I researched this, checked this and confirmed with the document vendor that no interest credit is provided until 12/31 i.e. if the ASD is 12/30, no interest crediting. FYI this was based on fixed interest rate only, nothing else. 100% in agreement with Corey on the 411d6 issue as well since this was also discussed with the vendor. FWIW

I think the answer is no but still would like to run this by the gurus. Owner only plan over age 50. For 2024, LLC filing as a sole-prop. For 2025, LLC elected to file as an S-corp, no w-2s were taken. Also had schedule c income over 500k. For 2026, only s-corp. I do not think 2026 catch up needs to be Roth, agree?

Thanks, that was my understanding as well, passing the midpoint test i/o ratio test for each rate group (this is for 401a4 only as no issue with 410b). it is the using individual's names for each group I had a brain freeze with.

Any takers?

Having a brain freeze for a change. Checking a CB plan. No exclusions, all are included. The 2 owners (50/50), are defined by name in their own groups i.e. group 1 - Joe Smith and group 2 - Moe Smith. All others who are rank&file are in group 3. Does each rate group need to pass ratio test or mid-point test is fine here? How about if each group for the owners is written as: Group 1: Shareholder of company - Joe smith Group 2: Shareholder of company - Moe Smith Thanks

Plan does not file 5500-EZ for 2026 as BOY was 5500-SF, if I recall correctly, I may be wrong though.

Owner+employee for many years, employee terminated and got paid during 2026 and only owner at end of 2026. Once employee got paid, applied to PBGC for exemption from further coverage and got exemption effective May 1, 2026 so the rest of the 2026 no more PBGC coverage. Question is for 2026 deduction limits. Hope explained better this time.

DB plan was covered by PBGC BOY but got an exemption during the plan i.e. not covered at EOY. What is the DC deduction limit 6% or 25%? Drawing a blank.

I am not sure removing a possible benefit (assuming that I am making sense here) is something I want to tinker with even if the interim amendment deadline is EOY in 2026. Not clear how it would affect 411d6. I am playing this a bit on the cautious side, may be too paranoid.