Jakyasar

This is simply a general discussion to make sure I understand the concept properly. The question I am asking and trying to confirm my understanding: the Roth catch up is solely based on lookback salary regardless of ownership, salary is based on w-2 box 3. Looks like sole props and partners with k-1's are exempt from this. So, per my example above and my understanding, the owner who makes 50k in salary does not need Roth catch up i.e. normal catch up. One more thing, as explained by a friend, the plan needs to have Roth provisions in place before the first Roith catch up contribution. Any comments/corrections/missed information?

Hi As not being a DC person and dealing with very few DC plans, I have a really stupid question as I could not find anything on it. Owner only plan, owner (over 50 years old) makes 50k in w-2 and makes full deferral plus catch up. They are required to have Roth catch up, correct? The plan also needs to be amended to provide Roth deferrals/catch up as well by 1/1/2026, correct? Sorry if this was asked before.

agreed and thank you, you got it spot on.

Participant was 0.3% partner in law firm in 2024. Still working. No ownership in 2025 Turns 73 during 2025. Is he required to take an RMD which would be due 4/1/2026?

When in doubt, have PBGC make the determination (you can check on their website). I have had multiple applications for determination and got different determinations. Depends on the kind of the business as well as professional licenses held by the business owner.

thank you both for your input.

Hi The sponsor terminated the DB plan in 2024 - not sure when the distributions happened - 2024 or 2025 - waiting for info, I did not do the termination and this will be a takeover. The sponsor now decides that termination was a mistake and wants another DB plan. As far as I know, there is no 1 year wait on this situation and can start the new plan in 2025 even if the final distributions happened in 2025 (they did unfortunately and account is closed, no luck there to rescind the termination). Am I forgetting anything? Thanks

Don't forget to check affiliated service group possibility.

Thank you and I agree based on what I read about end of the plan year. 80% comment noted.

This is something I have not had any experience with. Trying to read but not too clear on how and when and what can be done. A very recent takeover plan for 2024, EOY val. Cannot determine the benefits calculated by prior firm and waiting them to explain but not likely by 9/30/2025. 2024 AFTAP was certified at 110% back in September 2024 and prior years have always been over 100% By looking at the possible benefits and nice return on investments, I think the actual AFTAP will be certified well over 100% (based on some conservative calculations). Client already deposited 2024 contribution, nice sum. Small plan with 3 participants. Thinking of generating a range AFTAP for 2025 with at least 100% (based on prior history) and have it certified by 9/30/2025 so that the plan can avoid any restrictions. If the above is doable, when does the actual AFTAP for 2025 needs to be certified or am I wrong that the actual AFTAP has to be certified by 9/30/2025? Thanks

Although I agree with either approach, what if the residual is a considerable amount, say $500 or even $1,000+. No indication of what the small amount. What do you consider a small amount to be defensible?

Aren't' you late for 2022 as it was supposed to be filed by 10/15/2023 unless for 8868 was filed for 6 months extension? The deadline from 2024 instructions, Table 1 4971 - 15th day of the 10th month after the last day of the plan year. I am filing for my client by 10/15/2025 for 2024 deficiency on 2024 form.

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My first missed 9/15 deadline for MRC in well over 20 years. I want to make sure I understand what needs to be done per my research. Client did not make the MRC by today, around 30k I checked 5330 and looks like it is section 4971a related. Subject to 10% penalty - not sure when needs to be paid but will instruct as soon as filed. According to instructions, 5330 is due by 10/15 and no extension was required. It still needs to be paid by 12/31/2025 and if not then IRS could impose penalty up to 100% for subsequent years. I have to do interest adjustment based on the date they will make the deposit (if they will) Am I correct on all above?

Thank you for your input. Still researching but not looking good.

Hi A general question as researching it. Have you ever switched from a BOY to an EOY val? I am aware of the other way around with automatic approval. If you have, can you share how managed it, if possible? Thanks

Agree but dealing with different circumstances

Of course they are family members

Me too unless the rollover happened before turning 73 which is already too late.

Hi Owner only DB plan, wants to terminate and distribute during 2025 Already turned 73 during 2025 i.e. first RMD is due 4/1/2026. Needs an RMD during 2025 i.e. split the distribution between rollover and RMD? In a different scenario for the same owner, plan is overfunded but only wants to rollover the full benefit and keep the plan open as will hire others to eat up the overfunding. As this in-service distribution will happen during 2025, is it subject to RMD during 2025 i.e. before the rollover? Thanks

Hi When filing the 5500 forms on behalf of a client with the esigner authorization signed by the client, does the 5500 form need to be a wet signature? I have attended many podiums where it was ok thru DocuSign or something similar. Someone I am dealing with is insisting on being wet which I do not think it is correct? Also, looking at a possible takeover where the actuary signature on SB is electronic. I thought SB's has to be wet signatures. Thanks for your comments.

Yes, they need to sign a joinder to be a part of the plan. If no joinder all eligible employees will still be part of all coverage testing with no benefits, if I understood your question correctly. However, still need to check the plan document and see for CG/ASG purposes, all other companies (other than the sponsor) are automatically included in the plan even without a joinder agreement.

Hi Your second and third paragraphs confirm my understanding. The first paragraph is a different story which is not applicable to this mess but thank you. It is an EOY val. Any comments on? "Let's assume that it was intended that both companies to adopt the plan, say, going back to 2019, inception year (I have a feeling the plan operated similar to 2023 in prior years, afraid to ask/check but must). Can this be corrected without VFCP i.e. is there a self-correction on this or must file with the IRS for correction? Any other comments/suggestions?"

Hi Looking at a possible takeover plan which I think there may be an issue with deduction. I think I know the answer (sorry, a bit fried brain today) but want to see if anyone has a fresh look and comment. My apologies for a rather long explanation. If I am not clear in any of the points, please let me know. Not sure if a CG or ASG or if any at all but for arguments sake let's say either CG or ASG (still waiting on info). Looking at 2023. this is a DB plan. Prior TPA valuation report shows 300k as salary for pension purposes. Deduction was 200k. Company A (a partnership) sponsors the plan. The majority partner's se income in box 14A shows 300k. There is also 500k under box 14C - non-farm income (which cannot be used for pension, if I recall correctly). Assume the other partner is silent and has no box 14A income. If this was the only company sponsoring the plan with ASG/CG, even the though the deduction is within 300k se income limits under box 14A, the salary is definitely not as they would need 14A to be over 500k+ (excluding the 1/2 se tax adjustment), as per prior TPA report. Now, Company B (a sole proprietorship), which is part of CG/ASG as assumed above and owned by the majority partner 100%. Line 31 of the schedule c shows 300k (but not adopted the plan). If I recall correctly, for 415 limit purposes, you add both entities, please correct me on this. However, for pension/deduction purposes, one cannot add both incomes for valuation purposes, only Company A can be used, please correct me on this as well. Let's assume that it was intended that both companies to adopt the plan, say, going back to 2019, inception year (I have a feeling the plan operated similar to 2023 in prior years, afraid to ask/check but must). Can this be corrected without VFCP i.e. is there a self-correction on this or must file with the IRS for correction? Any other comments/suggestions? Thank you for your time.

This is possibly a stupid question but need to check. Company A and Company B are CG. Setting up a plan for Company A (sponsor) where Company B is an adopting employer. Plan excludes leased employees. Owner contacts and says, a Company A leases employees to Company B, the leased employees should not be excluded. I read the section for leased employees under basic plan document and my understanding is that Company A is not a "leasing organization". I do not think it applies here as it is a different definition like a temp agency or something like that. Besides as both entities are CG and no employees are excluded, who cares. Am I missing something here? Thanks