Jakyasar

To add to Bill's comments, with 5500 forms you need to be careful. If you are filing on cash basis, you are fine. However, if you include receivables for the filing and file before the deposit is made and they do not make the deposit timely, you will have to file an amended return and some other issues. Just my 2 cents for filing the 5500 forms without contribution confirmation.

Why PBGC, can't you apply for a determination from further coverage as you have no more participants in the plan? At least it is worth a try, just thinking out loud as I do not know all facts and circumstances. What is the worst that can happen, make you go thru the frivolous process??? Overfunded part is another story.

Out of curiosity, how can IRS make changes to the 5500 form without informing the plan sponsor unless it was a plan #?

Hi Bri Thank you for pointing that out, went back to SECURE 2.0 section 101 and confirmed. Much appreciated

I am not a 401k person and not sure how the following should be handled. Setting up a brand-new plan for a sole-prop for 2023 (will be signed and funded by 4/15/2024). There will be employees hired later this year or next year. So far, only the owner Q1: Do I need to have EACA provisions (I do not want any in there) even if retro to 2023? Q2: For any possible new employee who may be eligible for 2024 and/2025, does the plan have to have EACA option? Q3: For deferral effective date, I think it should be 12/31/2023, latest possible election date, agree? Thanks

Are you describing 120k as the minimum required contribution (MRC) or the pay credit, there is a big difference between the 2. You MRC might be 10k and that is all you have to contribute. This is all I can say without knowing anything else.

Also, the plan document will state if the accruals are restored automatically or need an amendment. With proper amendment, you can get your prior missed years back i.e. do a fresh start+future accrual. You need to determine the mechanics of this but definitely doable.

Assuming the owner is not a sole proprietor as you can retroactively have 401k for 2023, if the plan is set up by 4/15/2024 - no extension. Otherwise, no biggie as David stated, assuming it is an entity other than a sole-proprietorship.

Aren't the deadlines for amending extended?

I am born on 12/30/1950 and am more than 5% owner. Is my RBD 4/1/2023? Is my second RMD due 12/31/2023? Thanks

Effen, I am not 100% sure if this is a CG issue. I am leaning more to Corey's approach as predecessor employer. Need to look into more. In the past I always dealt with 100% owners so never was an issue. I agree, an ERISA attorney may need to be involved. Thank you all for your comments, always appreciated.

Joe and Mary are not related but Mary is terminating a DB plan with an AB as a lawyer (where she is 50% owner) and starting another company and another DB plan where she is 100% owner, again as a lawyer. Possibly taking some clients with her too.

Do not give the auditors any ideas

Unfortunately, it is being terminated by another firm/actuary and was done without me knowing about it. I am going to be taking care of Mary's new plan. Thank you both for your input and confirmation. 415 offset it is.

Hi The answer is most likely yes but I want to double check (brain is fried) Joe and Mary are 50/50 owners of a partnership, both attorneys. They sponsor a DB plan They are splitting and each will have their own new firms in 2024, again law firms and each will own 100% of their new companies. They are also terminating the existing DB plan and will take their distributions. Due to state legislation, they need to keep the old partnership open due to some shared client issues (let's leave it at that) Mary wants to start a new DB under her new company. I think the old DB plan distribution will offset the 415 limits under the new company, agree?

Hi Joe owns Company ABC Mary is an IC and gets 1099 paid to Mary's Company XYZ from Joe's ABC No relationship between Joe and Mary other than being siblings. Mary has a 401k plan under XYZ and defers max - she gets a w-2 from her company XYZ Joe has a 401k plan under ABC Joe makes a contribution under ABC 401k plan for Mary and takes a deduction. Mary has no w-2 from ABC nor an employee. How can this be corrected as Mary has w-2 income from ABC? Thanks

If I am not mistaken, SECURE only allows retroactive election if and only if the plan is a new plan established by 4/15/2024 (no extension allowed). I am not aware of any retroactive election for deferrals for already existing plans i.e. elections had to be made by 12/31/2023. If no election was made (or an older one exists), PS only i.e. stuck with 25% limit. I might be wrong and curious what others will say.

No, they are not required to fully restate. The only requirement is to provide good faith amendments. You need to contact the provider of the document to obtain these amendments. This assumes that the current document is of pre-approved nature. Please keep in mind that these amendments are good faith (not IRS approved) and if you want absolute certainty of full compliance then either convince your client to fully restate or file for a determination on termination (which is a frivolous attempt if the document is already preapproved and might end up being more expensive and time consuming). Whatever you/client decide to do, make all is done by termination date. On a side note, I try to get my clients to fully restate and provide them the reasons why especially if they have millions in the plan. But this is me. FWIW

I agree but the debate is - can you have full year when the biz starts in the middle of the year? I have seen this done this way and ok'ed by many but some practitioners state that it is a no, you cannot start prior to biz start date. We had this conversation sometime ago, just cannot find it (do not have time to research till after 15th)

I recall that too but could not locate yet, still searching

Thank you Bill, hope all is well.

Asking for a friend, do not have more details but a general question. Joe owns 81% of the company. Joe and his wife Mary were both the in the plan. Joe stops taking salary and also no longer in the plan but Mary is. Is Mary still an HCE under attribution rules? I say yes. Any comments appreciated.

Hi Sole prop, started biz 7/30/2023, over age 50. Wants a 401k plan for 2023 (ok under SECURE 2.0) Made 125k of net c for 2023. Assume after SE tax adjustment I think I can make the plan effective 1/1/2023 and get the full 30k as deferral, correct? If I start the plan, do I need to prorate the 30 to 5/12th? For PS I can do max 25k and is this doable with either full or short plan year? Thanks

Hi Never a dull moment with pensions. Sole prop, has DB and 401k/PS plans. 2022 401k/PS (first year) was deposited into the DB account in October (just found out). DB is terminated 11/30/2023 and all was rolled over into an IRA including the 401k/PS portion (the plan is still active). To add more fun, when DB was rolled over, the RMD was calculated on the full amount i.e. RMD was calculated incorrectly (however RMD included the portion attributable to 401k/PS portion. So, how does one correct all this? Such a mess, they did not even tell me all this even though I was very specific when deposits were going to be made. Anyone has experience with this mess? Thanks

Hi Asking for a friend as I do not work with plans that have union employees DC/CB combo. Union employees excluded from CB Union employees only eligible for 401k deferral+SH and excluded from PS (both union and non-union are covered under one plan) Does union employee get a gateway? Can they be tested totally separately? Any insights are appreciated. Thanks