Jakyasar

it is EZ even if one of the spouses did not have any ownership

Isn't the age 21 issue gone under SECURE effective 2024?

Any other comments?

Thank you for your s/h which is exactly what I have. You and me both not fans of insurance in pension plans.

Hi Did not have to deal with one these in years. A few situations cannot determine if calculations right/wrong for incidental maximums. Insurance is whole life so would apply 66.66% for 74-307 Plan NRA is 62 Participant was age 35 on 1/1/2021 - effective date of the plan. Total 27 YOP to NRA Participant got insurance effective 1/1/2023 at age 37. Total 25 YOP to NRA Participant average compensation is 20k/month - 415 lump sum at NRA 3M (made up) Benefit formula is 75% of average compensation i.e. projected benefit at NRA is 15k/month - PVAB at NRA based on plan AE assumption 2M (made up) 1. To determine 100X, one should use formula benefit at 15k/month so face amount maximum is 1.5M, correct? 2. To determine ILP theoretical contribution under 74-304, law requires participation years. The LRM language (where document reflects the same) is "using the individual level premium funding method from the age at which participation commenced to NRA". 3. Based on literal reading of the law, for 74-307, I need to calculate starting from age 35 i.e. 27 YOP, correct? 4. For 74-307, the lump sum I have to use is the 2M figure (not the 415 figure), correct? Thank you

Hi I have not had one of these in years and just tried to research. I am not sure if the software is doing proration correctly (may it does - I am not sure) CB plan and the company (sole-prop), both start 5/1/2024 with 12/31/2024 year end. Owner is 60 years old. Has 450k of net c income for 2024 (after 1/2 SE adjustment) What do you pro-rate? 401a17 limit 345,000*8/12=230,000/12= 19,166.67/month 415(b) limit 275,000*8/12=183,333/12= 15,277.78/month - maximum 2024 accrual is 1/10= 1,527.78 so any cash balance pay credit equivalent cannot exceed this?? What am I missing? Thanks

It is a dissolution of biz partnership, nothing to do with marriage (they are not married) They are going their own separate ways - 2 separate entities.

No takers?

Hi I hope I am going to be able to explain this properly. Looking at a takeover combo plan which was done in software A and I am checking it on software B CB plan uses full year salary where DC plan uses salary from DOP. I have not had one of these in sometime so am conflicted with the different results. Only DC provides top heavy. The way the prior TPA did the calculations with software A, they calculated the DC EBARs gateway using salaries from DOP and they added those results to CB EBARs. Overall testing was done using full year salary. The way my software B does the EBARs, looks at both plans, picks the higher salary and applies gateway to the higher salary. Are both methods acceptable? Thanks

Any takers???

Hi Did not have to deal with one of these in many years so a bit rusty on the process. Everything is on a calendar basis. Joe and Mary are 50/50 partners of a law firm - no other employees. They both get K-1s. Let's call this LawLLP. All they have is a SEP. July 1, 2024 they will go their own separate ways. Joe sets up a PLLC (filing as a sole-prop). He will bring in some of the clients from LawLLP. Is this an ASG issue? Joe wants to set up a DB plan for 2024. Can he: Use prior service and income (limited to 5 past years) to start the DB effective 7/1/2024 (ending 12/31/2024 for a short plan year) so that he can have an AB as of 7/1/2024 for pre-funding? Assuming that he can, plan year must start on 7/1/2024 to avoid Mary to be involved in the DB, correct? What needs to be pro-rated, if anything? His net c will be 200k and he wants to put away as much as possible. Of course it will depend on what can be used from prior firm. What else am I not asking or thinking about? Thank you all.

Hi As I never came across one (nor dealt with 412e3 plans for over 10 years), how does one calculate RMD’s? Thanks

Hi Calendar 401k/SH/PS plan with 21/1 and dual entry as eligibility EE DOH 1/1/2023. Apparently deferred during 2023 (no idea when started deferring). Just got an amendment signed in 2024 stating as the employee deferred during 2023, for this particular employee eligibility is waived effective 1/1/2023. Does this sound right? Thank you

Unless there was a gateway requirement, I think 2022 allocation is not going to happen for this terminated participant. Also, if you are doubling the contribution for 2022 and 2023, watch out for the deduction limits.

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.