Jakyasar

Ok, here is a new one I have never seen from the IRS For year end: 12/31/2020 Letter dated 2/13/2023 Re: 5500/8955 filing. Letter states that the 5500 must be filed by 10/15/2021 (you are not reading wrong) The 5500-EZ was filed on 10/7/2021 with an ACK What am I missing here? Thanks

Hi Peter, so true, so true. Thank you for your comments.

Hi Here is another new one for me. Back in 2020, CPA asked me to run a proposal for a DB plan. Did projections for 2020 and 2021, big numbers, provided consulting and also all the mandatory deadlines. Never heard again from the CPA and the prospective client. Last week I got a note from the CPA saying the client did not make any money in 2022, is $0 contribution ok? I went "huh???" Apparently, plan sponsor (one lifer) made deposits into an account (do not even know what kind as there is no plan document) for 2020 and 2021. So No document No valuation No signed SB No 5500 for 2020 and 2021 (EZ - easy fix) Other than getting an ERISA attorney involved, has anyone dealt with a situation like this and if yes, what steps were taken? Yucks

Out of curiosity (not using ASC myself), you are not talking about a straight .5% of salary but rather a pay credit that is actuarially converted to an equivalence of .5%, correct?

I saw the ADP part but not the ABPT part. As this is deferral related, not sure if the excess should be part of 401a4. Could not find anything yet. Hoping someone had to deal with this before (sadly)

Hi Here is a new one for me. 401k plan with 3% NESH and PS provisions so no ADP testing required. This is combined with CB plan and tested together. (I only handle CB plus testing) Just got the info for 2022. HCE/owner and spouse, both exceeded 402(g) limits (changed payroll companies in mid-year and they did not pay attention to the deferrals). Refunding prior to 4/15/2023. If ADP tested, the full amount would have been included, only for HCE's. Do not have any issues with the NHCE's. How for ABPT? Based on 2022 limits (20,500) or full incorrect deferral (30,000)? Assume under age 50. Thank you.

More than 5 years, no first 5 years exception here, too bad.

Right answer on how to be handled. Thank you.

Thank you for sharing your experience but no in-service distribution is allowed from an active DB plan for a 42 year old under DB plan regulation. The client simply screwed it and himself up.

Do not know if 1099 was done. Attorney it is.

Effen I am not against having an attorney, in fact it is a must have. I am definitely not making it my problem here especially for a client who did not even bother to let me know. One question on your comment (for my curiosity) "Terminating the plan and getting proper consents now isn't a horrible idea", are referring to a termination date in December of 2022 or current date as it is one year of valuation vs 2 years. I hate these issues.

There is no AFTAP yet and even if done now, it will only be effective for 2023, not for 2022, at least this is my understanding on how the rules work. I do not believe automatic restoration is applicable to 2022, again based on my understanding.

Hi Here is another new one for me (the day is not going well with the firsts). This might be a ridiculous question but never dealt with before. Looking at a DB plan - one lifer. AFTAP was never done so AB frozen a few years back. The plan never officially frozen - just AFTAP freeze. Did a quick run and 401a26 fails, both annual and accrued-to-date. The software program is not providing an option for accrued to date at all. I am thinking an 11-g amendment to provide meaningful benefit. I would not ask this question if the plan was hard-frozen but here the freeze is due to lack of AFTAP. Can one do an 11-g amendment and increase the AB and overwrite the AFTAP freeze? Any other thoughts/comments? I hope my question makes sense. Thanks

No in-service - 42 years old. Besides, can you amend retro to 2022 and add in-service even if even old enough? I do not think so (might be missing something here). Intent was (as was just disclosed today) to terminate early in December and roll out the assets. I am sure this has happened many times (just not to me) and there may be a way to get it fixed without involving VCP/attorney (I do not see how but no experience on this matter), just exploring others' experiences.

Hi This is a first for me. Need to see what others did in this situation and if any permissible correction is available. Frozen DB plan, one lifer. Do not know if married but to complicate, let's assume married. Plan was underfunded under 417e so no excess issues and no 415 issues. In December decides to roll over the assets into an existing SEP IRA without even hinting to me. Rollover happened on 12/15/2022 so termination resolution and distribution forms had to be executed before 12/15/2022 - neither of which is done. DB account is still open with a few dollars. What to do to correct all this? Any expert opinion/comments appreciated (other than run away - seriously thinking about it). Thanks

David Assuming the same David, I found the ERISApedia webinar from 1/9/2020, slides 48 and 49. As stated no clear guidance. I also agree with the question of "is this approach reasonable". Who makes the determination on a reasonable approach, CPA or TPA or sponsor or counsel?

Hi Here a link of a prior discussion - hopefully attached correctly. There are others out there too. FWIW Unfortunately, I do not have access to Who Is the Employer?

Thank you for your comments. How about the second option with the 401k/PS?

Correction in the middle So, the $100,000 in LLZ is all taxable. Ouch.

Hi Joe owns 3 LLC taxed as sole-props. Joe is over age 50. Joe never had any employees. Let's call them LLX, LLY and LLZ Joe has a DB (no minimum required contribution for 2022) and 401k/PS plan. Only LLX and LLY are the sponsoring/adopting employs. LLZ never adopted either plan. 2022 net schedule c income figures are given as follows (assume after adjusting for 1/2 se tax): LLX: -$20,000 LLY: $22,000 LLZ: $100,000 Because only LLX and LLY are part of the plans, only their income can be used and therefore total income that is available for 2022 is $2,000, am I correct? Because there is 401k deferral election in place for maximum deferral, $2,000 would be deposited into the 401/PS plan as part of 2022 deferrals. So, the $100,000 in LLX is all taxable. Ouch. How about the following? Start a 3rd plan i.e. a new profit sharing plan and put in $20,000 (I know, 3 plans to deal with) and merge the new plan into the old 401k/PS plan in 2023? This would be option 1 which is my favorite. However.... Let's push it further (based on a previous conversation we all had), start a new 401k/PS plan effective 12/29/2022 with PYE 12/31/2022 and full year limitation year (LLZ has been around since 2020). Now we can put away $20,000 of PS and $25,000 ($2,000 was deferred in the old plan) of 401k for 2022. What are the flaws you can detect here? Thanks

Yes, check the document and see how the TH language is written. I have seen documents that were written where TH minimum is hard coded as 5% so 3% will not fly.

Amendments states on the last line and before signature lines "in witness whereof, the parties have caused this Amendment to be executed on ____________________." No date but signed by plan sponsor and trustee. Clearly the DocuSign summary shows the date it was executed. Strangely the resolution to adopt was signed and dated. I think they will have to resign with proper dating. I am curious though would the DocuSign documentation back-up have any legal standing on the date for signing.

Yes, it is for DB, thank you

Thank you all!

Hi I have an interesting question/dilemma. I was provided a plan amendment by another person. The amendment was sent to the client by DocuSign. It has 2 pages, a resolution and an amendment. Both pages were signed but only resolution was dated. Amendment's date is left blank. As they were both sent by DocuSign to be executed, there is proof that all were executed on the same date. There is the summary too. In your opinion, would the amendment be considered as signed on the same date as the resolution? Or, it will need to be re-executed and dated tomorrow? If this was not DocuSign related, I would not accept it but because there is no evidence as to when signed. I am curious on the legality. Thank you