Jakyasar

Yes, the troubling issue is with the document and not the calculations. IMHO, the document should not read 55, at least not for this sponsor. This is what I am asking for and nothing else. I also agree with the fact that when calculations/funding are performed, many other factors have to come into play.

In my humble opinion, there is a difference on how you write the plan document vs how you operate/fund the plan (many factors play a role on the practicality of administration). You can fund for age 62 but keep the funding under control with the assumption that you will pay out at 50. Afterall 404 allows a very big deduction limit after a few years of operation. All you have to do is keep an eye on the 415(b) limit at any possible payout age. My concern is how you write it in the plan document and keep it kosher on paper. I always thought, one should not put in 55 as NRA (may be as an early RA) unlessw the industry standard is a lower RA. Let's see if I opened the Pandora's Box here.

The issue with item 2 is, item 1 may not be reasonable and also, the law.

Hi Looking over a possible takeover DB plan. It is 2 years old. It is for a law firm. 2 partners are in their late 40s and early 50s The NRA is written as (I have not seen this before): Later of age 55 and 5 YOP and 17 YOS. Maximum NRA is 65 and 5th anniversary of plan participation. As this is not one of those special category of employers (like football players etc), how kosher is the way the definition is written? If kosher, how would you calculate the funding requirements? I would never use less than 62 but might be missing some allowance here. Thank you

In addition, depending on when the employees became eligible, you may have 5500 filing issues i.e. cannot file EZ even if no other eligible employee is deferring, they are participants. Also, if they were eligible before 2022, you have possible additional coverage, top heavy issues, missed deferrals, etc etc etc. Solo plans are marketed for 5500-EZ filers and have no flexibility for PS allocations and SH match (not that I have seen any) Good luck

Throwing in another question for a balance forward PS plan i.e. pooled account. Same scenario above i.e. asked in November for a distribution based on 12/31/2021 balance (assume document is written this way). No action taken by sponsor/TPA (assume the worst) to provide the paperwork and also distribute prior to 12/31/2022 despite the fact the participant asked for it. If paid in 2022, 100k but now in 2023 dropped to 80k. What do you do? This is different than participant got the notice but did not return timely.

SECURE 2.0 may have some reduced penalty but only if corrected within 2 years. Looks like, the first 3 years is out of luck, at least from I understand. Depending on facts and circumstances, can always go to the IRS, cry and blame someone that the participant was not aware of not was notified, etc etc etc. Do not know all the details, just a general info.

How would you write the amendment? As an 11-g or a general amendment specifying the terminated participant by job category or name. It may not be so clear cut, just thinking out loud and curious. This would be an amendment retroactive to 2022? I do agree with the amendment should be prepared and should definitely be done as the participant may create a lot of headaches since there is a significant difference between 2021 and 2022 rates.

The CPA just said not to include, go figure.

Ok, thank you

Sorry, my question, in this case, is what DC components are used to offset?

Hi CB You are absolutely right that I did not mention what kind of offset, it the DC plan AE offset. Thank you for pointing that out.

Hi Looking at a possible takeover. This is a question on what is used for offset calculations. I have not done of these in 20+ years. DB is 50% of pay offset by 26.25% of TWB, fractional DC has 401k+PS+NESH (mandatory 3%) What is used for offset? Thank you

But 5 years in a row and TPA does not know about the account activity? I still think it is quite a stretch unless the participant never disclosed the account (happens, right?)

I am confused too, didn't the TPA provide the client with the RMD amount each year? Or, did they actually expect the client to determine his own RMD for a pension plan and withdraw? If the TPA provided the info and the client did not take it out after one year, did they inform the client about the issues? 5 years in a row is a bit too much of a stretch for not informing the client each year and continue administering the plan as if nothing is wrong. Hmmmm. Moreover, when the TPA did the annual work, didn't they notice that there were withdrawals missing? May be I am not reading the original post correctly!

As I stated, nothing is excluded. Definition is W-2. Deferrals are pre-tax, that is why listed as "less" No 125 listed. To be used for cash balance, SH, PS and testing.

Hi Need to revisit the following as I am now getting contradictory info from CPA. There are no exclusions per plan document. From W-2 Box 1 $240,000 Box 6 $225,000 On the earnings summary Gross Pay $225,000 - matches box 5 less deferral $ 20,500 plus s-corp 2% $ 42,000 - medical premium less catch up $ 6,500 Reported W-2 $240,000v - matches box 1 What to use as salary for pension purposes? Thank you

Hi I am pretty sure the answer is no but wanted to see if I missed something here. A QRP with excess assets from a terminated DB plan which is allocated every year to the plan participants as PS allocation. The plan sponsor wants to make a contribution/donation to a charitable contribution using some of these assets that are in a suspense account. As far as I know, these kinds of contributions can only be made from IRAs. Just wanted to check and see if anyone has a comment on this. Thank you

pbgc time chart.pdf Attached is a great chart for PBGC termination. For non-PBGC, 15 days is for 204(h) notice - plan freeze. There is no termination notice deadline.

Truphao - reason to change is to lower the AB especially for testing purposes, it is a huge difference between 5.5% 417e table vs 4%GAR94 where the pay credit is always limited to 415. I agree with the facts that it is possibly 411d6 violation wanted to check out there this is a takeover plan needs to be redesigned anyway. David's question is a different subject.

Hi Looking at a possible takeover and have a dilemma I did not deal with before. Plan's AE assumptions are not great and need to be redone. Currently, post AE is 5.5% with 2022 Applicable mortality table (yes, hard coded in the document as 2022). I would like to amend it to a more favorable assumption that would reduce the AB for owner. I checked the math and based on current assumption, AB is $1,888/month. If I change to more favorable assumption, AB drops to $1,503/month which is huge difference especially for testing purposes. In either case, the 415 limit stays the same. If I change it now and the pay credit does not change, is this 411d6 violation because the AB drops but not the pay credit? Thank you

I see what you are saying, hmmm not sure I get it though. Time to stop working for the week.

Hi Looking at a CB document for someone. The formulation is written in a way I have never seen. For accrual/pay credit, no service requirement i.e. 0 hours. Crediting period is "Each Plan Year". For the formula within a group, they wrote "$2,000 however for any terminated participant during the year, they will receive 1/12th of the pay credit for each month they worked 1 hour". How is this possible? Aren't the member of this group entitled to full pay credit since no service requirement? What am I not seeing/confusing here? Thank you.

Hi All below are on a calendar basis. I have never seen this before. Hope there are some out there who have experience/knowledge on this. Company X left PEO on 10/1/2022. They want to set up a new combo plan for 2022 which will be 401k/PS plus CB. How are the PEO contributions and salaries applied? How is testing done, just from 10/1/2022 (salaries and contributions)? Are they supposed to be short plan years? Anything else i need to be aware of? Thank you in advance.

Wishing you all happy holidays and great, prosperous New Year. The best think tank ever.