Jakyasar

Hi Plan year is 7/1/2021 to 6/30/2022 Limitation year is plan year. What is the 401k deferral limit? Thanks

Not yet available to me but I believe they will close the account and transfer the contribution to a new pension account with proper title/trustee. Still not sure what to do with the earnings, if any. Thank you

Hi Luke All good questions, do not know the answers yet. I just found out that the information yesterday. I am assuming you are asking whatever was listed on the account and not the document. If I may ask the reasoning of why you are asking these questions, very curious. Thank you

Welcome to the club. Kenneth, no rolling dice, it is big money. Follow up, what happens to the interest earned on the deposit?

C.B., thanks for the additional comments. Off calendar plan is not an option especially with deferrals involved, against my rules. So will look into short plan year but still cannot wrap my head around it on how to avoid the full corporate year. Since I have no proration limitation here (salary will be around 100k), short year is fine. There will be no PS, just deferral+SH match. Thank you and Bri for the comments.

Interesting thought but nor for me, we will have them take the money back and re deposit - possibly mistake of fact that the plan did not exist. I do not think there is right way or correcting this but still good faith, at least in my humble opinion.

Hi Bri No sure what you are saying here, a lot of assumptions that may or may not fly.

Here is a new one for me. Sent docs for 2021 plan year 5/31/2022 and they executed on 6/3/2022. I now get a confirmation that they made the deposit on 5/23/2022. So, what is wrong with this picture, if anything? Am I being paranoid that they opened an account without a plan document and also without an executed plan document? Thanks for comments.

Hi Bri I do not see how 1/2 year would be different than the full year here (other than proration). Are you saying that, if 1/2 year is done, they can also do a PS allocation? I don't think either scenario matters here. Just thinking out loud for discussion purposes. I am going to set up a full year 401k+SH and move on. No other contributions.

Also, your first part statement will only work if the plan's hour/last day requirement is very liberal otherwise the plan will need an 11-g amendment and partial (or full, according to some) vesting needs to be provided.

Hi Lou I agree with your latter comment but I do not wish the client to be testing case for this, if the plan is audited. However, I am not planning to have any PS allocation, just 401k and basic SH, both 100% vested.

Hi David Yes, it is something that one needs to alert PBGC with any changes (hopefully the client will let us know). PBGC letter is very clear on that. Good point though.

Hi all An update. Finally got the determination from PBGC as NOT covered. Based on all the information they asked for (and they did ask a lot), they determined that this particular financial company is a professional entity due to the owner's credentials as well as other criteria. It took them 5 months to provide the determination. I guess never assume is the morale of this story. Just sharing.

There is no PS, only SH match and depending on if a deferral is made or not. There is no vesting issue for these 2 provisions. I may even design the plan without any PS provisions and add in 2023. Not sure if I agree with the short plan year approach.

Hi A corporation wants to start a new 401k/SH plan (basic match) for 2022. The only non-owner employee was fired early in the year as was stealing money from the company and worked over 500 hours during the year. If the owner sets up a 401k/SH plan today for 2022 and makes no profit sharing contribution i.e. deferral plus safe harbor match, I see no issue, correct? How about, adding profit sharing? As the employee would need to get an allocation for 2022 to pass 410b, would the employee need to be vested at all? Thanks

Hi Peter This is what I remember and thank you. A thank you to others as well, good discussion.

Good memory But my question was more hypothetical (and out of curiosity) where this plan has other participants and not just the owner. Reminder, pooled account. The 2020 RMD waiver does not work here as this is a plan termination. Thanks anyway.

Interesting as I am doing a valuation during the plan year for distribution purposes. So, if the assets went down by 50% (exaggerating), still need to provide the RMD based on 12/31/2021 balance? What if the assets went down such that they are now less than the RMD (again, exaggerating for effect)? What am I missing here, just curious?

Hi DC plan terminating and will do distributions in 2022. Pooled account. Do not recall when i did one last time so asking out. Owner has been taking RMD's for sometime. There are a few other participants. I am thinking of allocating the RMD based on the distribution amount for 2022 e.g. if the total distribution is 100k, take 10k RMD (assume correct amount) and rollover 90k Is this ok or I have to provide RMD first to the owner based on prior year balance and then allocate the distribution based on the balance? Thank you

Once eligible, top heavy does not have hours requirement, only last day rule, if written in the plan document. Is this something you have in the plan document?

Also watch for 411d6.

So, if starting 10/1, must give a notice by 9/30? Assume match.

A follow up on this as I was just told something by someone that I am not aware of. Existing PS plan. Wants to add 401k deferral and SH for 2022. As far as I know, it has to be set up prior to 10/1/2022, still correct? But this someone told me that, a notice has to be provided 30 days prior to 10/1/2022 i.e. by 9/1/2022. I must admit never heard of this before. What am I missing? Thank you

You were lucky

Interesting, so you got a DL? One issue dealing with hedge fund assets was the proper valuation. Dealt with a few of them in the past and it was challenge to get a proper valuation.