Jakyasar

Lou No, you have to provide prior benefit structure and new benefit structure as of amendment date on the notice. Plan termination date is not required on the notice. Cusefan provided the additional requirements under PBGC coverage.

I have attended a few webinars for the restatements and late restatements, latest by Erisapedia. There was absolutely no mention of 7/31 falling on a Sunday i.e. extension to next business day. As Peter said, get it done this week. Do not rely on investment advisor unless they provide an official proof for the extension.

In addition to the minimum required funding (MRC), the contract between the buyer and the seller may require the plan to be fully funded i.e. even if there is no MRC, still would need to make the plan whole. You need to check this. If you need to make the plan whole, the amount will depend on the distribution year, 2022 or 2023 i.e. how you accumulate interest credit (could be partial). Thankfully no 417e issues (hopefully) Just my 2 cents in addition to the points made above. Also have to watch for 401a26 as at the time of freeze, some may have accrued a benefit and some may not. Other testing issues as well. I guess, 3 cents.

Good points

A follow up situation but this is 11-g related This time a cash balance plan. Vesting 3 year cliff and no prior service since inception. Need to include 2 categorically excluded but terminated employees to pass 401a26. Both worked over 1000 hours during the plan year. In general, I would partially vest them if the vesting was 2/20. In this case, would 33% be reasonable or 100% is the way to go? Thanks

Hi This is what I am following up with the client, hard to get a response. Thank you both for your comments.

Thanks, looking for some language on what is "facts and circumstances". I believe one would be if all were fired and not replaced. This is not the case here. I do not believe if all were let go because of a financial distress termination would create a partial termination. This is not the case here either. Any other thoughts on what can cause partial termination and/or guidance on any publication that would provide some explanation of what "facts and circumstances" would be? Agreed on your second statement.

Hi PS plan, first year (combo with CB). Vesting starts with plan inception i.e. no prior service is recognized. Vesting is 6 year graded, 2/20. 11 total participants during the year, some entered at BOY and some entered mid-year. Last day and 1000 hour requirement for contribution. 5 terminated during the year, some left, couple fired but all replaced with new employees during the year. Out of 5 terminated, need to include 2 to pass testing. Doing 11-g corrective amendment. Do I need to 100% vest or just partial vest? I am aware that some would 100% vest under 11-g rather than partial vest but do partial termination rules overwrite here? Any comments/thoughts are appreciated.

So, you cannot terminate and finalize a combo plan termination until end of year? DB is easy to terminate during the year as long as any corrective amendments for 410b and 401a4 are done under the DC plan?

This is what I remember as well but the question is, when do you test the plans and what compensation do you use especially if the plan is frozen/terminated during the year (no short year issue, as you stated, simple termination does not create a short plan year, just a shorter valuation). I mean, do all terminating DB plans have to wait till end of year to terminate when they are tested together with a DC plan? There has to be a way to tackle this, I just cannot seem to find it. Thanks

Hi Luke Thank you for your input. I was referring to a defined benefit plan so no account balance issues. Best

Thank you

Hi DB/DC combo plan. Termination of DB is a possibility (PBGC covered). Assume freeze date 7/31/2022 (small enough for 15 day rule) and assume termination date 9/30/2022. Distribution for the DB may or may not happen by 12/31/2022, possibly spills into 2023 as the rates seem to be getting better for 417e. DC has 401k/SH/PS options. What salaries should be used to determine the DC SH and PS portions as well as combo testing? Thank you

Any takers?

Hi Sorry if this was discussed before. My first age 72 calculations for 2 different scenarios and want to confirm my understanding: Scenario 1: Participant turning 72 on 9/1/2022, first RMD is due by 4/1/2023 and based on 1/1/2022 AB (fully vested) If they want to take by 12/31/2022, can they take 1/1/2022 AB*12? Scenario 2: Participant already receiving RMDs for the past few years. The past # were based on old tables and they do not need to be adjusted, correct? The new AB portion will be calculated based on the new tables, correct? Any corrections/comments are appreciated. Thank you

And the 25% deduction limit overall.

Hi all Second guessing myself (or being paranoid) and checking my thought process. Going back to my original question for the participant with $1000 salary but allocated $3000. As a reminder this is a target benefit plan i.e. normal cost is developed based on YOP and salary average. I did all the calculations by hand. Based on the salary average (going back a few years) and on plan assumptions, the normal cost came to $3000. However, 415(c) is specific about the lesser of 100% of pay or dollar limit. Based on 415(c), the participant can only be allocated $1000, am I not correct? Although the calculations are done based on DB plan, the limit is still 415(c). If I am right on the above, I should also test it for 410b/401a4 (though it will always pass at 100% on contribution basis). Happy 4th

Thank you all

Much appreciate your time, explanation and education, you learn something new everyday. Mine was a non-M&A termination.

Not even for safe harbor?. I have done one 401k/SH termination (SH was 3% non-elective) and asked the plan sponsor to provide a notice to the plan participants about the pending plan termination date which was the cutoff date for the deferrals as well as SH contributions. So, this is not required by law, especially the SH portion? Sorry not a 401k expert, just thinking out loud and may be asking too many questions.

Out of curiosity, in a 401k plan, should you not tell the participants of pending termination informing them that there will be no further accruals?

As a follow up, what is the corrective step to take for fixing the lack of 11-g amendment?

Hi Bird Thank you for your comments. As I stated above this is a conversation. I am not making the client do anything other than fixing 2020, the 415c violation. As this is a takeover, I have to let them know what my findings are and it is up to them on how to proceed and taking the risks. I just follow the orders up to a certain point. I am still not convinced (sorry for being dumb here) that once you fail the coverage, you can go ahead and provide the full benefit structure, as you do for your clients. Well, thanks again

I am not sure I agree but again...

Hi Bird I am not sure I agree with you on the allocation amount (just having a conversation here). In my humble opinion (I might be wrong here) You cannot simply allocate a full benefit based on the definitive plan formula unless you meet both the last day and hour requirements If an 11-g amendment calculation is required (lack of physical amendment aside), I do not believe you can simply provide an amount arbitrarily. It should be an amount up to the point of satisfying 410b and 401a4 e.g. if the plan formula was generating 3K (assuming last day+1000 hours satisfied) however only 2K was needed to pass 410b+401a4, only 2K should/can be allocated (assume top heavy is satisfied with a lower amount). Am I wrong here in my thinking? I still think, lack of amendment is an issue and not sure how to fix it. As I said, this is a takeover plan so need to provide options to the plan sponsor. Thank you