Jakyasar

Datair does it too and nicely, at least my experience. Same way Bri explained.

Hi Existing DC plan with NRA 65 only. Plan effective 1/1/2018. Participant DOB 1/1/1946, DOH 1/1/2011, DOP 1/1/2018 thus NRA attained on 1/1/2018. Looking to add a CB with NRA 65 and 5 YOP Participant attainted age at val date (EOY) 75 with NRA 79. This is for the CB plan. When testing for combo plans, the system used 75 as the testing age. Is this correct under 401a4-12? Thanks

1000 hours of service, if it is in the plan document

Even if you do not have last day rule, can be amended prior to accrual of 1000 hours of service, assuming you have one. TWB %/level must be spelled out on the AA.

Any thoughts on late filing penalties for 5330?

Sent one by private message as I wrote one many moons ago.

Hi Lou Thank you for your comments. I agree on the 1st one, easy. I am not sure if earnings is needed as this is a pooled account. I will just apply as contribution already made. On the possible missing contributions for the owner, 5330 is late for 2020 as was not filed by 10/15/2021. This is a concern, at least for me. Would the IRS come back for late filing penalties? I do not know. The 10% penalty has to be paid one way or another. As the contribution will be corrected in 2022, no excise tax is required for 2021. I still cannot believe how they missed the 415(c) issue. Thanks

Hi Taking over a TBP - target benefit plan - with some issues that I was able to determine for 2020 plan year: 1- Participant had $1,000 salary and got an allocation of $3,000 - they did not check this 415(c), 100% compensation limit rule even if the report clearly stated 415 violation. They simply applied the contribution based on the formula without looking into the 415(c) limit. 2- The owner was allocated $0 but I think should have had an allocation due to the incorrect calculations. The owner had $10,000 in salary. So: The contributions were made after the end of 2020 plan year so I can fix the 415 issue but the fact that the deduction was taken is another issue. What to do with the excess deduction (assume no allocation to the owner for this scenario). Cannot allocate to others as all TBP calculations are based on a formula. If I determine an allocation was due to the owner, I can use a portion of the excess from above but still would be short. As the contributions are mandatory, how to correct the missing contribution? For arguments sake, let's say $5,000 is short for 2020. They probably will need excise tax of 10% for each 2020 and 2021 i.e. 5330. Any suggestions especially of self-correction? Thanks

Wow, thank you all for chiming in. To confirm my understanding and what I suspected, only PS can be seasoned, conceptually.

It is a giant red flag to have insurance in pension plans, period. I will see what I can find but if anyone has comments, I welcome them. Thank you

Hi I have not dealt with insurance in DC plans for many years and need a refresher. Plan had 401k, 3% NESH and PS provisions. Assume whole life thus up 49.99 percent cumulative limit of the contributions. They want to use all 3 provisions to maximize insurance. Which provisions have seasoned money for future? PS definitely. Thank you

My doc is different and does not have the same options as yours (I am familiar with your doc's language) Anyway, thank you all for the feedback.

I do not put a percentage in the DC plan. Just says DC will cover top heavy.

Hi Testing 2 plans together for all. DB and 401k/NESH/PS plans. Top heavy provided under DC plan only. All participants benefit under both plans. Key employee is getting 0.5% accrual in the DB and 3% allocation of NESH (plus full deferral), no additional PS for the key. Combined gateway minimum is 4% (including 3% NESH) What must I provide to all non-HCE's as additional PS allocation, 1% or 2%? My vote is 2% but just wanted to check. Thanks

Thank you both. A hypothetical follow up. Say, you found this out in September after the plan year end and it was not corrected at all. The employee filed their return with the assumption that he/she deferred. He/she also received 3% NESH. What happens now?

Hi Not a 401k expert 401k plan with 3% NESH+PS An employee erroneously was allowed to defer in 2021 as never met eligibility. Got the refund timely, I am told Totally excluded for 2021, correct? Thank you

To both, much appreciated. Decided not to use it anyway.

Ok, I thought you mentioned me as anxious. Yes, we are already proceeding with the 6% limit and the client will bite the bullet and stay with 6% deduction for 2021. No idea when we will get a determination from PBGC. But I bet that they will not be shy about imposing late filing interest charges once they determine the plan will be covered wayyyy after 10/15 deadline.

CB plan excludes them categorically. PS plan provision is everyone in their own group. Not an issue as the sponsor is a corporation. Now technically no one is included/excluded by name, at least in my opinion but I may be wrong.

Reasonable classification

Hi -- Census: HCE1 & HCE2 NHCE1, NHCE2 & NHCE3 CB plan covers HCE1 and NHCE1 401k/PS covers all In general, I managed to pass annual but due client's request for the HCE2, things got complicated. 410b is not an issue, passing both ratio and ABPT. Is there a way to test HCE1, NHCE1 & NHCE2 under annual method and HCE2 and NHCE3 under component rule? The reason I am asking is because neither HCE2 nor NHCE3 are covered under the CB plan. Thank you

There is no anxiety, just frustration on how long it is taking.

Hi I want to check others' experience on time frame and expectations for getting a PBGC coverage determination. Applied for determination on PBGC coverage beginning of March 2022 for a financial company. Was contacted for additional information multiple times during March and provided everything they asked for. Last communique was on 3/31/2022. Haven't heard from PBGC by mid-April so started following up multiple times and the responses I have been getting are: "We are working on the request for an opinion letter for the proposed plan. I do not have an estimated date that a letter will be issued." "We still don’t have an estimated date for issuance of an opinion letter. We’ll let you know when we do." This one was last week. Anyone had a recent experience? Client is anxious as this is for 2021. Thanks

Thank you both.

Here is a new one for me. PBGC covered DB plan, owner plus 1 rank&file employee. Client pushed to have the only non-owner participant to be paid out in 2021 after employee's termination. Client provided the final salary paid for 2021 based on the final payroll (even had them confirm). The final salary for was lower than prior years and did not affect the average compensation Provided the lump sum and they paid out. So, now the plan was just covering just the owner for the rest of 2021. Went to PBGC and got exemption from further coverage effective 2021 year. All good, well.... Just got the actual 2021 w-2's and the actual salary is much higher that I was provided and affected the 3 year average compensation i.e. the employee was under paid, a lump sum of somewhere between $100 to $200 - did not do the actual math. No 415 issues whatsoever so no MASDs etc. The question now, what happens with the PBGC exemption? Technically I still do have a rank & file as of 12/31/2021 with a $1.50 accrued benefit and very small lump sum due. Also, can they pay this participant out based on the prior distribution election form (IRA rollover)? Anyone had this issue before? Thanks