Jakyasar

Thank you

Hi A question for someone. I inherited an IRA from my parent. Can I roll over this IRA into my profit sharing plan? Thank you

Thank you all for your comments. I intend to bring this to PBGC's attention, will see how it goes.

Can an S Corporation Be a Member of an LLC? | legalzoom.com Hi Mike Company A is an s-corp that owns company b which is the llc which I am told is a disregarded entity. This is all new to me as never seen it before. Please look at the link provided (I hope it is ok to do).

Pay credit can exceed the salary, all depends how the formula is written in the document e.g. if written as "the lesser of 100% or X amount" then the pay credit is limited to the salary. This does not mean your deduction is limited to the pay credit. Also, your pay credit could be lower than the required minimum contributions. All calculations depend on the ages and salaries and also 415 limits under 415(b).

Mike It was similar and re-asking as I have more facts now. I was told: Company A is an S-Corp Company B a disregarded entity. David, I am aware the PBGC pilot program (in fact working on one for financial person now). Just wanted to check with the gurus out there first. All your comments are much appreciated.

Hi I own Company A 100%. No employees and I am not on payroll. Company A owns Company B 100%. Company B employs me and my spouse. We both get salaries. Company B sets up a DB plan sponsored by Company B only. Is the DB plan covered by PBGC? None of the companies are professional entities. Thank you

Yes as long as US based income. No issues except what happens to the monies once they terminate the plan? All depends on the country they are associated with for taxation.

Hi Friday late, fried brain, cannot think straight. Checking a design for someone. 401k+SH match+PS are the provisions. Plan is top heavy. 401k+SH has age 21 and no service for eligibility. PS has 21/1. The sponsor will be making a PS contribution (all in their own group). All satisfying the eligibility get the gateway (a little over 3%). I have 2 participants employed in 2021 (both worked over 1000 hours in 2021) and entered the plan in 2021 and also deferred (I have 5 others employed late 2020 or in 2021 but did not defer). So, they got the SH match. But they do not get PS/gateway as they are otherwise excludable employees. The other 5 who did not defer got no match and no PS/gateway. Am I correct? Thank you

Best if you go back to the client/CPA and get the schedule c information (preferably copies) and deductions taken for all years. Just because they put does not mean they deducted it. Kac1214 made a good point on this. Never assume what that is not clear/confirmed.

And de minimis provisions have to be in the plan document, correct? How do you go back to 2018? 99k/year is a big number to be generated on de minimis especially where 415 may be limit due to lack of 10 years of service, as CB indicated. Any chance there was also a corporation adopting the plan?

Cannot justify either, one is plan provisions which I do not want to touch (the return on investments is over 7%), the extended NRA not an option as the HCE is not expected to survive the summer, sadly.

Calavera, I am aware of the math but thank you, very short in assets C.B., not going to happen, they do not have it. I guess no other way but wait a year or so and beef up the assets. They may even decide to terminate the plan so can get paid.

Hi Doing a 110% liability test for a CB plan. As far as I know, one can use any reasonable method as long as it is approved by the sponsor and stay with the decision forever. The methods I am aware of are, 415 lump sum assumptions, 417e assumptions or 430 assumptions. Assume AFTAP is not an issue. Usually 430 assumptions would yield lowest amounts but in my case nothing is working so looking for another way to lower the liabilities and see if they can pay the HCE who is now terminated and under disability. I would like to get this done before an accrual for 2022 happens which will make things even worse. Any other methodologies that I am not thinking of? I know the bond/annuity etc options but trying to avoid. Thank you

Oh, believe me it is tingling but I get the response that it is IC, not my determination. I can only let them know what I think the issues are, other than that, not much I can do but rely on what the CPA/Sponsor tell me. Thank you for all the cautionary information.

I am testing the plan both ways and make sure that I pass either way with no contributions (always like to cover any future surprises - I do not always believe that 1099s are always IC's). After all it is the CPA/sponsor telling me what this person's employment status is, nothing I can do on this. Of course, the future issue would be if the IRS determines to be an employee, how to correct all missing contributions.

So not in testing at all, correct? All other monies are being returned, I was told, I am not the TPA, just doing testing.

Hi Combo plan, CB+DC. An HCE was employed in 2020 as a w-2. Excluded from CB but included in the DC. Now I am informed that he terminated as an employee on 1/2/2021 and became 1099 employee for 2021. He had $0 W-2 for 2021 however they make 26k deferral plus non elective SH on his behalf for 2021. How is he treated for all coverage and non-discrimination testing? How is his deferral/SH to be corrected? Thank you for your comments.

I did not check but can you change from one year to another on how to calculate the balance? Seems to be inconsistent, at least to me. Just curious. I agree that, one can do either cash or accrual but does it have to be consistently?

In a recent webinar, the presenter mentioned that he would be more comfortable with 100% vesting, especially given the amounts are usually very small. In my opinion, jury is still out on this. As Mike said, got to give something.

Hmmm, now I am confused with different opinions, still researching myself, just cannot seem to find anything that matched my situation. To be continued.

Makes sense so no OEX option and must provide gateway. Much appreciated, thank you

Years of Service is Periods of Service if elapsed method is used. Definitely getting PS allocation, no ambiguity there. Still trying to understand if this employee is otherwise excludable - OEX - as always worked under 500 hours (just got updated information). If OEX, then, although getting PS allocation, no need for gateway??? Also, can be tested separately as OEX, right? Thank you

Hi Looking at a combo plan with an existing DC plan. DC plan effective 2018 had a special entry that let in a part-time employee in 2018. This employee always worked under 500 hours. Elapsed time method is used for all provisions (I am by no means experienced in using elapsed time) DC plan has deferrals, non-elective SH and PS. For PS, last day rule is required. In addition, participant must complete period of service under elapsed time - I do not see any provisiosn as to what period is - will be checking with the other TPA. Adding a CB plan for 2021 (assume all ok for top heavy) which will have 21/1 assumption with 1000 hours for eligibility and accrual. This part-time employee will never be eligible in CB. Cross-testing both plans. Does the part-timer get gateway? He is in the testing because employed on 12/31 and also has 401k deferral and SH (possibly PS too). Can he be tested under otherwise exclude (the only one and non-HCE). Thank you

They look like LLC/partnership investments which provide k-1s at the end of the plan year for the plan asset valuation. In general, they are considered as non-qualified assets thus not eligible for SF and must file 5500 plus 100% ERISA bond coverage. Just speculating.