Jakyasar

I fifth it. Thank you all

Hi 100% owner Joe marries Jane who has 2 adult children from prior marriage (ignore the 1 year rule) Joe refers to them as his step-daughters. Jane and the 2 daughters work for Joe's company. Jane is an HCE by attribution. How about step-daughters? In one case assume they are adopted and in another they are non-adopted. Any other scenarios? Thank you

Thank you all for your insights.

Let me see if I understood this correctly. Minor child is deemed to own 25% of Company A because Son (minor child's dad) owns only 25% of Company A. Because the minor child owns less than 50% (or is it 50% or less?) and does not get any attribution from grandfather (75% owner), there is no CG issues. Did I understand this correctly? It is the attribution that threw me off here. Thank you

Here is a new one for me. DC plan sponsored by Company A Company A is owned by Dad 75% and Son 25%. They have employees and covered under the plan. MD office Company B is owned by Son's wife 100%. This company has 2 employees. Dental office Son and wife have minor children. 2 companies have no connection whatsoever. This is in New Jersey. Do I have controlled group issues? I would not be asking if Son owned 100%. Not sure how and if attribution plays a role in here. To complicate matters, they do not want company B in the DC plan. Company B wants to do SEP. Thank you

Oh yeah, never forgetting, thanks

Very good point, thank you for pointing out.

Good morning Drawing a blank here. Can QRP be used to satisfy 3% non-elective safe harbor (or even safe harbor match)? This is in addition to profit sharing allocation that will be provided as well. Thank you

Any takers

Hi I am fairly certain that it is ok to do the following but want to confirm: Joe owns 50% of company A (other 50% owned by unrelated person) Joe owns 100% of company B No affiliation between the 2 companies. Joe can set up a DB plan separately under each company with full 415(b) limits as long as ownership is 50% or less in company A, agree? Joe can set up a DC plan separately under each company with full 415(c) limits (58k in each company) as long as ownership is 50% or less in company A, agree? Please disregard any PBGC coverage issues as this is a general question Thanks

Hi 3 year old DB plan (combo tested with a PS plan) hard frozen early 2021 (before 1000 hours accrued) with no accruals and no further new participants. EOY val. Top heavy and PBGC covered. Assume that 401a26 will need to be tested. Any reason why I cannot use acc-to-date method for 401a26? I just cannot seem to find one but wanted to confirm. Will not test together with the PS plan for 2021 as I do not handle the administration of the PS plan i.e. not sue if historic data is correct or not - to use acc-to-date method. Thank you

Agreed and thank you for your comments

You can and must use 2021 forms if passed 12/31/2020 deadline to file. If the rule changed, do not know but it has been for a long time.

Agree on the 16.67% No, CAA does not apply here. Still waiting on the circumstances of all terminations i.e. voluntary or let go. My question was very specific for the cb plan so may I assume your comment is very specific to the cb plan where the determination of partial termination is based on the participant count in the cb plan only and not for all plans sponsored by the employer? This is where i am a bit confused. Thank you

Hi Combo Plan. Total 15 participants DC plan has all 15 participants of which 6 are terminated CB plan has only 6 participants of which only 1 terminated (9 others are excluded categorically) Do I have partial termination issue with the CB plan? Thank you

Why 11/30, last day was 11/23

Any takers?

Hi Have to admit as it has been quite a few years that I had a frozen DB plan to deal with and 401a26 testing so a bit rusty. Plan is 3 years old and frozen beginning in2021 - hard freeze i.e. both participation and benefit accruals. It is EOY valuation. No terminations/pay outs for the past 3 years. It is top heavy and PBGC covered. How do I determine if 401a26 is required for 2021 for the following data as of 12/31/2021: Assets: 350k FT: 340k Lump sum @ plan AE: 355k (assume 100% vesting although everyone is at 40%) Lump sum at 417e: 580k (assume 100% vesting although everyone is at 40%) 2020 SB FTAP: 138% 2021 AFTAP: 105% 2020 SB line 16 - prior year funding %: 80% What say you? Thanks

I see now what you are saying. Thanks for clarifying.

CB, before I have the AFTAP issue for 10/1, I have the funding deadline of 9/15 so to answer your question, I would never set up a plan past 9/15 (assuming a calendar plan). Are you also saying, it is ok not to certify AFTAPs in the first 5 years even for a plan that has employees? Just thinking out loud. Hojo/Calavera, interesting point but I do not rely on SB for AFTAP, I may be missing something here though. Thank you all for your comments/input. Good discussion.

Interesting as that is not how I apply it but not relevant here. Yes, the client has SBs for all years. May I ask why?

It is more than 5 years old. I agree restriction does not apply in the first 5 years but if the AFTAP is certified with less than 60%. Here there in no certification whatsoever. This is, at least to my understanding. I appreciate your recommendations though. Thank you

Update, misread the document, all options were "no". So what is the fix here if no AFTAPs were ever done? I never had to deal with this before (had a few automatic restorations though) The way I read, no limitations and no automatic accrual 52. [ ] The accrual limitations under Code section 436(e) will continue to apply to benefit accruals after such limitations no longer apply to the Plan (Section 5.05(e)(2)). 53. [ ] IfC.52 is not checked, the Plan will provide for the automatic restoration of benefit accruals that had been limited under section 436(e} (Section 5.05(e)(2)).

Hi Here is a new one for me. I am looking into taking over a set of one life-owner only DB plans. I am told that AFTAPs were never done because these were one lifers. AFTAPs are never exempt unless frozen prior to 9/5/2005, if I recall correctly. Some of them have been around for many years. I believe 101j notices are not required but benefit accruals should have been frozen in time. The plan document provided had no 436 options elected which is odd - checking with the vendor (same as mine) on what can be done here or even it was possible to complete the document without any of these provisions. If anyone has any experience with this situation, can they share on the fix? Thank you,

Thanks all I was concerned if it can be changed so that a terminated participant can switch from being a HCE to NHCE. I will try to clarify a bit more and add a bit more information which I forgot to add. This is a question for DB/PS combo. DB plan paid the employee out in August 2021but PS is still pending and will not happen till 2022. Salaries not yet determined for 2021 for the active owner. Per lookback year to 2020, was employee was HCE. Now would like to amend to top-paid group prior to 12/31/2021 and make the terminated participant a NHCE. As a reminder, DB benefit was paid out and PS is still pending. In order to change, must amend both plans for cross testing. I hope I was able to clarify and not complicate further.