Jakyasar

Old memory, possible.

Now that my memory is working as bit better (thanks to ASEA symposium), going back in my memory lane, I believe, at one point instructions stated that no cash values to be included (I may be misremembering this) and then IRS removed that language. I did work with 412i plans but luckily had only annuities, phew. I have now decided to include them in the 5500 forms.

Hi Bill Thank you for your input, yes I am trying to follow with them and see what took place. Of course, they are all hiding from me. Hope all is well.

Here is a new one for me. Brand new CB plan. It was confirmed that 50k was deposited in March 2021. Prepared all certifications accordingly (not filed the 5500 yet). I just got a follow up statement showing a withdrawal of 30k in April 2021. Was never discussed with me not disclosed. Does not affect the MRC so it is good on that end. Does not affect 404o so no issue with deductibility. Anyone had experience like this and what is the correct course of action here? I want to make sure that I go on record with them about the penalties, if any. I also want to let them know, very sternly, that this is not a bank account, once in, stays in. Already starting on wrong foot, time to fire the client? Already becoming a liability. Thank you,

Hi Mike Thank you for the reference as I am quite aware of it and have applied the provisions in the past. My question was not about determining the fair market value. Unless I am missing it (reread again), this rev-proc does not provide an answer on whether I should be including the fair market value of the cash value when preparing the assets for 5500 filing. If I recall correctly (old memory fading), many years ago instructions were specific on not to include cash value in the assets for 5500 purposes and then they removed it. Anyway, I will include. This is the first filing for the plan and this is why I am being picky. Thank you for comments.

Not a trick question, trying to find out more, thank you

Hi DB plan with life insurance that has cash value and 5500-EZ filing. Looking at instructions for 2020 5500EZ/SF. The wording on the instructions is " an insurance company qualified to do business under the laws of a state e.g. investment contracts with insurance companies". Also from 29 CFR 2520.103-1(c)(2)(ii)(C) "investment and annuity contracts issued by any insurance company" I remember a while back instructions were specific about inclusions of insurance cash value on the 5500 forms. Do I need to include the cash value? Thank you

Sorry, my keyboard played a trick on me. I do not see how the old db plan is not a predecessor plan. Thanks for pointing out.

Also, before putting a response under "other", you may need to check with the document provider and see if it is a minor/allowable modification. This can get tricky sometimes and an input from an ERISA attorney may be needed (not saying you need to here). You may take the document out of pre-approved status inadvertently. BG5150 made a few good points.

Only a dc plan which is still active. I am aware of the definition of predecessor plan but will look further into it. However it has always been my knowledge that, once in a db plan that was terminated, the offset always follows you except for a few exceptions. I do not see the old db plan is not a predecessor plan. I am still confused about the employment and vesting credit though.

This is where I am questioning myself on the break-in-service issues since there was no payroll and possibly worked less than 501 hours annually (what if worked over 501 hours annually). Yes, this is a predecessor plan as the old db was under the same EIN/sponsor. Sorry for all these questions as I have never encountered this in the past and trying to understand on how to apply the past 12 years where this person never had a compensation. This is strictly for vesting purposes. Still not clear if all prior service should be counted which in this case, I would agree with CB Zeller on the vesting.

Based on your calculations which assumed that his prior years of service is not included, his initial date of employment is 7/1/2020. The plan started in 7/1/2019 and he was not on the payroll for the 2019 year. He has not reached NRA which is 65 and 5 YOP which would make is 7/1/2025.

This is where I get a bit confused. No payroll for 10+ years though working, is that considered as working i.e. break-in-service? I am not sure about the hours he works, could be less than 500.

I agree but is he 100% vested based on the information I provided? He is 5% owner by attribution to the owner aka spouse.

Hi Company A had a DB plan which terminated 12 years ago and paid out all during that time - it was PBGC termination. They started a new CB plan effective 7/1/2019 with plan year ending 6/30/2020. Vesting service started with the inception date i.e. 7/1/2019. It is 3 year cliff. Owner's spouse was in the old plan and had been working however without any salary for the past 10+ years. Suddenly, they decided to include the spouse effective with 7/1/2020 plan year. Did the amendments and even added a special eligibility clause to add him effective 7/1/2020, just in case. The DOB is 7/15/1950. When is his first RMD due? Thank you for your comments.

Mine does not, I checked and also confirmed with the provider. I did some additional reading and there is a great paragraph in EOB. I am not sure if I am allowed to post it here. Moderator??? The HCE passed the test anyway so all good here but this was a good discussion and thank you all for your time and input.

Depends on how you test it for 110%. Apart from partnership, my comment was for a husband and wife plan.

Thanks Bill The article nailed it, perfect. My concern is how to adjust the assets. BOY assets would be cash and EOY would be accrual. The contributions would cover 2 years, is that an acceptable approach?

Hi Looking over for possible takeover dc plans. They have been filed on a cash basis in the past. I neither like nor believe in cash basis filings as my reports must match my filings, old habits. As far as I know, consistentcy is crucial when it comes to the filings. Is there anyway to switch from cash to accrual method and if possible, how can it be accomplished? If anyone has any experience, would appreciate any comments/suggestions. Thank you

None whatsoever

Very interesting but mine does not have that provision, I will ask the vendor anyway. Even if it did, I am not sure if it would work in my case. The employees entered the plan as an non-HCE and then became but lookback year method although no other entered the plan ever. So, by definition of any HCE, if a husband and wife plan, if one terminates and wants a payout, I still have to perform 110% test? Wow

Surprising to use for a plan covering HCEs only. I agree with the other 2 points.

Hi This is first for me and want to check if test is needed. DB plan covering 1 owner HCE and one non-owner HCE. 2021 AFTAP is certified at 165% so no issues there. The non-owner HCE is terminated a month ago and accrued a benefit for 2021. Do I need to check for 110% liability test? I do not think so? If yes, I will add FT to TNC and possibly use 430 rates. Is it ok to use ARPA-21 rates to test, if necessary? Owner is ok with whatever rate that would allow the non-owner HCE to be paid out. Thanks

Ok, actuary now agrees with me and also the valuation system does not recognize it where I have to manually adjust.

I agree with you. No suggestions so far. I am trying to understand if the software has an issue. I will continue to pursue this. Plan covers only husband and wife I.e. only HCEs and key. Thank you