Jakyasar

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

Hi Having a brain freeze for a change. I have not had the following situation for many many moons. Also having a discussion with an actuary. DB plan, covering husband and wife, both HCE and both key. Both way past NRA/NRD and in their 70s. Both are at 100% of pay and fully accrued in prior years. Low average salaries, in the 30k range. My software tells me that I am failing 401a26 and actuary agrees. I tried to use accrued-to-date method but the software does not allow me to do so. I was told that for 401a26 to use accrued to date, plan must satisfy 410b. What am i missing/not seeing here, sorry cannot think straight today. Thanks

A curious statement "IF the employee is paying social security tax then they would in fact be able to participate". Excuse my ignorance but how can they pay social security tax if the income is not US based? Not an expert, just thinking out loud. Peter asked the right questions. I had employees living oversees and being paid from US company (they were not US citizens) and they had to be included. May be not the same situation as yours?

Can you pass 410b utilizing average benefit test approach by increasing contributions to participants of A which would be done under 11-g correction? As A filed their return without any extension (and so did B), deductible for 2021. Also, which option for correction methodology was selected on FTW document, custom or based on the document provisions? Assuming that it can be corrected by VCP, can it be done by 10/15/2021 deadline (not sure if any deadlines imposed for VCP correction before a deadline)? Sorry if I missed these comments/suggestions and not being viable. Thinking out loud and curious.

Gilmore, depending on the vendor, you may get a different response from different document providers, as I experienced with my various communications with them. I for one believe in full restatement but that is me. I am curious what others will say.

Too many issues here. The penalty for 101j notice itself, which I assume was not provided, is going to cost quite a bundle. Hopefully no distributions were made which is another issue as no AFTAP i.e. less than 60%. If no SB's done, may have serious funding issues as well. And the list goes on.

Thank you Bill, hope all is well.

Hi I just did the calculations and the participant gets $3.25. They will make the deposit into the account for late deposits. @15%, the penalty is 49 cents. Is there any requirement to file 5330? This seems so ridiculous.

Agree with Belgarath and CB . Upon audit, far too many issues plus the monumental dollar amount for penalty instead of $750. The client would blame me if I took the practical approach. Thank you all for your input.

Hi Bird, I for one do not agree with your approach, sorry. Kind of agree though cannot do on corporate extension. Will see if other opinions. Thank you,

Hi Just curious about the following: Calendar plan, final distribution done in November 2020 i.e. final 5500 form is due 6/30/2021. So a short plan year. I was just told about this today which means 5558 was not filed timely. The sponsor is a calendar C-corp which went on extension for the 2020 filing. So the due date of the 2020 corporate tax return is extended to 10/15/2021. Can the sponsor rely on this automatic extension and file the final 5500 forms by 9/15/2021 - extended due date for a November filing? Or it has to be thru DFVCP? The following condition from the instructions may not make it possible: (1) the plan year and the employer’s tax year are the same. Your comments are appreciated. Thank you

The plan is all hce's and family members. All assets in a pooled account. Really appreciate your input. I actually did the higher of the 2 for loss earnings. Thank you