Jakyasar

A follow up question, sorry if discussed before If I am electing to use any of the ARPA-21 provisions for funding/AFTAP/amortization for 2020, do I need to attached an addendum to the Schedule SB for 2020? For example, I used the 15 year amortization for 2020 for a brand new plan. SB, line 41a has reference to PRA 2010 only. Another example, I have an election to switch to ARPA-21 for funding for an old plan. Thank you

Why can't you say "Any HCE who is not a shareholder of the corporation is excluded". If any other type of entity, like partnership or sole proprietorship, you should be able to tweak the language. As SSRRS mentioned, some documents have the "other" language permitted but I would still check with the provider for the validity of the language. If multiple owners, you may be able to tweak by adding a majority or minority owner (with some additional proper language). If cannot be done that way, name should work but need to check with your document provider and make sure it is ok i.e. the additional language will still keep the plan in "pre-approved" status. Using names may also force you to pass ratio test

Much appreciated and thank you

Hi A young employee is a full-time employee for couple of years under "student visa". Is it reasonable to exclude under "anyone who is on a student visa is excluded". He is also a non-resident alien which is standard exclusion in my documents. Unfortunately, must be included in all tests due to full-time status which US based income, at least they way I know. Thank you

I agree with Bill, run away. However, if and when you hear from ABCD, if appropriate, could you please share what they will say? Good luck

Thank you

Because I want to start with 15 from the beginning and not worry about later changes. Thank you.

Hi I need to confirm the following as per my understanding. Looking into a 2020 db plan design with providing prior year service. Plan has a minimum required contribution (MRC) based on amortization of funding target. Not worried about MRC as they want to maximize contribution. Per law, 15 year amortization is effective for plan years beginning after 12/31/21 with an option of election for 3 prior years. I am thinking to elect to have 15 year amortization starting with 2020 plan year and also have the sponsor to adopt the election (election is required to adopt 15 years, as per my understanding). Am I missing anything here? Thank you,

I had a discussion about item 4 with a TPA who stated that not all sections to be completed in 4, just what is corrected? Any comments? I believe all have to completed no matter what the correction is. I agree that 4 should be completed. Sometimes did not matter as in the past Clients received letters from the IRS asking about where the filing was with the uncorrected info. 4 was clearly reflecting the corrected info. Thanks

Hi I am no expert on 8955-SSA but was having a discussion with a TPA. Whenever there is a termination of a participant and the participant is not paid out by the end of the plan year following termination, I file 8955-SSA, regardless of plan type. I have always known this way. The discussion is about the "deferred benefit" which the TPA stated that is only applicable when the benefit/account balance is not due till NRA i.e. plan does not pay benefits till NRA. Also, TPA stated that if only a 401k/safe harbor plan, does not need to file 8955-SSA (all benefits are 100% vested at all time). Is this correct per instructions "Plan administrators of plans subject to the vesting standards of section 203 of ERISA must file Form 8955-SSA."? Are there any situations where 8955-SSA is not required to be filed for any qualified DC and/or DB plans? Let's leave 403b plans out and this is a question for DC or DB plans. Terminated participants may have partial or full vested benefits. Does it matter if the DC plan is a money purchase plan or a profit sharing plan where the normal form is J&S? What am I missing here? Thank you

ESOP guy - interesting case. Do you remember where in Sal's book this reference was? As Gilmore stated, your situation is different than mine but I still would be interested as to how they were not participants at BOY when they were retroactively, just curious. I never use retro to beginning of year.

First time I have seen the following in my many many years in this business. I am looking at a 5500 forms prepared by another TPA. It is first filing and for 2020 (calendar plan). 401k/safe harbor/profit sharing plan. 401k feature started late in 2020 - adoption date of the new plan. Not a short plan/sponsor year. Plan effective 1/1/2020. Safe harbor and/or profit sharing deposited after plan year end. All participants have been employed more than few years so eligible under 21/1 rule as of 1/1/2020 i.e. entered the plan on 1/1/2020. On the 5500 forms, participant count on 1/1/2020 is 0 and 12/31/2020 10. All 10 were eligible as of 1/1/2020 - no one entered the plan after that date. The way I know/done is the participant count on 1/1/2020 is 10 and not 0. What am I missing here? Thank you

Hi The assets were a mixture of cash/in-kind, as permitted. Thank you for your comments.

Hi Late Friday night, thought was going to relax and therefore, shut down the brain activity. However, got an email from a client with not so great news as distributions were not completed by the dates as I provided. When it comes to determining DB plan distributions, I am a stickler to due dates for the distributions to be physically completed. I use monthly adjustments. For example, if a participant was born on the 15th of the month, the distribution has to happen physically on 14th otherwise I recalculate the amount for the next month cycle. The software I use also agrees with me. I am working on a PBGC termination and this is the first time I need to deal with request date vs actual transfer date issue for distribution. I instructed the DB distribution had to be finalized by the 14th of the month. The client provided a letter to the investment house, requesting this transfer to be completed on the 14th , on the 14th. However the physical transfer of assets occurred on the 17th due to investment house procedures/settling of transfers. I have actual letters provided with the 14th date. To make matters more complicated, the per share value of a stock held in the account was lower on the 14th than the amount on the 17th which creates excess of 415 limit (participant is over age 70 and at 415 limit) at the time of physical transfer. As I need to provide detailed documents to PBGC showing the amounts distributed and possibly how they were calculated, which date of payment is acceptable/correct one? If it is any relevance, they transferred the assets to the existing 401k plan. I hope i was able to explain the dilemma here. Thank you,

Thank you for sharing your experience. Have a great weekend.

Hi Peter Thank you for providing the links however I have the actual PTE although my recent online search including the website you provided did not locate it for me. I was more looking for any input from anyone who may have had some recent experience and see if any new rules/regulations that I may not be aware of. I have not had this situation in well over 10+ years. Thank you,

Hi I have been doing some research and see if there is an update to prohibited transaction exemption - PTE - 79-60. I have a broker who wants to start a defined benefit plan and include insurance in the plan where he is the broker. I have always known about the 5% rule i.e. his commission from this transaction cannot exceed 5% of the total insurance commissions income received for the year. I found nothing to the contrary i.e. no changes. Please let me know your thoughts/comments, if any. Thank you PS insurance in pension plans should be illegal

And make sure that it is very well spelled out in the agreement that B is taking over the liabilities.

OEX - otherwise excludible - is that what you meant with your question?

Very good and sunny bright side, always love the OEX testing, can create miracles

Thank you both for your patience and explanation. You learn something new everyday.

Sorry being a bit thick headed here as I am trying grasp this concept (in theory, as I never had to deal with this scenario in the past). So, employee (the only non-highly compensated employee) is over age 21 but never worked (and will work) 1000+ hours at any given 12 month period. New plan with no initial eligibility, employee becomes a participant, at least this is what I understood from initial post. Now you are saying let's change the plan's eligibility to 21/1 during 2021 and therefore the employee is out as a participant for 2022 - all this is retroactive to his initial eligibility. This is what I am not grasping, interesting. I am definitely missing something in the law here. As Lou S. said, still a participant for 2021, this is clear. Time for a vacation and may be then, I will understand. Thank you for trying though.

Not for safe harbor and not for safe harbor, right? I guess I am seeing the logic here. Once you are in and NHCE, hours do not matter for top heavy and safe harbor. May be I will get it later.

BG5150, once employee is in, how do you avoid 410b, 401a4, SH, top heavy? This is a non-key/NHCE. What am I missing here? Just curious.

The question was theoretical with the assumption that they will be making 2 catch up within 12 months. Thank you