Jakyasar

Hi I was asked the following (not sure if a DC plan or 403(b)). Not sure if the deceased was already receiving RMD and do not know the ages of the beneficiaries. Assuming that the sisters get the amounts this year and rollover into their IRA's Q1: I do not think they need to get an RMD for 2020, correct? Q2: They need to distribute the IRAs and taxed on within 5 or 10 years? Q3: When will year 1 start? Thank you

Hi CB plan with 0/0/100 vesting. This is the second year. (Plan year is 7/1/2020 to 6/30/2021) Currently 5 eligible employees, 1 owner, 1 non-owner HCE and 3 non-HCE 2 non-HCEs are leaving (or fired - do not know yet). The only new hire is is from beginning of plan year and he is the spouse of the owner. Does not look like additional new employees to be hired for the next 6 to 12 months. Do I have a partial termination issue? Does it matter if the employees are terminating before or after 1000 hour accrual? Thank you

Any takers on this?

Yes, i/o 7/30/2020, it is 6/30/2020. I understand that you can use different definition for testing but how about 2 different plans by the same sponsor using 2 different compensation periods? Isn't this an issue for deductions? Anyway, I am having them amend the plan and match the cb plan. I love KISS method.

Hi Cannot think straight on this issue so need to ask. Sponsor FY is 7/1/2020 to 6/30/2021 and the DC+CB plans are the same period. Working with a DC person and set up a CB plan for 7/30/2020 year end and did not need to aggregate the plans for testing. For the 6/30/2020 year end, the compensation was FY of the corporation under the CB plan. It just worked. I just got a copy of the updated document for the DC plan (signed 12/1/2020) and noticed that the compensation is checked as calendar year ending within the FY. So I have 2 plans to test but 2 different compensation definitions. I must aggregate the plans for this year, do not have a choice. Any suggestions on what to do? I am trying to have them change the definition of compensation (may also need the HCE determination but this is another story). How can I test 2 different compensation definition? Thank you

Hi Newly established db plan 7/1/2020 to 6/30/2021. The owner's spouse was an employee in the past and part of a terminated db plan, 10+ years ago. I believe he may have been a part owner back then, no information on that. He has been working for the company but did not receive any salaries for the past 10 years. Does it matter if working less than 501 hours or even less than 1000 hours? They want to include him in the new plan and he will start taking salary as of 1/1/2021 i.e. mid year. Does the plan need a special eligibility amendment or he is assumed to have had employment for eligibility in the past? I believe yes. As he had nonforfeitable rights in the old db plan, if I understand correctly, rule of parity does not pay a role here?? Thank you

Hi all Have not done of these in a long time. Company started 3/1/2020 with FYE 12/31/2020 so in existence for 10 months in 2020. Want to set up a 401k/PS plan (no SH can be done for 2020 but can be done for 2021) My census Key-HCE1 - salary 285k HCE2 - salary 250k - can he be categorized as non-HCE for 2020 HCE3 - salary 200k - can he be categorized as non-HCE for 2020 Non-HCE - salary 50k What prorations are required between the salary, 401k deferral and profit sharing (ADP issues aside)? If need to prorate the salaries, what salaries do I need to use for ADP, 410(b) and 401(a)(4) purposes? If my memory serves me right, I can start the plan from 1/1/2020 i/o short year as well as the limitation year, correct? If this the case, do I need to prorate anything? Last, as the HCE's (assuming that the non key HCE cannot be categorized as non-HCE) will have enough of payroll to maximize the deferrals where the non-HCE will not, is this a BRF issue (again please ignore the ADP testing). Thank you and happy Thanksgiving.

Hi Bill The plan's effective date is prior to SS4 but execution date is after the TIN was obtained. It is not a concern to change the plan name, just seems odd. Take care and happy Thanksgiving

Yes they are but the fact that they obtained a TIN before plan was established,is that even valid? One can name the plan anything they want but still calling it a db plan when it is abc plan? Thank you for your input

Hi This is a new one for me. Did a proposal for CB plan however, they went ahead and obtained a TIN (already have an EIN) with the plan name XYZ DB Plan. Is the TIN valid? Still need to do the CB plan and would look funny with DB name. Please let me know your comments. Thank you

I actually read these articles before (thank you for reminding me). I will contact PBGC first and see if and when they will say anything. To be safe, already designed the plans assuming no coverage. As they are for 2021, have time to revisit the designs in PBGC covered. Will share with the board if and when I get any results and their demands to provide a determination.

If they have no requirement i.e. no hours, no last day rule, shouldn't you also check how the top heavy is determined i.e. if no last day rule (assuming it is a t/h plan)? I agree on the testing exclusions but no sure about the contribution requirement. Just curious.

Sorry, was typing very late and not thinking clearly. C.B. thank you for rewording it. Based on my understanding and recollection, indirectly means having some kind option to buy agreement. It is not a community property state. It is a sole-prop - not a professional service. So, are they covered by PBGC?

Thank you both

Thank you both

Agreed on not being able to pay the initial set up but not sure about the termination - need to check this again. But I agree that the termination fee which could be just for a simple resolution cannot be paid from plan assets however the amendments, distribution election forms could be, I think. Have not checked this in a long time. Once the assets are ratably allocated i.e. became profit sharing then the fees can be paid. It is over 7 years starting with the year of QRP transfer. Thank you both

Don't you need the amendment in place to provide the notice? Just curious.

Looking into setting up db plans for some financial planners for 2020. Does anyone have any experience on if and when they would be covered by PBGC? I am aware that I can ask PBGC pilot program but may not get a response in time. Thank you

To confirm, a brand new 401k plan with safe harbor provisions for 2021 has to be adopted by 12/31/2020??

Just curious about everyone's opinion, in what instances a db plan covering only spouses would be covered by PBGC? Thank you.

Curious about the following: Set up a PS plan as a qualified replacement plan (QRP) and billed the client. Excess assets from the DB now transferred to the QRP. Now QRP has only excess DB assets and no other PS contribution will be made for 2020. Client now wants to pay the document fee from the new PS plan assets, can they? Thank you

I believe it should be 11/30/2020.

2020 is out, nothing can be done. However make sure that they amend and execute the plan by 12/31/2020 for 2021 if they want to continue with the discretionary match and have last day rule and any other provisions. if the plan is not amended till 2021, 2021 will be out too.

Absolutely permissible.

Thank you all for your input and sound advice. Belgarath, 1.99 is very generous.