Jakyasar

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.

Follow up I just received some additional census information going back to 2015 and there are quite a few active employees without any benefits. I do not know if any 401a26 testing was done. As a reminder, non-PBGC, overfunded and top heavy so it has to be tested each year. I have no information for at least 5 to 6 years of the plan but 100% certain that they needed to be tested not a census information. I am doubtful that any termination calculation is going to be correct. Any suggestions on what to do here other than do not take over? i just cannot ignore the 401a26 issue which may need to be tested for the past 10 years. Thank you

Looking at a combo plan design for someone and also having a brain freeze for a change. 3% non-elective SH + PS. Gateway determine at 7.5% DC plan eligibility is 6 months with the following month as the entry date for all sources. PS is 1000+ hours and last day rule. Allocation method is each participant is their own group. I see a terminated employee with DOH 1/1/2020, enters the DC plan on 7/1/2020 and terminates 8/1/2020. They worked over 1000 hrs. They get the SH but they also need to get the 4.5% PS allocation for gateway, correct? The software is forcing it to be provided. The plan will not pass otherwise excludible testing. Thank you

Effen, I am aware of the 401a26 issues, do not even know if ever tested. It fails all 3 conditions but my understanding is that there were no paid out participants so kind of ok with the prior benefit structure test. Thank you for your other points but still not sure how to test without some salary history unless the amendment/allocation method is some kind non salary related benefit, like a dollar amount per YOS that would be a safe harbor (no more than 5 past YOS) method that would not require testing.

Follow up question regarding the allocation of the excess to the plan participants. As all my plans have QRP provisions, this is kind of a bit new to me without having a complete set of information. i am asking the following for my own curiosity as I will most likely not take over the plan. Just found out that the plan was frozen back in 2009 with very small AB's. No back up is available. it was a hard freeze, from what I see. I do not have the proper salary history to determine the average compensation history. But given current salaries for the employees, it is not an unattainable scenario to achieve these very small benefits. So let's assume they are correct. As the salary history is not available to generate an average compensation schedule, can any of the following techniques can be used to increase the benefits using current salaries? 1- Create a 1% formula based on 2020 salaries and allocate according to the benefits created on a pro-rata basis? 2- Create the PVAB's based on the know AB's and allocate accordingly on a pro-rata basis? If doable, should the PVAB's be determined based on plan AE or 417(e)? Any other suggestions? Thank you

Forgot about the 5 year rule, thank you reminding. As to how to allocate, yes, I believe you can amend and then freeze again, as long as all non discrimination rules are met.

Hi I was approached to do a termination for an overfunded db plan (non PBGC).. Unfortunately, the provisions require that the excess to be distributed to the participants (always a bad choice, at least in my opinion). To confirm my understanding, this is a protected provision and cannot be amended to "revert to company" prior to termination date. The idea is to transfer the excess to a QRP. Also, there are 2 terminated participants. If the excess distributed to the participants, do the terminees get additional allocation? Assume no 415 issues. Thank you for your comments.

Also, if Bob and Betty have any minor children i.e. under 21, they can be controlled group as well.

Do you agree that if not amended by 12/31/2020, it is 4% for entire 2021?

Hi A PS plan in existence as of 1/1/2020. Adding a 401k provision now. Can they add non-elective SH for 2020? I do not believe so as the 401k feature was not in existence for 3 months? Just checking. Thank you

Hi If the plan adopts the 2020 non-elective SH between 12/1 and 12/31/2020 i.e. 4%, what needs to be done/when to switch to 3% for 2021? Thank you

Hi All A follow up question. Are they also key for 2020? Thank you

Ken My scenario is where I would set up the SH as of 12/31/2020 effective 1/1/2021 with a may be notice and this is why I wanted to confirm that a SH notice had to be provided. So if they start the SH on 1/1/2021, the may be notice would allow all these contributions to be categorized as SH and if later they want to stop, they can do so. Am I correct on this assumption? Thanks

Bill, thank you Andrew, I agree with you Thank you both

Hi With all the changes going on, want to confirm the following just to be on the safe side: If a new plan for 2021 with SH provisions, has to be set up by 12/31/2020, correct? If a new plan but no SH provisions, can still add SH for 2021 by December 1, 2021, correct? Last, for a non-elective SH, unless I want to have a "may be" provision, no need for a notice, correct? What is the HCE's are excluded from SH, is not providing a notice still an option? Thank you