Jakyasar

Revisiting BRF issue with insurance as trying to find a safe way to have insurance for all without violating BRF issues: Revised plan approach Combo DB/DC DB will be integrated safe harbor formula DB will have insurance for all participating DC will be group based and will cover all including the owner – not a uniform/safe harbor formula All will be eligible for insurance ------------------- Q1: Is the above ok for BRF? Q2: Is the above ok if the DB has excluded employees but all covered under DC? Q3: If under the DC plan, the rank&file opts out of insurance and provides this election in writing, is this ok for a free pass under BRF? What if they are also excluded under the DB plan? Q4: If the rank&file is not insurable, is this a free pass on BRF? Thank you for your comments

This is not a SARSEP (5305-A-SEP -I agree no qualified plan can co-exist) nor a traditional IRA (5305-AI do not see where a qualified plan cannot exist), just a SEP account that is subject to 25% deduction rules. I must admit, I do not see (possibly missing) where it says you cannot have SEP and a DB plan together. Could you please point out? As far as I knew, as long as the deduction limits are calculated properly, no issue. I have not had one of these in many years, so possibly overlooking something. Regards

Good morning Would like to check/confirm the following: Client wants to start a DB plan for 2019. Informs me that put away 20k in a SEP already. This is already in excess of 6% projected 2019 salary (non-PBGC - one lifer) Under deductions rules, 31% application, max 2019 deduction is 50k (based on current comp - will not increase). SEP was 20k and DB deduction cannot exceed 30k. if opnly SEP, max deduction is approx. 40k. Q1: Cannot take back the SEP, correct? If not, how can it be done? Q2: If a DB plan required 100k of contribution and only 30k is deductible for 2019 (as per above), assuming that there will be room for 2020, can the remaining 70k deduction be applied towards 2020, in addition to the 2020 100k DB deduction i.e. 2020 total deduction can be 170k? Or, DB plan design for 2019 should have no more than 30k of required contribution? Client wants 100k each year and start in 2019. Thank you for your comments.

Good evening: Not sure the following is right and/or passes BRF. A floor offset plan - assume 401a26 passes. After all offset are applied, only the owner has a substantial benefit in the DB plan. Only the owner is HCE. So far so good. Now the agent wants to provide insurance to the owner under the DB plan, thinking since no one has any benefits and plan passes 401a26, kosher, right? Also, they do not think that they need to provide any insurance under the DC plan. I am not in agreement for the following reasons (the ones that come to mind - possibly missed a few): 1- Any insurance provided to the rank&file (or NHCE) under the DC plan is not of the same value as the one provided to the owner under the DB plan; 2- For any insurance provided to the rank&file under the DC, the premiums have to be paid thru their benefit i.e. the contributions provided to them by the employer where in the DB plan, only the employer pays as contribution to the plan and does not reduce any benefits; 3- There is BRF issues for DB and combined plans. 4- As per some prior information I heard, even if the DB plan provided a benefit to the rank&file employees (say 2% and the owner gets 10% of pay), the insurance provided is not of equal value (even if calculated the same way, say 50X) due to the discriminatory type of benefit formula. The DC portion would not make it equal due to the reasoning I provided on item 2 above. 5- How is 410b satisfied? Please let me know your thoughts/comments on this and if I missed anything and/or misunderstood. Thank you

Hi all Sponsor wants to terminate the services of the vendor (or provider/platform) and wants to move another one. By mistake, tells them to terminate the plan i/o telling them that their services are terminated and assets to be transferred to another vendor (not well informed nor was contacted by anyone - you get you pay for). Vendor terminated the plan in April 2019 but assets still not distributed - I believe the sponsor signed a resolution for the plan termination rather than contract termination. Can the sponsor still undo the termination with no issues as to the continuance of the plan? It is a 1 year old plan. any other corrective measures that will be required? No idea about what happened to the deferrals, just finding out the facts. Vendor also tells the client, even if they move the assets to another vendor/platform, they will get a 1099R?? How is this possible there is no distribution? Your comments are appreciated as well as any insights. Thank you

Thank you for your replies. I am assuming that item 3 is 3% and not 2%, correct? If they want to stay with the SH match where the top heavy is automatically satisfied, because of the combo plans, excluding them from the DB plan will still require the participants to get at least 3% (plus whatever is necessary for the gateway), correct? The way i see this, there is absolutely no advantage staying with the SH match, if any. Thank you again for your comments.

Never dealt with the following as always use 3% non-elective SH. Existing DC plan with 401k+ADP safe harbor match+PS options (no ps contributions ever made) 10 eligible, only 4 deferring thus only 4 getting SH. Passes top heavy on its own. Want to add a DB plan and need to combine for all testing and top heavy. If a participant is in both plans and not getting any allocation under the DC plan because not referring, how is the top heavy allocation determined? If a participant is excluded from the DB plan and also not getting a SH because not deferring, how is the top heavy allocation determined? Thank you for your input.