Jakyasar

Is this a terminated non-owner participant who attained the RMD age? If an active participant, what does the document say about non-owners getting RMD's? They can be possibly deferred and getting AE increase, all depends what the document says.

Fantastic and thank you

thank you for this not clear on the testing part - multiple HCE issue is another story but I am trying to understand for 1 HCE Say 1 HCE and 1 NHCE HCE will do 5% plus 7.5k NHCE will do nothing. My understanding 5k deferral is fine and recharacterize 7.5k as catch up, correct?

As not being a 401k person, have a question for the gurus out there. First year of the plan. HCE's will be limited to 5% and prior year testing. HCE salary is 100k so max 5% is 5k HCE is over 50, can they do additional 7.5k of catch-up and still pass ADP? Thanks

Follow up questions, say after year 7 is allocated, there are still monies left that cannot be allocated due to 415 limits. Let's say 100k is left. Q1. When is the 100k to be reverted back to the corporation? assume first year was 2020 and the 7th year is 2026. The way I see, revert to the corporation in 2027 after 2026 allocation is completed thus taxable in 2027? Q2. Taxation, 100k is added to the corporate income for 2027 (assuming above is correct). Corporation pays the 20% reversion as well, in addition to the income tax. What form is used for the reversion taxation? Bonus question: Q3. Let's say 500k (100% of the excess) was transferred to QRP and 100k was allocated every year and the return on investments were 100k every year so after 7 years still 500k is left in the QRP account (almost a true story). Any issues other than the taxation? Thanks

any takers?

That is not up to me unfortunately but I am still not sure about the amounts to use as asked.

HCE deferred 35k during 2024 (over 50) thus exceeded the 402g limit by 4.5k The refund will be done prior to 3/15/2025 - does it make a difference if needs to be refunded prior to 12/31/2024? For 410b, which amount should be used? For 415(c) limit for PS purposes, is it safe to assume 69k-23k i.e. 46k allocation? The refunds will be made, that is not something to worry about. Thanks

Hi DC plan sponsored by ABC, Inc owned by Joe. XYZ Inc is also owned by Joe but no employees. Joe apparently took salary under XYZ Inc for 2023 and applied for pension purposes. Joe now decided to let the TPA know this happened and wants TPA to have XYZ adopt the plan as well so that can continue having both firms within the plan. Can the effective date of adoption be 1/1/2023 for XYZ Inc? Is this correctible under self-correction? Thank you

Much appreciated, thank you

Hi Sorry if this was discussed before. Not a 401k person. I want to make sure I understand this correctly. Client is 75 years old. Because not between ages 60-63, cannot have enhanced catch up, correct?

Thank you for confirming my suspicion on being ZZZ rule. Thank you for the cite as well. Thank you also for bonus ACP note. However, I think they will need a notice especially if amending for the first year.

Hi Question for 401k gurus out there. Not a 401k person. Existing plan with 401k/SH/PS provisions. Called the "no name disclosed" payroll/RK company on behalf of a prospective client that I am designing a CB plan. Let's call them ZZZ Asked ZZZ to amend the plan's SH provision from basic safe harbor to 3% non-elective effective 1/1/2025. I was told by ZZZ that there is a 45 day rule prior to year end to change the SH, is this true? If true, can you please provide a cite? As a signed note, ZZZ told me that the same 45 day rule may apply to amend the PS provisions as the plan has SH in it (PS has last day rule) which I said, I do not think so. Am I missing something here? Thanks

Peter thank you.

Under SECURE, sole-prop can adopt a 401k plan after year end and prior to 4/15 (as far as I know, no extension in filing allowed) How about changing deferrals for an existing plan? Do they need to be done by 12/31 or can be done by 4/15 following? Thanks

I think IRS allowed it because the account balance does not go down (referring only to fixed rate) and they did not calculate how it would affect the monthly accrued benefit itself, just thinking out loud. Non pro-rata is in various documents that I have seen so it is valid and kosher, at least per IRS pre-approved documents. Different actuaries may have different opinions but as long as the document provisions are followed and applied, that is life, fair or not. Thank you all for chiming in for the 411d6 issue

Neither, looking to amend the plan effective 1/1/2025 and switch to no pro-rata

Truphao, I understand your position but it is approved by the IRS i.e. in the plan document as pre-approved. This is a different discussion though. Thank you both for your comments.

Hi Looking at a take over. Interest crediting period is determined on a pro rata basis upon termination. If I want to amend it to zero i.e. no adjustment until year, is this 411d6 issue? Thanks

Hi Sponsor has an existing 401k plan. Wants to add a PS plan - separate plan. Can the new plan exclude service for vesting purposes? Never had a plan terminated in the past 5 years.

Hi Looking at a possible take over for DB/DC combo DB has a safe harbor integrated formula but does not pass ratio test on its own (not sure about ABPT as I am not yet provided the testing. Top heavy provided under DB plan. DC has deferral and 3% NESH and passes 410b ratio test. No PS allocation. If both plans need to be aggregated for 410b testing, do they need to be tested for 401a4?

Good point but checking a takeover in this situation and correcting what prior TPA did. Also may not always be a cost effective way to approach.

Agree with both, thank you for confirming.

Plan in existence for 10+ years. Initially only has 401k+SH 2020 added PS subject to 2/20 vesting. Can service prior to 1/1/2020 be excluded for vesting service for PS portion?

412e3 plans (small plans), assuming done properly and have no separate top heavy funding issues and also no investments other than annuities and insurance, are not required to provide schedule sb. PBGC is a separate issue.