Jakyasar

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.

Ok, let me rephrase this as may not have been clear (sorry, a little less brain activity at this time of year). The 5500-EZ has been filed with all zeros even though the assets (annuities plus cv's exceed 250k for the past many years). I was told that, for 412e3 plans, the 5500EZ is not required to provide assets, jt needs to be filed. I could not find anything to back this up. Hope all I was clearer this time.

Assuming assets exceed 250k, you need file though, did you see something else?

Hi I have not worked on these plans well over 10 years. Looking at a 5500-EZ that has been filed with no assets for many years. I was told that, technically these plans are not required to reflect assets, at least on 5500-EZ i.e. ok to file them blank. I checked the 2023 EZ instructions and unless I missed it, did not find anything backing this up. One set of instructions I found stated the do not need to file EZ unless assets are over 250k. Am I missing anything on this? Thanks

Hi I usually manage to file 5500 forms for late adopters but there is one, could not do it. So, for 2024, when filing the 5500 forms, I know I need to attach a copy of the 2023 SB. A few things I am not clear about: 1. How do I attach a second SB? My program has a specific SB attachment option with additional sub-attachments for the SB attachments. If I do that, no issue 2. If above is not the right way then I need to attach under "other" option but with this option, I will not have sub-attachment options for SB which means all attachments have to go under "other". Any suggestions? Thanks

Good idea but not an option. so looks like stuck with 2022 415 limit, right?

No late retirement.

Plan freeze is on 5/1/22 so at least the 2022 dollar limit. Need to have the 2023 limit though but still not sure

Having a slow brain day for a change. Fiscal plan 5/1/22 to 4/30/23. Limitation year is plan year. 2022 415 limit 245k, 2023 415 limit 265k Froze the plan 5/1/22. What is the frozen 415 limit?

Hi Plan sponsor is an s-corp. It is a CG with a sole-prop i.e. adopting employer. No 5558 (first year of the plan, late adopter (put aside that they do not need to file) but curious. For automatic extension purposes, plan sponsor deadline is the determining factor i.e. 9/16 because it is an s-corp and cannot rely on sole-prop extended deadline of 10/15. Right?

CuseFan, I agree with you. They would take separate deductions, just that there was an issue with banking and making the deposit from sole-prop and that is why sole-prop wanted to give the corp the monies and corp making the deposit. Makes no sense but I am curious if anyone has seen done this way.

I agree but I am curious if anyone had this issue.

Hi Joe owns 100% of corporation and 100% sole-prop - separate lines of bizs with separate income sources. Corporation has employees and sole-prop does not. Both entities adopted the plan Joe's 2023 DB contribution is 200k split 50/50 between the 2 entities (his w2 from corporation was 165k and had 500k net c from sole-prop so 50/50 of the 401a17 limit). Joe asked if he could pay the full 200k from the corporation which was not the original agreement. Joe also asked if he could transfer 100k from sole-prop to the corporation and have the corporation put in the 200k but still deduct separately from each entity. Any thoughts/comments?

CuseFan, how many times the clients told us that "oh by the way I have a SEP that I funded" after adopting the DB plan?

Hi Another new one for me (usually had multiple schedule c's with 100% ownership) Joe owns ABC LLP 50/50 with his son - no other employees. K-1 income was $250,000 for each partner. Joe owns 3 other partnerships, 50% each and other 50% is unrelated. 2 partnerships had $50,000 k-1 losses each for Joe and 1 partnership has $25,000 of k-1 income for Joe. If want to set up a DB plan for ABC LLP, what is the K-1 I can use? Thank you for your comments.

The fact that they were CG back in 2015-2017 has no effect on what you are saying i.e. as only ABC is still in existence, you can only use ABC?

I wanted to follow up on this and see if anyone has come across something similar.

Hi Facts: Company ABC owned over 80% (but not 100%) by Joe and sponsors DB plan (started 2021) Company XYZ was owned by Joe 60% but sold in 2020 (i.e. not in existence when the plan has started) In each case, the remaining ownerships were unrelated. Joe has 125k average salary since 2021 paid from Company ABC that is used for DB plan purposes. Going back to years 2015/2016/2017 (*prior to plan inception), Joe had 150k salary each from Company ABC and Company XYZ i.e. 300k in total/per year. To determine Joe's 415 lump sum for 2024, what is Joe's salary? Assuming that you can use the 300k average (obviously limiting to 401(a)(17)), can you point to a code section to back this up or a starting point? Thank you

Hi all All comments are appreciated and will pass along to my friend.

Bri, not understanding what you are saying. My question is simply, can the definition of compensation be changed now without any 411d6 issue, gateway otherwise, given the allocation requirement.

PS is everyone in their own group and yes amending will change as high payroll, high gateway 414(s) is not tested yet but from what I preliminarily calculated, right on the edge with the informal IRS mentioned 3% cushion