Jakyasar

Hi Asking for a friend. Existing 401k plan with SH and PS. PS allocation requirement is: Either employed on the last day or accrue 500 hours of service. Plan sponsor wants to exclude bonuses for 2024 for all purposes. Can it be done now or has to be tested for participant who fall on either allocation requirement? Thanks

Thank you

This is not a plan amendment, simply a terminated participant.

Hi A terminated DB plan participant has 6K coming to him. Current plan states 5k for immediate pay out. Under the law, one can increase the limit to 7K without an amendment so if this is true, can pay the participant without the spousal consent. This would be done after the participant terminated. What am I missing here? Something smells.

CuseFan They created both as they have transferred the assets without the trustee's knowledge as well as against the election forms signed by the participant. As for the 1099 issue, I believe there was a contract between the plan sponsor and the advisor, not fully informed but does not excuse what the advisor did, especially not contacting the plan sponsor/trustee and me. David Everything will documented with the plan sponsor/trustee. Thank you all for your input. Never a dull moment.

Actually the advisor in hot waters with this as I am also alerting his client the plan sponsor how the advisor screwed it up without consulting with me, all because he did not want to deal with 1099s. I am not taking any heat for this as I have providing all timely and in great detail. I am sure this is shocking to all. I am also leaning towards having the elections forms redone as long as the client agrees to pay for additional work.

I do not disagree with you but the issue is the election form would have been completed after all transactions took place. what if the participant refuses to redo? You cannot force them. May be I am overthinking this but not sure how the PBGC would react upon an audit.

Here is a new one. I have done many many PBGC terminations but never such a mess and screw up. PBGC termination with 20 participants. 10 chose rollover into the existing 401k plan and 10 wanted lump sum. Advisor was provided all necessary information to proceed with the distributions and the deadlines. Despite my constant reminders and follow ups: Not only the advisor did not do the distributions timely, the advisor, in order to avoid any 1099 responsibility, sent all the monies to the 401k plan without even discussing with me. Once the monies were transferred to the 401k plan and allocated to the participants accounts as rollover, in return, they were allowed to withdraw as lump sum from the 401k plan. Some of the participants who elected lump sum, decided to leave the monies in the 401k plan. How can this be corrected? Thanks

Hi Always aware of the options and always let the clients know. Thank you for your comments.

Oh yeah, will make sure none of that, thank you for your input

Hi I am 79% owner of a c-corp, other 21% owned by my siblings I am also a 100% owner of an LLC I am not a CG, correct? It is not relevant how the LLC is taxed. No ASG issues. Thanks

Hi Bill Good to hear from you. Thank you for your input. Agree that dad's partnership ownership never exceeds 50%.

Being paranoid here late at night. Joe owns ABC corp 100% One of the ABC employees is Joe's adult son, Harry in addition to many other employees. Joe and Harry started a partnership (LLC) in 2023 50/50 - no employees. LLC has nothing to do with ABC corp, no business transactions, no income exchange, no nothing. Do they have controlled group issues as they want to set up a DB plan for the LLC?

I would then say, they are overwriting the trustee duties which I am assuming here. In this case, I agree with all, take the money and run somewhere else in order avoid any taxation and many other issues that may arise since this is a DB plan subject to QJSA

Curious, is there no trustee, I mean how can they move the assets without anyone signing off to it? Am I missing something here?

Thank you all

Amendment is the only option as the participant is not responding so call is out. So, can they?

Hi Plan terminated 12/31/2023 with force out at $1,000 (i/o $5,000). No SECURE amendment was made to increase to $7,000. I was not an issue as the participant with 1.5k balance was eager to get the monies but now not returning the distribution paperwork. Can the plan be amended now to increase the force out to 5k so that this participant can get paid the lump sum? Thanks

A bit of update with real #s which came out better than expected. This is a 2023 run, FYI 415 limit at 12/31/2023 at age 26.5 approx 58k So with 330k salary at 31% total deduction, maximum that can be between DB and PS is 102k+ 58k is for DB and 44k for PS, better than 66k PS only 2024, adding 23k deferral, now over 125k Just wanted to share my findings BTW, used NRA 62 as 415 limits need to be observed especially with the short # of years that the DB might be around. Not bad for a 27 year old.

Having a discussion with someone about SSRA as testing age. I do not believe it can be used as it is not a uniform testing age and nowhere it says it is ok, at least from what I have been checking. Per EOB, non-discrimination answer book and other sources, if there is no uniformity then use 65, nowhere it said it is ok testing using SSRA ages. What say you?

Between a DB+401k deferral+6% of PS based on maximum salary and low NRA within 10 YOP may yield better results, did not yet do all the math. However, with prior service and big income, can possibly front load for a few years and then cut back.

Hi I am looking into a DB plan design for a professional boxer and researching what a reasonable NRA is for a new DB plan. Currently, age is mid 20s. I looked online and on average, it is age 37. Some retire in the 20s, early to late thirties. On very exceptional situations, past 40. So, using NRA of 35-37 seems reasonable with a 10 YOP for a DB plan. Apparently planning to retire within 5 to 7 years. Any comments?

Yes, for 2023 and they also refuse for 2024.

Thank you all for your input. Peter, availability is there from all professionals, just that the client does not want to do it, I am told. No one can force the client until IRS and DoL steps in and things get out of hand. I have never seen anything like this in all my years.

I think they want to get disqualified, thankfully not my client, asking for someone else.