Jakyasar

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.

Hi If the employer is refusing to make the 3% non-elective safe harbor, what is the penalty or other issues? Tx

5500EZ instructions state that for a family biz filing as an S-corp, a plan covering only family members, can file an EZ. Owner, spouse and their children.

Did some reading and looks like related organizations under 414b, limits of code section 404 would be aggregated on a combined basis. Apparently, if affiliated service group, they need to be treated as unrelated employers. How you allocate (for all adopting the plan) is a different story as still undefined. Still would love to hear any comments.

Hi Non PBGC covered combo plans Sponsored by a corporation with the employees and a sole-prop. Joe owns both entities. Needs to use 31% rule. Under the corporation satisfied the 31% rule. Under the sole-prop only deducting CB for Joe only. No DC deduction. If you combine them for total deduction, fails 31% rule. However, ss they are separately deducting the contributions, I think it is ok to test deductions separately. Am I wrong?

Hi Currently have a SIMPLE IRA. Wants to add a DB plan for 2024. I thought cannot do it, what am I missing?

If it is an S-corp, yes. If DB/CB plan, PBGC may come into play, depending on the biz.

Bri interesting point. Again, I have no idea as to why it was put it. It is not going to affect the PS allocation for 2023 and 2024 so we are good on that.

Thank you both for your comments

Believe me, I would never test this way nor add ERA to the DB plan. My problem is that this is a 2023 design so was curious on how the ERA in the DC would affect it. Looks like, if not included in the DB, no issue, all can be tested under NRA. I will advise the DC TPA to remove the ERA under the DC which has absolutely no benefit whatsoever, at least, not for this group of employees. However, removing ERA, would it not violate BRF issues? Just curious. Thanks for your input.

Hi This is a first for me. Looking into a proposal for DC/CB combo. DC plan already exists and has early retirement age (ERA) provisions NRA is 65/5 and date on which participant attains NRA ERA is age 59.5 and at least 6 years of service for vesting purposes (1000 hours) and on anniversary date with/next following satisfaction of ERA I am confused the way written as at least I would this the retirement date would need to be the same (again, no idea and/or experience) The above aside, for CB plan design, other than NRA being 65/5, do I need to include ERA in the CB plan and cross test as well or just 65/5 is sufficient? How is the testing done? Any comments/suggestions? Thanks

How is it going to be valued as of valuation date as it needs to be done so by an independent appraiser? 100% value has to be covered by a fidelity bond which is very expensive. This is an unqualified plan asset. What is going to happen when the plan is closed as the participant cannot own it? What are you going to do, roll over part of the horse into an IRA? How about the earnings from any kind races, stud fees, if at all, going to be allocated to the plan? Just a few thoughts on dealing with intangible assets. this is even tougher as it is partial. Do get an attorney for this, so many booboos can happen.

it is EZ even if one of the spouses did not have any ownership

Isn't the age 21 issue gone under SECURE effective 2024?

Any other comments?

Thank you for your s/h which is exactly what I have. You and me both not fans of insurance in pension plans.

Hi Did not have to deal with one these in years. A few situations cannot determine if calculations right/wrong for incidental maximums. Insurance is whole life so would apply 66.66% for 74-307 Plan NRA is 62 Participant was age 35 on 1/1/2021 - effective date of the plan. Total 27 YOP to NRA Participant got insurance effective 1/1/2023 at age 37. Total 25 YOP to NRA Participant average compensation is 20k/month - 415 lump sum at NRA 3M (made up) Benefit formula is 75% of average compensation i.e. projected benefit at NRA is 15k/month - PVAB at NRA based on plan AE assumption 2M (made up) 1. To determine 100X, one should use formula benefit at 15k/month so face amount maximum is 1.5M, correct? 2. To determine ILP theoretical contribution under 74-304, law requires participation years. The LRM language (where document reflects the same) is "using the individual level premium funding method from the age at which participation commenced to NRA". 3. Based on literal reading of the law, for 74-307, I need to calculate starting from age 35 i.e. 27 YOP, correct? 4. For 74-307, the lump sum I have to use is the 2M figure (not the 415 figure), correct? Thank you