metsfan026

I just wanted to double-check if this would be considered a controlled group or not: Company A - Husband owns 100% Company B - Wife owns 100% The two business, while in the same industry, are completely unrelated and the spouses do not work or do business with each other. So would this be a controlled group through attribution or are they excluded?

Yes, it's a controlled group. Husband owns 100% of Company A and Wife owns 100% of Company B

This may be more of an accountant question, but I'm not sure the answer. We have one plan that was adopted by two employers (one employer is owned by the husband, the other by his wife). When it comes time to fund the contributions, do they need to be funded by each employer or can one employer fund the entire contribution (including the other employees)? In other words: Employer A - 5 eligible employees Employer B - 5 eligible employees Does Employer B have to fund the portion of the contributions for their employees or can Employer A contribute (and deduct) the entire amount?

I've already instructed them that moving forward all payments have to be made from Plan Assets. The issue I'm running into is for '21, where they paid the premiums outside of the Plan. Is it possible to chalk it up to an administrative error and have the Plan reimburse for these payments (and carry them as a liability for one year)? That way there is no deduction taken for the payments and it's as if the Plan had paid them? That's what would be simplest, if it's allowed.

Understood, so what is the fix since the premiums were paid outside of the plan. With the Cash Balance Plan also in place, the premiums are greater than the 6%. What's the way to correct the issue?

Thanks everyone! Do you happen to know what the cost is to file with Puerto Rico? The information I've found are all in Spanish. Thanks!

So this is a new situation for me. We have a client who terminated a long-time employee in '22 for embezzling money from the company. Technically the participant is eligible for a contribution in '21. My understanding is that, regardless of the reason for termination the participant is still required to make a contribution for them. I just wanted to confirm that's accurate? Also, is there anything that the employer can do in terms of withholding the Profit Sharing account to recoup the money that was stolen? I know that's more of a legal question, but I wasn't sure if anyone knew. Thanks everyone!

Sorry, that was a typo! If the mom is an owner, but draws no salary it doesn't matter correct? The child would still have to be considered an HCE based on mom's ownership, correct?

We have a potential new client where: Grandma owns 47% Mom owns 47% Third party owns the remaining 16% If they were to hire one of the grandkids, technically they wouldn't be considered an HCE based on attribution correct? My understanding was that ownership transfer from grandkid to grandparent, but not the other way. And since mom only owns 47% there isn't an issue. I just wanted to confirm I was correct. Thanks!

Thanks everyone! Does anyone know what the cost is to do the registration through Puerto Rico (obviously there will be additional fees for the administration/filings), but the client is considering it and asking what the costs would be. Thanks in advance!

Does anyone know what's involved in getting a plan to become a dual-qualified plan so a person who lives in Puerto Rico could be eligible? Are there forms/fees involved in completing the process? It's something I've never done and I have a client that's looking to hire a Puerto Rican citizen and wants them to be able to participate. Thanks in advance!

I just wanted to make sure I was correct. Cash Balance Plan is terminating as of July 31, 2022. In order to calculate the 2022 requirement, they can maintain the 1,000 hour requirement correct?

I have a client who is terminating their Cash Balance Plan and wants to make their 2022 contributions based on the short plan year, so they can get the money paid out before the end of the year. Have the '22 segment rates been released as of yet? If not, is it OK to use the '21 rates? Thanks!

The problem is that the premiums weren't paid from within the Plan. The Plan isn't allowed to reimburse them and then make additional contributions? Any suggestions on how we solve the issue where premiums paid are in excess of the allowed Profit Sharing contributions for the year?

I'm taking over a client where there are two life insurance policies owned as Plan assets. Here is the issue, the premiums were paid outside of Plan assets. Normally we would use those payments as part of the contributions for the year, but the issue is that the premiums are actually in excess of the allowed contribution (plus the client also made an additional contribution in '22 for the '21 plan year). Would there be an issue in having the fund reimburse the owners who made the premium payments from outside the Plan? That way the premiums were paid by the Plan and the additional contribution could be made? I just wanted to make sure that this wouldn't create additional issues. Thanks in advance!

That's definitely not an issue here. So since it's a straight Profit Sharing Plan, technically it's not subject to QJSA and therefore it's not necessary. Is there a reason why they would want to maintain requiring spousal consent? Some members are pushing for the Trustees to remove that requirement.

That's what I meant. It's a Plan Document thing that the Plan can opt to remove

If a participant wants to take a distribution (either in-service or termination), is it an IRS requirement to get spousal consent or is it at the Plan's discretion?

I'm not pointing fingers, so hopefully it didn't come off like that. If they opt to return the money, do they have to make them whole for any investment loses?

I have a potential client who is having issues with 2021/2022 contributions. It appears that the prior TPA allowed ineligible participants to defer into the Plan. What is the normal procedure in this case? If the money is returned, does the employer have to make the employees whole if the investments are down?

I have a Cash Balance Plan that is about to terminate. The question is, which participants become 100% vested at termination? Obviously anyone who is currently active in the Plan becomes 100%. What about terminated, non-vested participants who have had less than a 5-year break in service (there are former employees who have anywhere from a 1-4 year break, but are not actively working)?

Does anyone have a sample 204(h) notice? I have a Cash Balance Plan terminating, so it is required to be sent 15 days prior to termination correct? Thanks in advance!

That's what I thought. Would there be an issue amending the plan, eliminating the benefit for the two owners but maintaining the contribution for the rank & file?

If a client opts to terminate their Cash Balance Plan prior to the end of '22, due to selling the business, is their a contribution obligation for '22? Just want to confirm so the client knows what to expect prior to termination. Thanks in advance!

That's what I thought, just wanted to confirm. Thanks!