Nate S

To my knowledge, the only caveat that a foreign entity has to overcome is the placement of a "United States Person" (United States citizens (including minor children); United States residents; entities, including but not limited to, corporations, partnerships, or limited liability companies created or organized in the United States or under the laws of the United States; and trusts or estates formed under the laws of the United States.) as the Trustee. Otherwise, the foreign government may be better suited setting up a US corporation to run this sector of their operations. Think along the lines of a state-sponsored university setting up a corporation to manage their campus food and custodial operations. Even then it remains a governmental plan and can enjoy certain freedoms from ERISA.

Did you try testing again? $900 seems like a low hurdle... Do you have room to shift? Is it current year testing and an additional QNEC would be simpler to manage? Do you have excluded compensation items and a safe harbor definition or gross 415 compensation will lower the HCE rate? Did you use statutory exclusions and check the alternate entry dates allowable?

An ESOP has a standard distribution policy, 5-year wait, payment thereafter in 5 equal installments (no acceleration below $5K, no segregation of stock accounts, fees fully paid by the Sponsor). Last year the installments were incorrectly counted and participants who should have received their 4th installment (i.e. 50% of the available balance), their payment was calculated based upon a 3rd installment and received only 33% of the available balance. While this may be an operational failure for not following the terms of the document, is there a correction to be made? If future company stock gains are neutral or positive, I don't see that the participants were disadvantaged in any way that would produce a basis for a correction. What about a participant who was due their 5th installment(100%) but only received 50% of their available balance and now will need an additional distribution? Are they harmed vs a comparison to the broader stock indexes? How should future installment amounts be calculated, does the missed amount all get made-up in the next payment, or are they calculated normally based on the remaining periods?

TH is a +/- determination, there are no shades of top-heavy. If your most conservative take still leaves you well on the not side, then so be it. If it eventually does shift to the bad side, or shows signs of being sensitive enough to flip from one year to the next, then convince the client to spend the fees for some corporate governance legal consulting. Otherwise, you've put too much time and worry into something that isn't an issue.

Voting power of the Board/ESOP committee members cannot be ignored if the corporate bylaws or ESOT agreement grant them the ability to influence the Trustee, or if it is a Directed Trustee. Warrants/Grants/Options must also be reviewed if there is outstanding treasury stock. SAR's, Phantom Stock, and other forms of synthetic equity may also create effective ownership.

Given the short time-frame between year-end and the declaration date, I smell sour grapes. No need for fancy gymnastics, tell them ERISA and the Plan must be blind to outside malfeasance, even where there is civil/criminal activity, the allocation would first have to be made, then you can try to recover it. Otherwise, have the employer resolve to make a discriminatory allocation, as long as it meets safe-harbor and/or top heavy minimum. Then correct with 11g to avoid the undesired employee as much as possible.

The best way I get a client to determine "officer" status is to identify those executives who have the authority and capacity to enter into agreements that can change the course of the company or the way they do business. This can take the form of: -strategic partnerships or acquisitions -establish or close divisions/plants/operational groups -sales/services that would engage X% of capacity, or are worth $X Corporate officer designations can be a trap if the Secretary is little more than the CEO's admin. Likewise CFO/Controller/Treasurer are fraught because checkbook power doesn't equal contract authority. But maybe the in-house attorney? Inclusion of the ESOP Board members will depend upon the ESOP agreements and corporate bylaws regarding voting power. Yes, 14 members of a 100% ESOP would each have more than 5% voting power, no wage test necessary. Are all Board members also employees? What voting power do they actually possess? Does the Trustee actually vote the ESOP shares? Does the Board direct how the Trustee votes? The three Key employee tests are not the simple thresholds that the HCE hurdles are.

If a sole-prop, so that deferrals can be elected with 100% hindsight, if turnover is variable then you could have differing benefitting each year such that an older nhce may throw off 401a4 one year. Especially handy in rural areas where rehires can be repeated and often.

Don't fret yet, wait to see if any penalty notice is generated, then submit proof of timely 5558 filing and 5500 acknowledgement repeatedly until IRS catches on and drops the issue. I've spent up to 2 years filing monthly replies till their chandelier was fully lit.....

I wonder if they aren't trying to make the now obsolete point that if one doesn't wish to contribute and is able to elect a $0 allocation, then the Plan allocations are all impermissible CODA's. Aside from a deferral election and resultant safe harbor if any, and top heavy if to all employees, any discretionary allocation needs to be the election of the Employer. Doesn't matter if its a partnership, sole-prop, LLC, or fully incorporated entity, it has to read as an entity decision which a resolution helps codify.

Yes, they are credited service for their service to their self-employed entity, or for performing the business of business. Just because they didn't contract out doesn't mean that their entity didn't require maintenance or that they didn't work to market themselves for contract. Even if they did absolutely nothing and put zeroes across the board on their Sch C, they still had service by preparing and filing the prior year's Sch C.

The best part about agents/advisors is that to them you are a math wizard and make calculations that they can't begin to comprehend!! If you want to use 12/31 actual, go ahead, then stick in the development of the future premiums to satisfy the agent, and finally build-out an offset to take the whole system back to the 12 actual that you want to use in the first place. 3-card Monte with math!

Yes and Yes. For self-employment, deferral deposits are allowed throughout the year on a performed service basis; but the end of year, total year basis determination of compensation is applied for all other purposes.

Reminder, shifting no longer requires passing before, only after the shift. Go for it!

Lol, they're getting their tax info together and saw it on their w-2! They had an effective date option and didn't use it, nor did they miss the monies originally, so not sure that they've been harmed in any manner. The Plan doesn't seem to have done anything wrong, the ppt can elect to change their future deferrals to make it up or not.

Test it as hard as you can first, then issue refunds once you're out of testing options and have your best results. If the Plan previously passed, and the eligibility change is what's mostly affecting this year, then you can likely get a passing test again.

I agree that you'll need to accept the repayment as part of the merger resolution/amendment; otherwise the spin-off clearly harms the affected participant(s) by reducing their available benefit. However, I do not see that you need to explicitly add QBADs to the Plan otherwise, even if the adoption agreement format checklist is structured to do so. This would be a minor modification to a cycle 3 document, at worst you may want to add it to the administrative procedures checklist or the special effective dates section and clearly limit the fact that you are only accepting repayments.

How do you as the actuary define the MRC? Whether you treat them as receivable or discounted-paid is going to have a negligible effect, but if you're concerned then take the more conservative result and stick to it. The insurance agent doesn't have a stake here, and it sounds like the client will recognize 12 months premiums for deductibility regardless.

ASAP. The EBSA manually reviews all filings with attachments for confidential information within a few days of the filing.

Without the SB you run the risk of having the filing disallowed and incurring late filing penalties. Once amended to include, you're all set!

In. From the eligible employee definition of 1.401(k): Finally, an employee does not fail to be treated as an eligible employee merely because the employee may receive no additional annual additions because of section 415(c)(1).

As long as the forfeiture amount in question was a current amount, meaning it had been generated during the 2022 Plan year, go ahead. If it is monies that have been hanging around and should have been used in a prior year, I would allocate it to B participants in conjunction with the merger's preservation of benefits.

It counts in the ADP regardless and in 415(c) only if not timely corrected by 4/15. I guess it would then be part of the ABPT too, but I fail to see how you could include it in 401(a)(4).

Go to your nearest pay phone, make a collect call to the employer, ask if they distributed the spd and/or had any employee return a deferral election. If no, proceed with operation sweep it under the rug. If yes, consider appropriate late deferral correction. Also have them consider a minimal (1%, $1000, one share of Twitter each???) non-elective for 2022.

Does the document say that it does?