SFlannery-Nova

Thanks Draper and CB - Yes, there was one non-owner participant who terminated (with a vested benefit) in a prior year (before 2021) and was paid out in 2021. So once this participant was paid out, the plan only covered the 100% owner. The non-owner terminated vested participant will not receive an employer allocation in the 401k PS for 2021. Agree, absent clear guidance to the contrary, the "safest" approach seems to be limit the ER contribution to 6% on the DC side for the 2021 plan year.

Interesting, thanks for the cite. We recently received a coverage determination letter and the PBGC indicated the client could request a refund for a portion of the premiums. This would contradict the information from the instructions.

If coverage ceases mid-year can't you request a refund of a pro-rated portion o the premium for the part of the year during which the Plan was not covered?

A Plan Sponsor sponsors both a DC and CB plan and as of 1/1/2021 the CB Plan is PBGC-covered. As of 1/1/2021 there are two participants, the business owner and one other participant. The other participant is paid out during 2021 and a PBGC coverage determination filing is made. The PBGC determines that as of 10/1/2021 the CB Plan is no longer covered. As a result, does the combined deduction limit (the 31% limit is not really practical for this plan, so it would be the CB contribution + 6% on the DC side) apply for 2021?