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Good morning to all, We have a takeover case in which we want to be sure we correctly identify the Key employees. We are not sure because we do not know anything about trusts. I know the following is convoluted but I am not making this stuff up! The company was started by two brothers, who we will call Bill and Sam. Bill is the president of the company, and Sam has passed away. The ownership of the shares of the company are as follows: 24.7% belongs to a Q-TIP trust for the wife of Sam who is not an employee. We aren't worried about this. 41.1% belongs to Bill. That's a no-brainer. He's an owner and President of the company. Key and HCE. Bill's 3 kids are on the payroll. One of them owns 0.8% of the stock outright. Another 15.9% of the stock is in a trust for Bill's 3 kids, who are treated equally under the trust. To our knowledge, the trust and the percentages are irrelevant here. The fact that the kids are on the payroll and their father owns 41.1% of the stock is sufficient to make all of them Keys and HCEs. Now comes the part we are not sure about. Sam, remember, is deceased. Sam's 4 kids are on the payroll too. One of Sam's kids owns 1.6% of the company outright. Then, as in the case of Bill's kids, 15.9% of the stock of the company is in a trust for these 4 kids and they share equally in it. So one son has his own 1.6% that he owns outright plus 3.98% that he indirectly owns through the trust for a total of 5.58% of the stock being for his benefit. His 3 siblings just have the 3.98% each that they own indirectly through the trust. Are Sam's kids Key and HCE or not? We don't know what impact the trust has on making this determination. Our suspicion is that maybe the son who has the total of 5.58% is a Key and maybe the siblings who only have 3.98% are not, because they have less than 5%? We'd much rather hear what the experts have to say than just go on our suspicions. None of these children, neither Bill's nor Sam's, has a sufficiently high salary to be considered an HCE just on that basis. None is an officer of the company with a sufficiently high salary to be considered a Key just on that basis. It's all about the stock. Your advice will be greatly appreciated.

Greetings friends! I have a question regarding the attribution from a grantor trust to the beneficiaries of the Trust. The EOB says that if a trust has an ownership interest in another organization, that interest is attributed to the beneficiaries in the trust who have a 5% or more actuarial interest in the trust, in proportion to each beneficiary's actuarial interest. What is actuarial interest and how is it determined? I found in S. Derrin Watson's Who's the Employer Q&A column, question 167- https://benefitslink.com/cgi-bin/qa.cgi?db=qa_who_is_employer&n=167, that it is determined according to IRS actuarial tables, but what table and how? Any help would be appreciated!! Thanks in advance!

Is a Form 5310-A (or any other special filing) necessary for the division of a master trust into separate trusts for the constituent plans?