Client maintains a safe harbor 401(k) for 2017. His spouse has a separate business. She wants to maximize in a plan. They don't participate in each other's business in any way. The spouse hasn't opened her SEP or Solo 401(k). This couple has one child, who turned 21 in July. I understand that spouses are considered a controlled group for testing purposes if they have a child who under age 21. So as of now (December 2017), they have no child under age 21. I am thinking that a controlled group exists for 2017 purposes because the child didn't turn 21 until July 2017. Agree? (I was hoping to have the wife open a Solo 401(k) plan for 2017 and then maximize it, but that doesn't work well if she's part of a controlled group. So, assuming she's in a controlled group, I'll have her sign a participation agreement with her husband's plan. That leads to another question, though -- can she defer $24,000 under his plan? My concern is that her business is just now adopting the plan, though the terms of the agreement state that the participating employer status is effective as of January 1, 2017. Finally, would her deferrals be subject to ADP testing?)

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Suppose I have a one person defined benefit plan. The owner is in the 55-62 age zone. If he wanted to draw his pension but not terminate the plan could he stop working for Company X and start working for a newly formed Company Y? Company Y does not enter into any kind of joinder or participation agreement regarding the plan of Company X. In other words, is retirement on a controlled group basis, or can it be viewed purely from the standpoint of the plan sponsor?

A governmental 401(a) plan has pick-up contributions only. Employees can elect different percentages to contribute based on the type of pay (e.g., up to 30% on payroll, up to 100% on bonus). If a participant goes over the 415 limit and has excess annual additions, does the plan distribute the excess to the participant?

Plan has less than $250,000, so there's been no need to file Form 5500EZ annually -- just need to file Form 5500EZ for the final plan year. If the plan is terminated near the end of 2017 and the assets are distributed in early 2018, I know Form 5500EZ is needed for the short plan year of 2018. But is Form 5500EZ needed for the year 2017 just because the plan was terminated in 2017? What year is the final year of the plan in this case?

One of the plan sponsors we work with recently mentioned that their U.S.-qualified plan has a couple of Puerto Rican employees participating in it. At least one of them has been contributing up to the 402(g) limit. No Form 480.70 or 6042 has ever been filed, although it's not clear to me whether this is a requirement or not. This brings up a few questions: [1] Should Puerto Rican employees participate in a 401(k) plan that does not have dual qualification? [2] If there is anything wrong with this situation, what needs to be done to fix it?