Under the 409A exemption for stock rights, an "option" means "the right or privilege of an individual to purchase stock from a corporation by virtue of an offer of the corporation[.]" If you have an otherwise exempt option (i.e., it meets all the substantive exemption requirements of nonqualified stock options) but the option is to purchase employer stock from the majority shareholder of the employer, do you still meet the 409A exemption? The definition in the 409A regs is carried over from Section 421. Also, Section 83 has rules governing the purchase of employer stock from another shareholder in connection with the optionee's performance of services for the employer. It treats the transaction as being routed through the employer for tax purposes. I see no cross-reference or carryover of a similar concept under the 409A regs. Thoughts? Because the tax treatment is already fixed under Section 83, could the option be issued directly from the employer such that the controlling shareholder then could have the same number of his shares redeemed by the employer upon the optionee's exercise? That would avoid dilution of the minority shareholders, which was the original goal.

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Company A is a partnership. There are 6 owners of company A. Two of the partners' net earnings are negative before any calculations are made. Profit sharing amount is determined for rank and file employees. Do these owners also receive a share of the cost of the profit sharing (based on their ownership percentage) taking their earned income to a greater negative amount? Because their earned income for plan purposes is negative, we are reflecting their comp as zero. Should these two partners be included on the ADP/ACP test?

Employer has 401k and 457b plans. An HCE will terminate 1/1/19. He thinks he can take a distribution from the 457b plan, and have that count as compensation for the 401k plan (which he could defer on and get matched.) I don't work on 457b plans but that doesn't seem right. The document says compensation excludes payments received by a nonqualified unfunded deferred compensation plan, only if the payment would have been paid to the employee at the same time if the employee had continued in employment. How do the 457b and 401k rules integrate with respect to compensation?

I have a client with a DB plan who has reached age 62 and has a 415 max lump sum available to him of $2.8M. I'm not an actuary, so please bear with me. I've been told that the maximum lump sum declines from age 62 to age 65. Is that correct? Also, the plan currently is about $500k short on assets. The client is the 100% owner. Do substantial owner waivers still exist? Finally, if the client decides to fund the shortfall so that he gets his full $2.8M, does he need to do that in a single contribution? Could he fund it over the next 12 months or so -- or would I have to worry about his 415 lump sum going down?

Looking for recommendations for vendors who can provide plan documents and other services for starting a 457(b) plan for a small charity. There will be less than 5 participants (probably just 2 or 3).

For bankrupt employers, HATFA Section 2003(c) generally revised IRC Section 436(d)(2) to provide that the AFTAP is determined without regard to the adjustment of the segment rates under IRC Section 430(h)(2)(C)(iv) to determine benefit restriction under Section 436(d)(2). For non-collectively bargained plans, the statutory amendment deadline was the last day of the 2016 plan year with the IRS having authority to extend this deadline. Has this deadline been extended by the IRS, and if so, to when? Also, what is the remedial amendment period that applies here if the deadline was missed? For example, even though non-collectively bargained, would this plan be eligible for the extended remedial amendment period under Notice 2016‑80, i.e., 12/31/2018?

A fiscal year TIAA plan was amended for the last plan year to change its employer match to an enhanced Safe Harbor Match. The plan sponsor continued to deposit the SH Match in the match accounts instead of setting up a SH Match account. Should they just approach TIAA to have them move the SH into its own account along with allocable yield?