"Let's say a 401(k) plan is sponsored by a company that's taxed as a partnership and has 2 owners (50% ownership each) at the beginning of 2020. In the middle of 2020, the owners leave the company, so now there are 2 other owners (also 50% each). How would you calculate the compensation for the owners after the adjustments for FICA and contributions to other participants? We use DATAIR for our testing. The issue I'm seeing is that, if we code each of the 4 owners during the year as 50% owners, the adjusted compensation will not be calculated correctly -- the total ownership would add up to more than 100% (4 owners at 50% each = 200%). What would be the correct way to run a plan like this?"

"Plan Sponsor is currently a sole proprietor, and is changing to an S Corp with some of the ownership going to the adult children. So this will require a change to the EIN. Is it acceptable to restate the current document and just change the Plan Sponsor name and EIN, or must we terminate the Plan and start a new one for the new entity and EIN?"

"We have very few plans that register for TINs anymore. One that just did is for a one-person plan, and now the person is moving. I found Form 8822-B that looks like it might be what is needed to change the address at the IRS, but does anyone actually do this? Or is it good enough to wait until a return is filed with a new address and let the IRS update their records at that time? Sure, watch this be the one time that the IRS sends a notice to the trust, and they won't be there to receive it."

"We have a client who passed away earlier this year. The business has shut down, so we are looking to terminate the 401k plan. Six employees are requesting distributions, but there is no authorized signer or trustee on the plan other than the decedent. The wife, who co-owned the business, is not responsive. First and foremost we'd like to get the employees their dollars, and then finish the plan termination. Thoughts on best way to proceed here?"

"I have heard more and more about the DOL audit and how a plan sponsor could be deemed to have breached its fiduciary duty under the plan if is hasn't tried hard enough to find missing participants. [1] Should this be on the top of the mind for plan sponsors? [2] Is there any existing solutions to help you find missing participants?"

"I inherited an overfunded one-participant plan. The participant is the 70 year old owner with three year average pay of $100,000. Maximum 415 lump sum is about $1,000,000, but plan has $1,560,000. She could take the lump sum and move the rest to a qualified replacement plan, but the company won't have income going forward (no way to use up the excess) and she wants to close it down (can't have a plan with no sponsor). So I have three questions: [1] If she were to use a Retroactive Annuity Starting Date of her 65th birthday, the back payments with interest would be $560,000. This amount would not be rolled over. Then she could use the $1,000,000 to purchase a life annuity with payments of $100,000 per year. Is this correct? [2] If she first took her RASD payments, could she then take her lump sum of $1,000,000? Or is this a 415 violation? [3] What if she were 71 (70-1/2 in 2019) and already took her RMD for 2019 and 2020. Does this affect the answers to 1 & 2?"

"Plan was terminated as of September 30; now in process of paying out accounts. Hope to get this done by December 31 for obvious reasons. While tracking down former employees, I reach one who tells me she is getting a divorce. Normally, flag goes up, put hold on account and wait for DRO. Is that the same procedure here? Can a divorce hold up a plan termination? Or, at least, hold it up for this one person?"