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Message Boards Digest

March 25, 2022

Here are the most recently added topics on the BenefitsLink Message Boards:

Jakyasar created a topic in Retirement Plans in General

What Is the Net Income to Use for Pension Purposes?

"I have a confusing situation. John, LLC (filing as a single member) provided me with the 2021 schedule. This is the entity sponsoring the pension plan. I was just informed that the LLC is a 16% partner in a totally unrelated entity (assume no CG and ASG issues at this time). Net C amount was $150k but the K-1 received from the partnership show loss of $50k income. This loss was not reflected on the Schedule C. When I was provided the SE tax form, the SE calculations were based on $100k. Has anyone seen a situation like this? Currently I have no other information and asked about the nature of the partnership income. What am I missing here and what should the income be for pension purposes?"

3 replies so far   |    Click Here to Add a Reply

Becky Schwing created a topic in Cross-Tested Plans

Multiple Formulas?

"401k plan with 3% SHNE + Integrated Profit Sharing.

Has a last day and 1,000 hour requirement.

Two out of the three NHCE's terminated with over 1000 hours worked in 2021.

Two HCE's - both max 401k and get 3% SHNE and then and integrated PS - one HCE above wage base so slightly higher percentage on the PS contribution.

HCE 1 non-elective = 3% + 10.28% = 13.28%

HCE 2 non-elective = 3% + 7.38% = 10.38%

NHCE 1 non-elective = 3% + 7.38% = 10.38%

NHCE 2 non-elective = 3% + 0.00% = 3.00%

NHCE 1 non-elective = 3% + 0.00% = 3.00%

Plan passes 410(b) ratio at 100% because all are getting a non-elective. But my question is, do I have to now test the plan for general non-discrimination because two of the three NHCE's are only getting the 3% SHNE and no profit sharing?

It will not pass average benefit percentage part of non-discrimination because HCE 2 is a spouse of HCE 1 and defers at a rate of 70%.

I was thinking there is a multiple formula rule that exists when something like this presents itself -- even in what is otherwise a 'safe harbor' allocation of the profit sharing which integrated with SS would fall into."

4 replies so far   |    Click Here to Add a Reply

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