"Looking at a termination of a Cash Balance Plan. Obviously, like most plans, the assets are down in 2022 so now that they are looking to terminate the Plan. They are roughly $20k short of the balances earned to date. That said, the only participants are the owner and his wife. Is it necessary for them to make a contribution in order to bring the balance up to the earned balances? Or can they simply distribute the money that's in the plan?"

"I have been with a large employer for several years that has had an employer-funded pension plan. The employer announced that at the end of this year (2022) it will stop adding contributions to the plan 'because other companies don't do that anymore.' I don't fully understand the possible impacts/implications for me personally. This makes me nervous.

I cannot withdraw or roll over my pension proceeds without leaving the company, but it also seems me that the pension can only start to dissipate over time once further contributions are 'frozen.' My immediate problem is I don't even know what specific questions to ask, or what to monitor in deciding whether I should 'take the money and run' or isntead stay with the company.

From my point of view, anyway, the current sum involved is not insignificant -- around $250K. In lieu of 401(k) contributions, over the years I have looked to the pension as a resource for future retirement. I have a 401(k), but there is not much in it. Any thoughts/ideas/suggestions? Thanks! W.R. Smith"

"My client is a dentist who wants to reduce required hours for vesting service -- retroactively -- in order to make a couple of part-time hygienists happier. He will be selling the practice soon and he wants to keep them around until then. Once he sells, he will then make everyone 100% vested (even terminated employees). When I went to restate the plan to reduce vesting hours from 1,000 to 500, I didn't have the option to put in a retroactive effective date.

Do you think it's OK to drop hours for vesting and bump up the percnetage up for the part-timers? This hasn't affected anyone who has been previously paid out in the last 6 years that I am aware of."

"Plan has dual eligibility. There are a few employees with prevailing wages, who do not qualify for receiving an allocation of the profit-sharing contribution because they did not satisfy the eligibility requirement. Hence the gateway test fails. How should this be handled? Note: Prevaling wages are not enough for 5%."

"We're taking over a client's plan starting next year and looking over their 2022 information. It looks like they added a Safe Harbor match midway through the year. It appears that the date they added the Safe Harbor match is the same date as the effective date for deferrals, even though the plan has a 1/1/22 start date.

I always thought that a mid-year Safe Harbor isn't possible. But does this this structure makes it OK?"

"Deferrals and match for three payrolls posted to the participant's account (all deposits made timely). The employer discovered the employee was actually terminated and hence not eligible for the compensation paid. The employee returned the compensation, but he took his distribution from the plan before the incorrect match and deferral could be debited from the account.

Is the needed correction to request the participant return the overpayment? Vendor will need to modify the 1099-R to reflect the overpayment.

If the participant does not return the funds, can the deferral and match be excluded from the ADP/ACP test (the participant is a NHCE)? Based on this updated compensation, his match would exceed the match formula.

We're pretty sure the participant will return the funds, but need to figure out Plan B in case he does not."

"Plan is starting a Basic Safe Harbor Match, effective January 1. The custodian will not be ready to accept contributions until February 1. If we make the plan effective January 1, but deferrals are not allowed until February 1, will the plan need to do ADP/ACP testing for this first year?"