"A 401k plan owns company stock, in fact owns 95% of the company stock. One participant has more that 5% of the company stock within his account balance, no company stock outside plan. Is he a more than 5% own of the company?"

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"Existing DC plan with NRA 65 only Planning to add a DB plan for 2023 with NRA 65/5 YOP Owner is age 64. Under DC plan NRA is 65 Under proposed DB plan NRA is 68 What is the testing age for combo plan? The system is taking the AB and actuarially reducing to age 65 and testing it. I find this a bit skewed and favorable to owner as:

• less years to project
• lower AB for testing

What am I missing here?"

"Basics: Individual account 401k plan with 4 insurance policies owned by the plan. Decision has been made to surrender these policies for the cash surrender value and invest the proceeds into the individual participant's accounts in the plan. The participant in over 59 1/2 and the plan allows for in-service at 59 1/2. At least one of the insured plans to take an in-service after the proceeds are received and roll them to an existing IRA. The insurance company form indicates 10% of the proceeds will be withheld and sent to IRS. Form also says owner can instruct insurance company to not withhold taxes. This obviously makes it seem like insurance company is treating this as a distribution and not a 'transfer' of assets inside of the plan. So even if they are instructed to not withhold any amount for taxes it makes me think they will still create a 1099R. [1] I don't think a 1099 should be created [2] I think they will screw it up. Can someone confirm I am correct in thinking that the surrender and the transfer of assets into the individual account should not be a taxable event nor require a 1099?"

"We do most of our 1099s through FT 'fulfillment' service where the print/mail/ and send everything to the IRS. But after 1/31 we need to do them manually (for example when a client only tells us about it now). For years we have been ordering the IRS's red ink 1099s and trying to print the 1099s on those before mailing hard-copy to participants. Can someone explain to me why I am making my life so much more difficult even though I know from doing my own takes that taxpayers don't even send those to the IRS?? Are people sending this out just on regular whit paper?? If there was a compelling reason I would be all over it but if there is one I just can't see it...."

"Someone in my organization (that we normally see as the expert) is saying that the rules for successor plans only apply to the business/EIN. In other words, if a company dissolves and opens a new LLC under a different EIN, they are not at risk of violating the successor plan rules.

"I always thought that these rules also applied to ownership. Our director is saying that they don't. I thought the purpose of the successor plan rule was to prevent employers from cycling through retirement plans so they can't simply have a distributable event and then open another plan. I would think this applies to ownership as well, because what's to stop an owner from dissolving and creating new companies to terminate/start up a new plan?

"Do you have any feedback? Is this person at my company correct? I don't want to dismiss the possibility that I might be mistaken, but I could really use a source that specifically mentions that the owner is exempt from this rule as long as the other company closes and the new plan is with a new company and EIN. All I can find uses the word 'employer,' and that seems vague in this particular instance. Again whether I am right or they are right, a source would really be appreciated."

"I have a client who wants to do a Safe Harbor plan with the following formula: For each 1% contributed, the Employer will contribute 2% (maximum 5%) So -- if a participant contributes 5% -- they would receive a 10% match (2 for [1] the max comp for Safe harbor is 6% -- the max allowed in the plan is 5% Does this mean that this is a valid Safe Harbor Match Formula? or would i have to separate this between SH Match and Discretionary Match?"