"Husband and Wife were considered control group under pre-SECURE 2.0 due to both minor child and community property state. They would meet the non-involvement in each others business and are no longer CG as of 1/1/2024.... They both sponsored a single DB through 12/31/2023. Wife would like to discontinue her participation in the Plan and execute a rollover distribution to IRA (with spousal consent). Wife will continue business, though income for 2023 was $0 and no W-2 was paid to wife's corp. Husband is sole employee of husband's sole-prop, Wife is sole employee of wife's corp and is 100% owner of wife's corp. Can she terminate participation in DB Plan and effect a rollover? ... Does she need to spin off to a new DB plan in wife corp name and then terminate? My understanding is she in not terminating service which would make things easier, the business is just currently not profitable. Wife is too young for in-service distribution and does not meet definition of NRA. Alternatively can her corp end participation in the DB Plan but she remain a terminated vested participant in the the Plan? If she remains a terminated vested participant in the Plan, would the Plan now require PBGC coverage? Has anyone reviewed how the 410(b) transition applies to plans dropping out of CG status due to secure 2.0 change?"

"HCE was a W2 employee for the first 4 months in 2023 then became an independent contractor paid via a 1099 (legitimately). Would they be included in the ADP test in 2023 with their W2 comp and contributions?"

"The way the $1,000 cap and yearly phase out is being applied is different than I understood.... For a small employer(less than 50), if its year 5, and they have given everyone (let's say there are 50) who would be credit eligible individual employer contributions of $4,000, say $200,000 total, then the credit would be $50,000, with the remainder as a deduction for $150,000. That's awesome! My prior (incorrect) understanding was that the $1,000 cap was applied first, before any phase downs / phase outs. Sounds like that is not the case! I would have though for my example only $12,500 would be the credit. The way I am reading the instructions it would be the $50,000. Anyone else agree? disagree?"

"An IRA owner who had begun receiving required minimum distributions (RMDs) during her lifetime died, following which a dispute ensued among beneficiary claimants to the IRA. Litigation commenced in 2023 ... Custodian bank advised the feuding beneficiary claimants that payment of the 2023 RMD needed to be made by 12/31/2023, suggesting the claimants work out an agreement under which the RMD would be distributed to one or more of them so as to avoid a missed RMD, with the distribution amount being reapportioned later, once the litigation concluded and the rightful beneficiaries were determined. No agreement was reached, so the RMD wasn't paid.... [It] appears probable that the case will not be resolved before 2025, raising the prospect of a missed RMD for 2024. For the missed 2023 RMD, does it seem likely that the IRS will grant relief from any penalties on the basis of reasonable cause? Is it possible/advisable to seek a private letter ruling from IRS for the anticipated failure to distribute the 2024 RMD, as the beneficiary claimants again will probably not agree on the disposition of the RMD? Any other thoughts about how to resolve this RMD conundrum?"

"We're taking over a plan with deferrals and SHM only, and the sponsor is refusing to provide us with the SSN of participants who are not deferring. They initially didn't want to give us ANY data on them, saying that we didn't need it (sigh), but they are really digging their heels in with the SSNs. 'We've asked the employees, and they don't want us to provide them'. Is there an argument that we MUST get them? Obviously, we need some kind of entry to put into our pension software.... but I suppose that could be a dummy number. I don't like the sound of that. I've outlined the main reasons that we would need the SSN (consistency in tracking, possible corrections, possible use of fund platform notice distribution services, it's just What It Is), but I have to admit that if I was an obstinate employer, they aren't exactly convincing that there's nothing a specific kind of random identifier number couldn't handle just as well. Any suggestions?"

"We have a client who had an employee contribute $6,750 to their HSA and $800 into the FSA in 2023. The FSA contribution was meant to go into a limited purpose account, but they just learned that there was no limited purpose account set up, and the funds were coming from the full-purpose FSA. Prior to this, they had a rule set up in their system, which prevented the enrollment. The only reason they allowed the election to pass was because they thought it was a limited purpose account. We are currently working with the carrier to set up the limited purpose account so this will be corrected going forward. The employer did instruct the employee at the time that the FSA was to be used for dental and vision only. How should we advise the client for what occurred in 2023?"

"In the case of an owner of multiple IRAs who was receiving RMDs from her IRA accounts before death, can the IRAs be aggregated after death, as allowed during lifetime, so as to permit payment of the total RMD amount for all the IRAs to be made from a single IRA account?"