"We are a tax-exempt entity ('A'), merging with another tax-exempt entity ('B'). Both A and B have 457(b) Plans. We are concerned the merger will trigger distributions under B's 457(b) Plan. The B Plan provides for distribution upon Severance from Employment. According to the regulations, a severance occurs when the participant has a severance from employment with the eligible employer. Eligible employer is defined as the tax-exempt entity that establishes the Plan. Can A just take over the B Plan and treat it as if no severance occurred? A did not 'establish' the plan, so maybe not? What are our options here?"

"I need clarification on something for the Employer Contribution Credit. The instructions seem to conflict (or perhaps just don't address) with my reading of the actual tax code. I would like to know what others think. Does the 3 year lookback apply for all years? or just the first year? See I.R.C. Section 45E(f)(4) Determination Of Eligible Employer ... and I.R.C. Section 45E(c)(2) Requirement For New Qualified Employer Plans ...

'Based on 45E(f)(4) and 45E(c)(2) my understanding is that the other than year 1, an eligible employer doesn't have to look at the 3 year look-back. So if an eligible small employer sponsored a SIMPLE or 401(k) or such last year, and it terminated and closed. And next year wanted to start a new plan, they could. The first year of the new plan the employer contribution credit would not be available, but for years 2 -5 (before the phase out wipes it out completely) it would be available.

'The instructions to the Form 8881 don't align with my understanding -- specifically under the Employer Contribution Credit section ... The Form 8881 instructions do not mention that the 3 year lookback only applies for the first year.

'I know the conservative approach would say to follow the form instructions and the credit would not be allowed. But that's not how I read the actual text of the law. Why bother having 'except that paragraph [2] thereof shall only apply to the taxable year during which the eligible employer plan to which this section applies is established with respect to the eligible employer.' if they wanted the lookback to apply to all of the years? ... I understand that the lookback period is the 3 years before the plan starts. It's not a rolling 3 years. The three years is fixed. That's not my question. With the SECURE 2.0 rules for converting SIMPLEs to 401(k)s -- we have plenty of employers wondering if they would be eligible for the contribution credit in the later years of the 401(k) plan."

"SECURE 1.0 and SECURE 2.0 increased the RMD age. Let's say a DB plan kept their distribution age at 70.5 and continues to pay mandatory distributions at 70.5. Let's assume a participant turned age 70.5 in 2023 and the DB plan will pay the first 'RMD' by April 1, 2024. Can a participant roll that payment to an IRA and avoid taxation since the plan is forcing the distribution sooner than they otherwise are required to? Does by virtue of the plan keeping the RMD age at 70.5 make this an RMD? Or does the participant have any individual choice to roll it since it is paid before 73?"

"From the instructions: 'Line 18. Contributions Made to the Plan. Show all employer and employee contributions either designated for this plan year or those allocated to unpaid minimum required contributions for a prior plan year. Do not adjust contributions to reflect interest. Show only employer contributions actually made to the plan within 8½ months after the end of the plan year for which this Schedule SB is filed (or actually made before the Schedule SB is signed, if earlier).'

"What are folks doing when the amounts actually deposited during the year are way more than needed? Assume they will file Form 5330 and pay excise tax. On the Form 5500-SF (I work only with small DB plans) do you put the full amount of the deposits? And just the amounts actually allocated for the year on the Sch SB? The Sch SB amounts will be lower than the contributions on the 5500-SF. Is it okay that they are different? Assume the plan cannot be amended to increase benefits (which is now an option for 2024 per SECURE 2.0)."

"Keeping in mind that safe harbor does not work for all plans, as we run projected ADP testing for 2024, is anyone else noticing significant changes because of the HCE Comp definition increase from 2022 of $135,000 to 2023 of $150,000?"

"This 401(k) plan was moving along very smoothly. Then I discovered that for the owner (who didn't defer this year) received a match contribution ... on nothing. The CPA told the bookkeeper to put $4500 in for him. Who knows what he was thinking. We have some true-ups for the other employees that we will eat up most of the $4500 but there is still a some left ($2700). To remedy this can the owner put in the $2700 as a Roth deferral which would me batches 100% because it is so small? Amend the W2? or is it too late?"

"If the Plan is Top Heavy, but no Key Employee received a contribution (they also did not make any deferrals for the year) the Top Heavy contribution is not required correct? Since the highest contribution percentage for a Key Employee is 0%. I just wanted to make sure I was not confusing myself."