Key EEs have 75% of plan assets. TH according to account balance test. Plan has 3% SH to all. Plan is deemed NOT to be TH by virtue of the SH rules. What if we excluded all HCE, or only non-owner HCE from the 3% SH? Do we still get the TH "pass" as there may be some HCE who are non-key and would otherwise get the TH contribution had the plan not been SH?

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Unbelievable. I created a Lost interest calculator to mimic the DOL site, but with much more functionality. I've built into it a way to validate the new interest rates that I enter. Long story short -- I could not validate this quarter. I finally determined that it was the DOL site that was wrong! Take a look at the attachment to this message as proof. The trick is to run an interest calc from 1/1/2018 until April 15, and then 1/1/18 through March 31. Same result!

I have a similar issue to the one Carol had, except we have not yet made the distribution to the tax exempt entity. This is a lump sum distribution to a tax-exempt entity. Do we withhold at 10% under 3405 and not allow the entity to make an election (because under the statute only individuals can opt out of withholding)? I could read 3405(e)(1)(B)(ii) very broadly to mean no withholding is required if it is reasonable to believe the distribution will not be subject to tax, but I don't think that is the better interpretation of that provision. It just seems odd to withhold on a distribution to a tax-exempt entity. Also, do I report the distribution on a 1099-R? I feel comfortable saying a 1099-R is required, so the entity can report the income on its Form 990.

We are a small employer with a SIMPLE IRA. We are being acquired through a stock transaction by a larger company with a 401(k). Can we continue to maintain the SIMPLE IRA as a frozen plan (no future funding) or are we required to terminate it by the end of the 2 year transition period? If we terminate the SIMPLE IRA, what are the tax consequences?

Employer has a safe harbor match plan, top heavy not required. If they added a profit sharing allocation, they'd be blown and have to provide a 3% NEC. Say they had a second plan with an exclusive group of HCE's and HCHE's that passes coverage testing on its own. The non-keys in that second plan get at least 3% for TH. Top heavy rules indicate that each plan needs to satisfy TH, so is the SH match plan still OK?

The definition of Compensation under the 401(k) Plan is W-2 compensation. Employer has a non-qualified deferred compensation plan. Participant receives a distribution from the non-qualified plan. Can the participant elect to defer a portion of the non-qualified plan distribution to the 401(k) Plan? Seems to me that the answer is "yes" because distributions from a non-qualified deferred compensation plan are included in W-2 compensation. Agree?

I have a traditional DB plan that is terminating. Lump sum was only available at retirement age and now it is available to all due to the plan termination. When we calculate the PVAB for anyone at ERD we base it on the benefit payable on ERD. We are calculating the PVABs for the 6088 and have discovered that due to the current segment rates the PVAB of the NRD benefit is higher than the than the PVAB of the benefit at ERD. Has anyone run into this? The document really doesn't address it. It makes a $130K difference in the termination distribution amounts. How will the PBGC expect us to calculate it?

A brand new DB plan is started 2-1-2018, plan year ends 1/31. It excludes years of service prior to 2-1-2018 for vesting purposes. Vesting is a 3-year elapsed-time cliff. One participant is a 20% owner and is 71 years old now. The owner becomes fully vested on 1/31/2021. The first RMD is the accrual on 12/31/2018, but it's not vested, so it gets added to the next year's RMD. The second RMD is the accrual on 12/31/2019 plus the prior unpaid (nonvested) RMD, but it's still not vested, so it gets added to the next year's RMD. The third RMD is the accrual on 12/31/2020 plus the prior amounts, but it's still not vested, so it gets added to the next year's RMD. By 12/31/2021, the participant must take the distribution of their RMDs. They terminate in 2021 and elect a lump sum payment. The RMD for a full lump payment can be calculated using the "Account Balance" method (like a DC plan). Can all of these RMD's be determined using the account balance method, or must the 3 prior year's RMDs be based on the DB annuity calculation method?

Employee's 10% deferral election was not implemented for over a year. SH nonelective plan. I don't believe SH plans can use the reduction from 50% to 25% for the QNEC, can they? The employee should get a 5% QNEC for the deferral, plus the 3% SHNEC, plus earnings, right?