Mr Bagwell

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About Mr Bagwell

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  1. JT, It sounds like the plan was going for a 1/1/2016 to 12/31/2016 Limitation Year with a short plan year of 8/1/2016 to 12/31/2016. With this set up you can use the full year compensation for those that entered 8/1/2016. But, for some odd reason, the plan effective date was set for 1/1/2016.
  2. Thanks. That is what I was looking for.
  3. Employee received too much match from too much compensation. The calculation of the match did not stop at 265,000. Employer thought the 265,000 was only for the safe harbor calculation....lol. The employee received his 2% match on 444,000... I need to remove the extra match and place into unallocated acct. The employer was questioning if they could reallocate the extra match as an employer non-elected contribution for 2016? Is this permissible? (I didn't use the term forfeiture because I don't think this is a forfeiture situation)
  4. BG, I don't know how to attach a link.... but if you search in 401k forums for carve out is will bring up a thread named "otherwise excludable HCEs on ADP test". Look for response by Tom P. Dated 3/8/2016 I think it has what you are looking for.
  5. Sorry for the confusion on the "suspension of allocation"..... It refers to the fail/safe language in the document. Our plan doc allows you to Apply or Does not Apply the suspension of allocation conditions.
  6. The employee met eligibility requirements and became a participant 7/1/2016. I am bringing him in via plan document fail safe language.
  7. I need help to see if my logic is correct... Small plan. 3 NHCE and 2 HCE. Discretionary match and profit sharing. Allocation suspension applies. Last Day and 1000 hours for match and profit sharing ( 2-tiered). Top Heavy Plan. Participating Comp. Semi-Entry. One of the three NHCE terminates in 2016. So 410b fails (m) and (a) at 66.67%. Can't use ABT because of suspension. So the terminated employee must benefit to pass 410b. For Match: the terminated employee does not defer so does not get match. No allocation condition is going to get him a match. I yes-override employee in Relius to get a passing (M) test. In essence I have removed the last day allocation provision and because employee is able to defer, the employee benefits for match..... at least that is my thoughts. Profit Sharing: the terminated employee shares in the profit sharing after "removing" the last day allocation provision. Employee came in 7/1/2016 so use compensation from 7/1/2016 to day of term. I would guess if Top-Heavy allocation would be greater than profit sharing, I would put in the TH contribution amount. Profit sharing is greater in this case. Am I missing anything in this scenario? Of course, I tell the bosses and sales team to ask about number of employees and design plan accordingly.....
  8. Yes, that is what I was told.
  9. I was doing some reading on the Common Paymaster. It talks of related employers. I don't think there is anything related other than location and some business may flow back and forth. I'm under the impression that the employees aren't leased. They do the work of their own attorney. I'm not overly concerned, just learning....
  10. Jelly(k) was the fictitious name of the employer..... The employer is handling the payroll and benefits for another attorney's employees. But the attorney's employees deferrals are going to said attorney's 401(k) plan, not the one we administrate. I have seen PEO arrangements like this.....but I'm guessing that is not happening here.
  11. We have a 401(k) plan that just keeps giving all year long...... If I use some incorrect terminology, please bear with.... We have a 401k plan (Jelly(k))for a group of attorneys. A org setup, PC. Pretty straight forward at this point. However, there is an attorney in the same building/floor that is NOT part of the A org PC, not an employee of said employer, that is practicing too. He has 3 employees that are run under the Jelly(k) employer for benefits and payroll. So the 3 employees get a w-2 from Jelly(k). The attorney then reimburses Jelly(k) for the 3 employees expenses. The interesting part is that the 3 employees deferrals go to the separate attorney's 401k plan. I don't think this is correct. Can this work? I'd think the 3 employees deferrals would belong to Jelly(k)'s plan, not the other. What are your thoughts on this?
  12. Wouldn't the comp + excess comp be above the 265,000 limit in these cases where HCE's compensation is capped at 265,000?
  13. Is the profit sharing a 2 or 4 tier formula?
  14. I understand your concern. I just don't see it as egregious.
  15. Austin, I would not use this memo for proof text for owner's spouse scenario you asked. The ADP scenario you mention is a manipulation so the HCE's can effectively keep and defer a little more into the plan. The NHCE's are not getting worked over to hold down potential benefits. I would use the spouse's zero to benefit the ADP test. I don't think it smells as bad as the floor I work on:)