M Norton Posted February 13, 2020 Share Posted February 13, 2020 I have a client - a one-physician office, wife manages the office - with SH 401(k). Plan provides the SH NEC 3%, but has last-day rule for PS allocation. 8 NHCEs, 2 of whom terminated during the year, so they get the 3% in addition to their deferrals, but no PS. I pass coverage at 75% but I can't get through the gateway because all the terminated are getting is 3% instead of the 5% needed for the gateway. I need to allocate 2% to them to get through the gateway using FtWilliam basic plan document. Can I use an 11(g) plan amendment to allocate that 2% for 2019? Thanks! Link to comment Share on other sites More sharing options...
Kevin C Posted February 13, 2020 Share Posted February 13, 2020 Have you checked the base document to see if there is a fail-safe provision for the gateway? Our VS document has a provision that provides for an additional contribution when needed to pass the gateway. Link to comment Share on other sites More sharing options...
C. B. Zeller Posted February 13, 2020 Share Posted February 13, 2020 Here is what Section 4.03(b)(1) of our FTWilliam basic plan document says: Quote (1) Allocation of Profit Sharing Contributions. Profit Sharing Contributions shall be allocated to the Profit Sharing Contribution Accounts of each Participant eligible to share in such allocations pursuant to Subsection (a)(1) in the manner described in the Adoption Agreement. If the Adoption Agreement provides that the Plan uses a New Comparability allocation formula, the Company may waive any requirements to receive an allocation for a Participant who does not otherwise satisfy such requirements for purposes of the Company satisfying the Minimum Allocation Gateway requirement of Treasury regulations section 1.401(a)(4)- 8(b)(1)(vi) or 1.401(a)(4)-9(b)(2)(v)(D). However, in order to qualify for the waiver of the previous sentence, a Participant must also be: (1) a Nonhighly Compensated Employee; and (2) eligible for another allocation (including, but not limited to, a Top-Heavy minimum or a 401(k) safe harbor non-elective allocation) that is taken into account in determining whether the Plan satisfies the non-discrimination requirements of Code section 401(a)(4) with respect to Non-Elective Contributions. Bird 1 Free advice is worth what you paid for it. Do not rely on the information provided in this post for any purpose, including (but not limited to): tax planning, compliance with ERISA or the IRC, investing or other forms of fortune-telling, bird identification, relationship advice, or spiritual guidance. Corey B. Zeller, MSEA, CPC, QPA, QKA Preferred Pension Planning Corp.corey@pppc.co Link to comment Share on other sites More sharing options...
M Norton Posted February 13, 2020 Author Share Posted February 13, 2020 THANK YOU, C. B. Zeller - that language is in my FtW plan document - exactly what I needed. I really appreciate you pointing out what I should have seen for myself. Just in too big a hurry this time of year. Link to comment Share on other sites More sharing options...
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