Leaderboard

You are covered, but that is not the way I would say it. If deferrals and Safe Harbor contributions are the only allocation anyone received, the Plan is deemed to be "not top heavy".

The profit sharing contribution should work, assuming the plan document language supports this sort of allocation. It is common to credit prior service with a selling entity for employee eligibility and vesting in the buyer's plan, so nothing unusual there. Assuming they are buying the assets from the seller's corporation, the seller won't have ownership in the buyer and the selling entity is not contracted to provide management services then the seller should be an NHCE. Cash balance won't work as they have to meet 401(a)(26) participation requirement. If the current safe harbor matching 401(k) would be top heavy but for the SH exemption, adding a profit sharing contribution to the plan would blow this exemption, so TH minimums could then be triggered due to deferrals and match received by key employees in that plan. You could avoid this with a separate PS plan that covers only the seller. Since he is an NHCE and non-key, and the 401(k) does not rely on the PS plan to pass coverage or non-discrimination the two plans would not be a RAG under 416 and the SH plan could maintain its TH exemption.

I have a submission to EFAST where only the plan name changed. When I got the same error as Santo (Z-003) I called EFAST and was also referred to the instructions where he said it basically says you can't change the Plan name. So I said to the guy, "You're telling me that you can NEVER change the name of a Plan?!" He asked me to wait, put me on hold and said he would call the DOL and connect me to someone. After a short (5 minute or so) wait he came back on the line and said he couldn't connect with anyone but had left a message on the voice mail with my information and that someone form the DOL would contact me. I'll let you know if I get a call back......

There is lots wrong with it. Grammar, punctuation, possibly spelling, probably one or more omitted words, all of which leads me to caution.

Step two - go ahead and have the existing trustee-who-isn't-really-a-Trustee removed, and he can appoint himself as Trustee. Does the Plan document have "failsafe" language where if no Trustee is appointed that the Employer/Plan Sponsor is the Trustee? If so, I think you probably don't have any worries. If not, then if the Employer/Sponsor performed any Trustee duties, you might want to check with an ERISA attorney about some sort of resolution formally ratifying any acts performed as a Trustee while not officially being named a Trustee - that's getting out of my league.