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Well, answered or not, we've determined our ASC document needs no amendment and forfeitures can be used to fund SH contribution for 2016 but not yet paid. We've concluded that in good faith our Relius document needs no amendment (although Relius says they will be drafting one) and that forfeitures can be used to fund SH contributions for 2016 but not yet paid. Relius, being BUT ONE SOURCE of expertise, disagrees, and we considered that, but we have more "ERISA" attorney's on staff than they do.

My standard recommendation for a "start-up" is a 401(k) - for the very simple reason that you have considerably more choices in service providers (for now) than you do for 403(b) plans. I would add to that a few caveats - just for consideration. First, your choice of 401(k) plan providers for a "start-up" are much more limited - but depending on growth, that could change as more providers vie fo rthe business. Second, while I don't mean to pan insurance companies (I work for one), but many of the start-up 403(b) options are going to be group annuity products, and while they are light years better than contracts of years ago, the mere fact that it is an insurance contract adds some complexity (and maybe back-end misery, depending on the terms of that contract). To this day, I fight with co-workers who use "contract" and "plan" interchangeably - AND THEY ARE IN THE BUSINESS. Third and finally, there are still differences between k's and b's - and some like the special catch-up provisions in a b plan (but if they never had them, would they miss them in the future when it actually might be useful?)

Another ERISA attorney's opinion came out today in Sal's eRISA Update,Winter 2016/2017, Issue #57. He says Pre-approved plans that prohibit the use of forfeitures towards SH, QNEC or QMAC will need to adopt an interim amendment under Rev. Proc 2016-37. He also says that while the IRS did not address operational compliance prior to an amendment, it would appear that as long as you don't violate 411(d)(6), operational compliance should be permissible. He does not specifically mention 2016 years, although he does say you should be able to rely on the proposed regulations for periods prior to their 1/18/2017 publication date. That's not as clear as some would like, but not a restrictive as the other known opinions. I'm sure there will be more to follow.

Participant already selected the option he/she wanted based on his/her retirement needs and overall tax situation. The service provider screwed up, and now needs to correct it by making sure the participant gets his or her full rollover. Why would the participant have to accept something he/she didn't want because the service provider screwed up?

Is the plan set up through the payroll company, or are they just doing the payroll?

Carefully simply means drawing a bright line between income sources and "playing by the rules" with respect to his own business (business formality, etc.) to ensure no complications. I was involved in a similar situation that required an (expensive) accountant to sort out in the face of an IRS audit. That "agent" sold certain lines as an employee, but sold other lines from the same insurer as an independent. The IRS challenged whether the "commissions" he received from the "independent" side was actually comp from the insurer as an employer, and not income to the side business. It didn't help that he commingled funds and didn't maintain good records. Otherwise, I do this all the time (but usually with respect to very different "businesses," a doctor who runs some non-medical business on the side, etc.)).

Includible compensation is not defined as W-2 compensation. It is "the amount of compensation which is received from the employer described in paragraph (1)(A), and which is includible in gross income (computed without regard to section 911) for the most recent period (ending not later than the close of the taxable year) which under paragraph (4) may be counted as one year of service, and which precedes the taxable year by no more than five years." Code section 403(b)(3). A US citizen is typically subject to tax on worldwide income, subject to the section 911 exclusion. So unless there is something screwy in the US/Canada income tax treaty, I suspect that she is subject to tax on her income, and thus that the income can be the basis for a 403(b) contribution. Of course, whether she would want to make a 403(b) contribution might depend on Canadian law. (If they would tax her income without any exclusion for the 403(b) contribution, she might decide that the tax benefits of a contribution would not be worth it.) But I suspect that she should at least be offered the opportunity to participate in the 403(b), unless her compensation is for some reason entirely excluded from income for US tax purposes.

I'm having so much fun with calculations that I had to do some reading on this as well. EOB pretty much agrees with Tom's notes it looks like (Ch. 3B - Part 2 - Section IV - Part A - Item 5). The highlights from the section: There is not a specified due date for top heavy contributions In order for the contribution to be deductible for a particular tax year of the employer, IRC §404(a)(6) requires that the contribution be made no later than the due date (including extensions) for filing the federal income tax return for such tax year. Under the IRC §415 regulations, an employer contribution is generally treated as an annual addition for a particular limitation year if it is actually made no later than 30 days following the due date (including extensions) of the federal income tax return for the employer’s taxable year in which the limitation year ends. See Treas. Reg. §1.415-6(b)(7). Use deduction deadline or IRC §415 deadline as informal deadline. If the two deadlines discussed above are used as an informal deadline, then top heavy contributions made after such dates should include an adjustment for lost earnings. A reasonable approach is to use the IRC §415 deadline if the employer has not made the contribution for any non-key employees and to use the deduction deadline if the employer has missed one or more, but not all, non-key employees in making the top heavy contribution. This approach also would be consistent with a reasonable approach for making employees “whole” through the self-correction mechanisms under the EPCRS program. In the latter case, the earlier deadline is used because other non-key employees had the benefit of the contribution by such deadline for earnings purposes.

... delete the notifications that are listed in the pop-up window when I click on the Bell symbol at the top of the page.