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What time did he get off of work?

There is also a timing rule for when the contribution must be deposited to be considered an annual addition for the year. Underline added since I can't change colors.

Have the recordkeeper transfer the money to the QDIA and correct the earnings.

I have always understood it was for facts like this that there was the April 1 following rule. People who terminated late in a year it might take a while to determine they are due an RMD. Obviously, there is no practical way to hand him an RMD check as he walks out the door. I think he is due 4/1/2017. That is how I have always recommended it to my clients. He terminated in 2016.

From the EOB Last day of work is usually the date of retirement. Suppose an employee’s last day of work is December 31. Is his date of retirement after that date, which would push retirement into the next calendar year and postpone the RBD by one year as well? According to the IRS, the determination of retirement date is one of facts and circumstances, but normally the last day of work is the date of retirement. The IRS explained its position in a Q&A session with the Taxation section of the American Bar Association held on May 9, 2003. See Q&A-12. However, if the employee returns to work on a sporadic basis, or there is other evidence of retirement occurring on a later date, then there may be a later retirement date for RBD purposes.

well if the plan already passes then as you said, increasing comp would only help. I think I would simply note things somewhere. "close enough for govt work" e.g. under the top heavy rules T-39 (1.416-1) Must ratios be computed each year to determine if plan is top heavy? No.....precise top-heavy ratios need not be computed each year.. so you just aren't being 'precise'. yes, even you, Belgareth.

agreed. also, doing the amendment versus having the failsafe provision gives you some flexibility on how to fix, which could help keep the cost down. however, if you fix by including terminated participants that were previously excluded from the allocation you'll likely need to fully vest that contribution for those people.

Can you terminate the salesperson?

I think a more important question would be 'has an auditor even noticed?'