Leaderboard

If all this happened in 2017, to me it's very possible that the $10k was actually a deferral and the payroll just wasn't completed correctly. So, I don't see this as a plan issue, I see it as a payroll issue that needs to be corrected. WCP

A sole-proprietor doesn't "know their pay" until they file their taxes. At least that's the explanation I've heard as to why sole-proprietors can make their 401(k) contribution as late as 10/15 the following year and not be a late contribution for the 401(k) timing rules.

I am going to think out loud here, i.e., no research or review of the guidance. I would think that if the make-up contributions are truly and completely nonelective (I.e., the municipal ordinance does not give the employee the option whether he/she wants the retroactive coverage or not, or how far it goes back, and the employee had no role in negotiating the change), then these could be pre-tax pickups.

I agree Derrin's book is great. I didn't need it for the above question, but I have used it a lot. FYI, had Derrin gone into the clergy instead of law, I think he could actually have figured out how many angels there were dancing on the head of a pin.

you did not say if plans passed testing aggregated or unaggregated. 1.401(k)-1(b)(4)(iii)(B) last sentence "you can not aggregate a plan using the ADP safe harbor provisions with a plan that is using the ADP test" so it would complicate things, because how you test plans for coverage also requires how you test for nondiscrimination (and vice versa)

no, before getting to component plan testing you have to pass gateway 1.401(a)(4)-9(c)(3)(ii) think of this way. you want to do nondiscrim testing which in some way involves cross testing. so you want to CROSS into that magic land, but there is a huge impenetrable hedge full of nasty thorns as well on one side. even if you could get to the hedge, you would first have to get over the moat full of nasty slimy things (including Flint water runoff). You tried testing on an allocation basis (which would avoid a gateway) but Gandalf is standing there saying "You shall not pass". So your only choice is to go through that magic GATEWAY. (first and foremost, before proceeding any farther down the road to cross testing land) hmmm. my copy of the regs says "Lord of the Things", but at least I can slightly understand it.