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For a suspension of the safe harbor match during the year, ADP/ACP testing must be done for the full plan year using the current year testing method. 1.401(k)-3(g)(1)(i)(E) & 1.401(m)-3(h)(1)(i)(E). If the plan is terminating, we would need to know if it was in connection with a 410(b)(6)(C) transaction or if the employer has incurred a substantial business hardship 1.401(k)-3(e)(4).

I consider Kevin C a "guru" on these boards.

If the initial plan year were a short plan year from 1/1/17 - 11/30/17 then I think the rule under 1.404(a)-14(c)(1) would allow both deductions to be taken for calendar tax year 2017. I agree it's fishy though. You can get a plenty big deduction from a well-designed plan without resorting to these kinds of tricks.

This change would be to make positions at our company more attractive overall. We don't have a certain employee in mind, and the amendment wouldn't benefit an HCE or anyone we anticipate becoming an HCE in the future. Thank you for the response!

I agree with Bird that you need to be sensitive to the plan language, but given that the draws are not actually self-employment income, but rather estimates, or in some cases in effect loans, and given the language of 1.401(k)-1(a)(6)(iii) and (iv), I'd be inclined to think that simply calculating a partner's match based on the number that ends up being his/her self-employment income is not really a true-up. I mean, match formulas usually have two components, a rate (e.g. 50 cents on dollar) and a cap (e.g., 3% of compensation). A true-up is usually more important for the rate (e.g., participant did $0 deferrals for first 6 months, $2,000 per month for second 6 months), than for the cap. You're not giving the partners a break on the rate part, just the comp part, and that seems arguably OK under the cited reg provisions.

At what point is it appropriate to start this question with "Robert has blurb..."? ?‍♂️ Joking aside, isn't the point of the section you are referring to that if you have a successor plan you no longer have a distributable event due to plan termination? If a successor plan exists, assets with distribution restrictions (elective deferrals and SH) are not distributable due to plan termination if a successor plan exists, while other contributions like profit sharing and non safe harbor match would be distributable even with a successor plan in place. So any participant who does not otherwise have a distributable event, would have to have their restricted contributions transferred to the successor plan or stay in terminated plan until a there is a distributable event. This is assuming you have the successor plan in place at termination. If you distribute all assets and then establish a new plan within the 12 month period following distribution, you have a big problem with the distributions you already did...

All participants should receive the SPD, and the SPD contains a description of the provision for restoration of forfeitures after re-employment, so yes, they are provided a formal notice.

The TPA is done. There is no defense. If the TPA added the language they lose in court 10 out of 10. Just settle.