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We use Sharefile and I suppose it is OK, but it is too complicated for a lot of our clients and I presume there must be a better option out there. I'm curious if anyone uses a different system. Sharefile is integrated with Outlook so we can easily encrypt our attachments, AND our clients can upload files directly to our own personal in box. But the password thing is clunky, clients always forget their passwords, etc. Anythng better out there?

Thanks Bill. Yes, on going back to re-read, the emphasis on the "mid year" change is not in the body of the question, and the subtlety of the change being mid year was missed. On that basis, I certainly agree with you. I wouldn't call it aggressive; I would call it a big no-no!

You have to make sure that the amendment does not discriminate in favor of HCEs. That is, for every HCE that is affected by the amendment, at least one NHCE must be affected by the amendment.

Absolutely; that's the way you do it. You can give credit for eligibility and vesting, or just eligibility (I almost always do both; why would he want to "penalize" his new employees by not counting the years toward vestin?).

Absolutely brilliant response, as always! ?

Yes, you must protect required provisions with respect to transferred benefits/accounts. Depending on your AA, or more likely the basic document, maybe that is an automatic w/o the need for additional language. If not, there is often a protected benefits addendum on a typical AA or you just use the other provisions addendum to either itemize your protected provisions or (probably not the best practice) state those prior plan protected provisions are incorporated by reference. Any way you slice it, you're probably outside adoption w/o modification unless the protected provisions are also available options in your AA, but don't apply to prospective accruals.

Can't they just have it forfeited from the participant's match source?

John, the confusion is coming from about 95% of people writing that they've discovered a miracle. Search "backdoor roth 401(k)" for a sampling.

And here is the commentary from Sal: 1.a.8) Who vests when a significant reduction in participation occurs?. The law says that employees who are “affected” by the partial termination become vested. Who is considered “affected” by a partial termination that arising from a significant reduction in participation? In Rev. Rul. 2007-43, the IRS states the following: “f a partial termination occurs on account of turnover during an applicable period, all participating employees who had a severance from employment during the period must be fully vested in their accrued benefits, to the extent funded on that date, or, in the case of a defined contribution plan, in the amounts credited to their accounts.” (An “applicable period” for this purpose means a period for which a partial termination has occurred.) Since the IRS refers to all participating employees who had a severance from employment, apparently, the IRS believes that even employees who voluntarily sever from employment during the applicable period get the benefit of the accelerated vesting triggered by the partial termination, even though voluntary terminations are not taken into account in determine whether the reduction in participation is significant. This apparent interpretation is borne out in an FAQ posted at the IRS website stating such a position. See http://1.usa.gov/1xZ6TWc. The IRS’ position seems to be contrary to the intent of the partial termination rules, but we are not aware of any successful challenges to the IRS’ position. At one time, it was reported that the IRS had been training agents to require only the involuntarily-terminatedparticipants in the applicable period to become 100% vested on account of the partial termination. However, more recently, the IRS has apparently started enforcing this interpretation. Unfortunately, many employers have accepted the IRS interpretation on the basis that the funds involved are not significant and the cost of fighting the IRS is not worth it.