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Sorry I forgot to get back to this. The answer that I received regarding the EOB is that the author is less inclined to support eliminating the safe harbor for HCEs mid year and still retain safe harbor status for safe harbor match plans. He did actually mention your argument Luke, but said the IRS may not see it that way and would err on the side of caution and do the ADP/ACP test.

My favorite was a recent advisor who had purchased one of these leads with "red flag conversation starters". He contacted a client and told them they were out of 404(c) compliance and were facing fiduciary liability because the plan had not designated any QDIAs. For a vanilla profit sharing plan.

You miss my drift. I was congratulating you on throwing out an example which lends itself to a detail analysis that holds water. It certainly brings the issue I was concerned with into focus. I'm working on a spreadsheet that calculates the re-amortization amount but as you might expect it gets complicated. I'm allowing for three separate interest rates: original loan interest rate, interest rate to use during the deferral period, and re-amortization interest rate. Yes, they can all be the same rate; they just don't have to be. And for the re-amortization to have a repayment frequency different than the original loan (but both are restricted to weekly, bi-weekly, semi-monthly, monthly and quarterly. May be a few weeks before I'm ready to publish.

Why wouldn't they be? Do you see something that would avoid treatment as any other employer payment?

From TAG - any thoughts? It would be permissible to allow coronavirus‐related distributions from a pension plan, however, in order for a qualified individual to be eligible to receive such a distribution, they would either have to have terminated employment or attained age 59 ½. The CARES Act did not provide an exception to the age 59 ½ age requirement under IRC §401(a)(36) for in‐service distributions from pension plans.

I agree that they can be prospectively eliminated if they have not yet entered the plan, I'm not sure if that's what EOB is referring to there. My copy of the EOB is in dead tree form and sitting in an office which I don't expect to return to any time soon, so I can't reference it, but I am not aware of any superseding guidance. The plain language of 2016-16 pretty clearly prohibits any "mid-year change to reduce the number or otherwise narrow the group of employees eligible to receive safe harbor contributions." I can see an argument in favor of allowing it though. Since a SH plan is not required to provide the SH to HCEs, you could structure a plan to provide that the SH is given to NHCEs and a separate, 100% vested match with the same formula is given to the HCEs. There would be no functional difference between this and a safe harbor plan that covered all employees, except that the match for the HCEs could be eliminated mid year. If you can do that, why shouldn't the option be available to all SH plans without the extra complexity?

*I* determined that we meet the financial operations of the MA advisory list, so that's all we need. If accounting firms are specifically listed, I don't see how we could not fit the same bill.

To amplify @Belgarath Homeland Security has issued guidance not mandates on "essential bussinesses". I quote: "This list is advisory in nature. It is not, nor should it be considered, a federal directive or standard. Additionally, this advisory list is not intended to be the exclusive list of critical infrastructure sectors, workers, and functions that should continue during the COVID-19 response across all jurisdictions. Individual jurisdictions should add or subtract essential workforce categories based on their own requirements and discretion."

No withholding on IRA conversion to Roth IRA. Reported as taxable income by the IRA custodian via 1099R. Taxes paid as normal (with the timely filed return). IRA owner may need to make estimated payments to avoid penalties on both Federal and state income taxes, but the standard rules for having to make estimated tax payments apply.

We have concluded that people can take loans while on leave/furlough. They are on leave so no payments are due for 1 year. They are on furlough and consuidered active so the employer expects them to have pay in the future, certainly within a year. And those payments, pursuant to the loan program, will be made via payroll deduction. You are eiother terminated (and eligible to close your account) or you are active (and eligible for in-service distributions and loans). There is not some third state in the middle. These furloughed people are no less a participant than any other participant who happens to be fortunate enough to receive a paycheck.

So someone cut and pasted a signature? Yours are the only eyes actually looking at it. Fax it back to yourself so it gets all blurry ?

Coleboy - Yes you are correct. I understood that there were no contributions to your plan besides 401k and safe harbor. Discontining the safe harbor match in a plan like tat could be absolutely devestating in terms of expense,. I think of the fast food chain with 6 months of eligibility with just a dozen managers participating. The top-heavy minimum would be multiples of the safe harbor match. In these situations, you have but one option. And even this option only works if the business is experiencing a "substantial business hardship." If your client is experiencing a substantial business hardship the plan can be terminated and still maintain its safe harbor status. There is no other way to preserve the safe harbor / top-heavy exemtpion. Hopefully they will fix this in time through legislation. I've already begun terminating a couple of plans because of this very very stupid rule. I actually hold out hope that someone will look at this and say "these top-heavy rules are so stupid!" and just get rid of them. They are a cancer that attacks small businesses. I don;t think cancer is too strong a word. Businesses that miss this rule in a manner I described will be decimated by this obligation. And clearly some will (most often those run by ABC payroll company or XYZ bundled provider). Edit: The term "substantial business hardship" has a very specific definition. Check out the regs.