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The plan is borrowing money from a third party? And doing what with it? There could be Unrelated Business Taxable Income ramifications for the plan. Suggest you review those UBTI rules to see if it makes sense.

There has got to be more to this...

More IRS guidance. And not on a Friday! Notice 2020-51

I do not know if there is a prescribed method, but I would think it should not be less than the amount that would be required for the plan to have passed the ADP test each year. Were you planning on self-correcting? Given that the failure spanned multiple years and involved 100% of the eligible NHCE population being excluded from the plan, I think this points to a significant failure which would have to be corrected under VCP.

I say no. A participant that elected to defer all their 401(k) in the first 3 months would be hurt by this change without any way to fix it.

Do you have a real world proposal, or are you writing a treatise? It is easier to evaluate a concrete transaction.

Yeah, but what they mostly said is that they are providing you with an easy peasy safe harbor of (a) suspending through end of 2020, (b) starting repayments again in January, 2021, (c) extending the loan term out for the lesser of a full 12 months or the date 12 months from the date its original 5-year term would have expired, and (d) doing just one new amortization schedule so that all the payments beginning with the January, 2021 resumption date are the same amount. They noted that other approaches could be defended as consistent with the statutory language, but would be more complex and they did not bother describing them, since the safe harbor will be better in almost every instance.

1 - you're allowed to test the over/under group seperately 2 - anyone who is a participant is entitled to the TH minimum if they are employed on the last day of the year. DB eligibility is usual per some schedule attached to the document granting prevailing wage contributions to some people. If if is drafted right in the document only those under 21/1 who actually get a prevailing wage contribution will enter the plan before 21/1 and will not bring in everyone. If you don't have short service HCEs getting prevailing wage contributions that should be fine. 3 - The Davis Bacon can't do both as I understand it. That is if you use it ADP you can't also use it to offset TH and vice versa. You get one or the other. But in practice we don't currently administer any davis-bacon plans so someone who works on them regularly might have more insight.

Read Larry's message again. Slowly. Carefully. Then see what the document says. Slowly. Carefully.

An employer could amend its plan before the end of the current plan year to lower vesting for just 2020 to require fewer than 1000 hours of service if desired. The proactive suggestion to consider doing so might be appreciated!

I bet your language limits hours credited for time not actually worked only up to 500 hours and only to prevent a break in service If he doesn't have a break in service, no hours are credited. Is that what your document actually says?

What is the plan’s definition for an hour of service? Does it include an hour for which an employee is paid (or entitled to payment) “on account of a period of time during which no duties are performed” because of a layoff? 29 C.F.R. § 2530.200b-2(a)(2) https://www.ecfr.gov/cgi-bin/text-idx?SID=41f0127c8a6a1ed75938128d32b82deb&mc=true&node=se29.9.2530_1200b_62&rgn=div8

Same here! But I would rather have been wrong and know it, than be maybe right but have no idea.

I vote for no reporting, and booking only the $25k deferral and ignoring the four cents.