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My first thought would be that of course the plan is exempt from 401(a)(26), since there is an exception for plans that do not benefit any HCEs and if the plan is restricted from benefit accruals due to its AFTAP then no HCEs are benefiting so the exception applies. But if you look at the reg (1.401(a)(26)-1(b)(1)), it says that the exception applies to a plan other than a frozen defined benefit plan which benefits no HCEs. If no one accrues a benefit then you have a frozen plan for this purpose and the exception does not apply. Since no benefits are accruing in the current year you would have to satisfy 401(a)(26) with respect to the plan's former benefit structure, in other words, on an accrued-to-date basis, which could still potentially fail.

I agree it should be however I'm not aware of any guidance that specifically exempts 401a26. Are you?the correction is the same sort of correction you would expect in order to avoid a 436 violation. That is, put money in the plan.

That's what I thought but I started second-guessing myself since top-heavy goes forward! I had tried to talk them out of giving up the safe harbor but they wouldn't listen. They now are facing big refunds plus the TH contribution. I will be having that discussion re: the retro safe harbor shortly. Thank you!

Yes, they have to make a top heavy contribution for 2020. Why would their 2019 status impact 2020? Seems like a bad decision to eliminate the safe harbor. Might want to consider the retro safe harbor if there are also testing issues.

Nothing in that statement changes anything I said. I'll spell it out: They could merge the plans, in which case no one has any rights to a distribution, except due to termination of employment (i.e. it is not a plan termination). The new plan would have to retain the annuity provisions on the old money. They probably don't want to do that. They could terminate the plan, in which case everyone has rights to distributions, but they don't get to roll over any unresponsive accounts, at least in my opinion. If they did somehow finagle this into a combo termination/merger, and I have never seen it, they would have to retain the annuity provisions on the old money.

I don't see why not. It sounds reasonable to me and I don't read anything in the law that would prohibit it. But wouldn't it be cheaper just to pay the top heavy minimum?

The plan can eliminate loans for all participants, even current participants, at any time. As you say it is not a protected benefit under 411(d)(6). If you eliminated them just for newly eligible participants I think you would have a problem since loans must be available on a reasonably equivalent basis to all participants.

Just received a note from an online retail vendor about FedEx deliveries: Maybe that explains it?

I highly doubt it, but you should ask the fund's attorney. Seems to me the fund administrator should pay it.

The compensation ratio test would only be needed if you want to exclude commissions from comp on the ACP test. If you are using total comp in the ACP test then it doesn't matter how you define comp for the match formula.

Remember the bonding requirements for non-qualifying assets.

Interesting. So you are saying other optional forms are available after separation from service, however, the only optional form available for an "in-service" distribution is a lump sum. I am not sure if that is kosher. Is this a volume submitter document? 1.417(e)-1(b) ... . A QJSA is an annuity that commences immediately. Thus, for example, a plan may not offer a participant separating from service at age 45 a choice only between a single sum distribution at separation of service and a joint and survivor annuity that satisfies all the requirements of a QJSA except that it commences at normal retirement age rather than immediately. To satisfy this section, the plan must also offer a QJSA (i.e., an annuity that satisfies all the requirements for a QJSA including the requirement that it commences immediately). I see this says "at separation of service", so maybe there is an exemption for "in-service". Possible, but not logical.

This is nice to know... thanks. I will be doing a 2018 Form 5500 filing in the near future, and will be using the 2020 (or even the 2021 form if really late).