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no ifs needs: let A1 = pay, let B1 = deferrals match = min(A1*.025, B1*.5) + min(A1*.015, B1*.5) use a round function on it, but that's messier to type out here. You essentially have 2 matches layered on top of each other. 50 percent on the first 5, plus 50 percent on the first 3.

=(MIN(D3,3%)*C3)+IF(D3>3%,MIN(MIN(D3,5%)-3%,2%)*0.5*C3)

Here is a basic SHM spreadsheet I came with a while ago. Feel free to use it. No warranties or guarantees of any kind implied or given. Though, if you look at the examples in there, the calculations fur under 3%, between 3-5% and over 5% come out correct. Safe Harbor Match Calc.xlsx

Compensation is in B2, deferral amount is in C2 Put the deferral rate in D2: =ROUND(C2/B2,4) The calculated match rate in E2: =IF(D2<.03,D2,IF(D2>.05,.04,.03+.5*(D2-.03))) The match in dollars in F2: =ROUND(B2*E2,2)

When was the distribution taken? If it was taken in 2021, would it be possible to "undo" the distribution and just cancel it, including the withholding? If not, I don't think you can just re-deposit the funds back into the account as after-tax contribution because that is up to the client to report it as after-tax, you can't just ear mark that amount as "after-tax". At my previous company we had a suspense account that held all these types of funds. Eventually, the funds would get escheated.

May be I am not seeing but are the DB plan benefits are fully accrued i.e. 10 years of participation? There is no more room for further benefit accruals? No room for salary increase possibilities? Remember that the 415 lump sum limits go up every year. It is possible to eat up some overfunding in the next couple of years. They need to cool off on the investments. If they transfer to a QRP, with minimal salaries and no deductions, 500k can easily be spent in 7 years, assuming no crazy returns. You only need to worry about 415(c) limits.

Very sorry to hear this. Lou and I went way back. All the way to the same dorm at the University of Michigan. Rest in peace.

Thanks for posting. RIP

If they were withheld but not deposited yet, they are late and subject to earnings back to the point they were due to be deposited.

I did not know about Lou, thanks for posting. I first met him when he was working for Brian Demsey + Associates. RIP.

Are they requesting a cash distribution or a rollover? If they are requesting cash, then it's fine. If they are requesting a rollover, then there is the possibility that they could fail to take their RMD if they terminate before 12/31/2021. In order to avoid that possibility, they should take at least the amount that their 2021 RMD would be, if 2021 were a distribution calendar year, based on their account balance at 12/31/2020 and their current age, as a cash distribution and roll the rest over. It might help to remind the participant that if they fail to take their RMD there is a substantial excise tax that they would be responsible for. If they ultimately refuse to take enough of their distribution in cash, and it later turns out that a 2021 RMD is required, then a corrected 1099-R should be issued showing the RMD amount as a taxable distribution and only the remainder as eligible for rollover. The participant would have to be notified that $X amount of their distribution was not eligible for rollover and should be removed from their IRA.

The monthly increases to age 70 are based on when you start your benefit, not when you stop working. Prompt distribution of the 401(k) plan account could help the individual wait to start receiving soc sec benefits. As Mike said, there are a lot of variables. Certainly, if an individual has less than 35 years of earnings, they should think hard about whether they should continue to work. Basically, anyone in his/her 60's should establish their soc sec account online and look at their earnings history and think through some "what-ifs."

Question withdrawn. I was given incorrect information by the person who asked the question. In fact, a refund was processed for 2019 and one is in progress for 2020 as well.

If the balance is over 5,000 then the non-responsive would indeed need an annuity as well.

Assuming that the plan uses the maximum permissible cure period then I believe you are correct. Given the flexibility for self-correction of loans under the current version of EPCRS, they could probably restart payments and keep the loan going even if the cure period had expired.

1) Yes, but the entire suspense account has to be used up within 7 years if they want to avoid the excise tax on the reversion. The amounts allocated are still subject to the annual additions limit, so if it's just the two of them, and they are allocating (let's say) $35k each per year that ends up as only $490k allocated after 7 years. Make sure you will be able to fully allocate the amount before you transfer it. 2) No. Assuming that they take a distribution equal to the max lump sum, that is by definition the present value of their 415 limit. The 415 limit is a lifetime limit so any distribution they take now permanently reduces the future benefit they can receive from any DB plan sponsored by the same company (or controlled group etc). If they take the max lump sum there would be zero 415 limit left so no additional benefits could accrue under a new plan.

This is correct. You do not need to make any changes to the safe harbor. Just give a 3% PS contribution to the HCEs. Assuming, of course, that the plan's PS formula allows you to do so.

Just because somebody "retires" doesn't mean they will start Social Security. Besides, the decision to retire at any age is subject to so many individual data points there is absolutely no way you can state that it doesn't make sense. You just don't know.

I would worry more if the place holder were 666.

My guess is that the 999 was meant as a placeholder by whoever programmed the website. I would be very surprised if 999 turned out to be an accurate number.

Pammie57, completely agree with EBECatty, but if for some reason they really don't want to cover these employees with a 401(k) for a year, even just deferrals, they can terminate it.

Yes, you can use the corrective amendment rules of 1.401(a)(4)-11(g) to correct a failed non-discrimination test. However please read your plan document carefully. Most plan documents I have seen provide for an automatic waiver of the last day and/or hours of service requirements as needed to pass the gateway test. This would usually apply only if the participant was otherwise eligible for a contribution that would require them to be included in the test, such as a top heavy minimum or a safe harbor non-elective contribution.

Generally plans can be (and often are) terminated in connection with a sale without any prior participant notice. Of course, it's always better to have a clear approach going into it so everyone is on the same page. There may have been one that has not been communicated to you (not sure your role in the process). If the plan was not terminated by a resolution effective before the stock sale closed, there will likely be a successor plan issue as I assume the buyer (or another member of the buyer's controlled group) has or will start a 401(k) plan. The seller's plan may need to be merged into a plan of the buyer.

1.414(v)-1(g)(3): "catch-up eligible participant" = "employee," blah blah 1.414(v)-1(g)(4): "employee" defined in 1.410(b)-9 1.410(b)-9, definition of "Employee": "...individual who performs services...who is either a common law employee...a self-employed person...treated as an employee pursuant to section 401(c)(1), or a leased employee..." (emphasis supplied).

The other potential source of this "uneducated" opinion sometimes comes from someone being dangerous enough to read the plan document and seeing "W-2 income" elected, and not knowing that the definition also includes earned income. FWIW