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I was thinking the other way. Your first post intimated that only the new participant needs a top heavy contribution; you didn't say "all" participants. Rev Rul 2004-13 specifically addressed dual eligibility. The plan loses TH exception if there is dual eligibility for SH match. See Situation 4. rr-04-13.pdf

Just out of curiosity, what is the profit sharing formula? Is it grouping method? Pro rata? Integrated? Why not just make it grouping method with everyone in own group. This way you can just do away with stated conditions for a PS and artificially add them in as needed.

This isn't something you can choose when you do testing. The plan document contains the definition of HCE with respect to whether the top paid group election is made or not. You have to use the definition in the plan document.

A plan can switch from using the counting-hours method to the elapsed time method for vesting service. However it cannot reduce any participant's vested percentage. If the OP had already worked enough hours to earn a year of vesting service under the old schedule, the change could not then make him wait until his anniversary date to keep that vesting. We don't know exactly when the switch happened, or how many hours were required under the old schedule, so this may or may not be a concern. However, the company's HR department represented to the OP that he was 100% vested, and he relied upon that representation. If the plan was properly amended and OP was not actually 100% vested, then that representation would not create an obligation for the plan to make him vested, however it could create a liability for the company who gave him incorrect information. That could explain why they are trying to settle with him outside the plan.

Does SECURE allow you to use the business extension for starting a new plan if the business tax year and the plan tax year don't match?

Maybe it is me but your question is confusing. Are they changing the company name or the company and plan name? There is no need to amend the plan document if the company name is changed. There is no requirement the plan's name changes if the company's name changes. If they are actually going to bother changing the plan name then I would assume that would take an amendment as that is defined in the document. That strikes me as a waste of time and money to do. I have seen companies that close down change their name from XYZ, Inc to XYZ liquidation (or close down) corp. and not change their plan name. So maybe a little help on what you are asking is in order. Are you just worried about the 5500?

If they are HCE, they get tested as HCE. That simple. Is it advantageous to them to use the top-paid group election? that is have only 2 HCE? And remember, when using the TPG, that is ONLY for the compensation test. So, if you have employees who are earning more than either of the the owners' plan compensation, then you may wind up with more HCE than 2.

Nope. But why should the Plan Administrator be tasked with determining (or questioning) this? If it is done pro-rata, seems like that question takes care of itself?

Yes. But when a new employee is hired, the new employee will need a top heavy contribution because the plan is top heavy. Talk about a time sucking plan.

Code Section 416(g)(4)(H) is ambiguous to me. However, Rev. Ruling 2004-13, especially Example 1, makes clear that one interprets the top-heavy exclusion based on whether other contributions (including forfeitures allocated as contributions) are made. So I agree with C.B. Zeller that the plan does not lose the top-heavy exclusion if it permits employee after-tax contributions but none were made.

The plan does not lose the top heavy exemption unless any contributions other than deferrals or safe harbor contributions are actually made for the plan year. For example, a plan can permit profit sharing contributions, but if none are actually made, it can still use the top heavy exemption. In your case, if no after-tax contributions are made for a given year, then the top heavy minimum would not apply.

I can't imagine a Plan Administrator would ever want to take on that burden of picking. As for the participant if the document doesn't give them the power to pick I would say "no". I have never seen a document that gives such power to a participant. I can't cite anything but that would be my answer every time.

You can absolutely add it for 2022. I'd probably want to do it before 2022 starts but as long as you do it before anyone works 1000 hours in 2022 you could still do it then.

If you don't file the 2020 return you'll double your problems by having two years that didn't have timely returns filed. Best to file the 2020 return now imo and minimize the issues.

It sounds to me like the plan originally determined vesting based on the counting hours method, and then the plan transitioned to Fidelity with its prototype plan document that uses elapsed time for vesting. Same result as what 30Rock stated.

The cash balance plan can be aggregated with other plans of the employer to pass testing. An executive cash balance plan is quite common.

Or did the plan rules change to anniversary year at some point and Fidelity was correct, she was not fully vested. Just poor communication? In which case I can see why they want to pay her outside the plan since it may not be a plan error.

As long as the EIN and plan number are correct, I wouldn't lose sleep whichever way you do it.

The top-25 rule does not depend on the plan's AFTAP per se. There is an AFTAP-based lump sum restriction, but it is different. The top-25 HCE rule is found in 1.401(a)(4)-5(b)(3). For this purpose, the restricted employees are the top 25 current or former most-highly paid HCEs. The rule is found in the 401(a)(4) regs and the definition of HCE is the usual definition for 401(a)(4) purposes. However, this entire paragraph in the regulations is under the heading "pre-termination restrictions." This rule is not usually meaningful upon plan termination, since you have to pay these people out regardless. If you are offering a window prior to plan termination, that might still fall under pre-termination, though.

The lawyer in me is going to come out here (my apologies, in advance), but I think doing so (with one exception) is stupid. It's hard enough to get employers/plan administrators/recordkeepers to read a document, and making it difficult for them to see the whole thing in one place aggravates that problem. That said, "legally" I think is permissible - but it may eliminate reliance on any determination/opinion letter issued for the document. The one exception - and one I've used myself - is with respect to a collectively bargained plan, where the contributions are defined by what the CBA specifies - which may change from time to time independent of the plan document.

For cross-tested plans I believe each eligible NHCE must have an allocation rate that is not less than the lesser of 5%, or one-third of the allocation rate of the HCE with the highest allocation rate.