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The rule is that you use the balance on the last valuation date in the calendar year immediately preceding the distribution calendar year, with adjustments. For the 2021 distribution calendar year, you would use the account balance as of the 9/30/2020 valuation date. Increase it by the amount of any contributions allocated to the participant's account, or decrease it by the amount of any distributions made from the participant's account between 10/1/2020 and 12/31/2020.

Or, at least I think the site is wrong in this case. On the page Is my 401(k) Plan Top-Heavy? (https://www.irs.gov/retirement-plans/is-my-401k-top-heavy), the section titled "Making Minimum Contributions..." it says: "If the average contribution for all key employees is less than 3%, non-key employees also receive that lower percentage instead of 3%." I do not believe it's the average, but the HIGHEST Key EE contribution that is considered here. So, I have one Key EE with a contribution of 2.5% and another with 1.5%, the the TH minimum is 2.5%, not 2%. So who do I contact at the IRS to ask about it? (Or am I really wrong? I consulted Treas Reg 1.414-1 M-7 and the EOB Chap 3B Sev IV Part A.2 which seem to agree with my position)

So, back to BG's original question as to how to get it corrected, now we know - post it on BenefitsLink!

The webpage now states: "If the highest contribution percentage for a key employee is less than 3%, non-key employees receive the highest percentage for a key employee instead of 3%." And the webpage now notes “Page Last Reviewed or Updated: 16-Nov-2021”.

You are correct. If you are an ASPPA member you may want to contact the Government Affairs Committee. I am confident they would get your find to the right people.

Correct, plan is not considered terminated and must be restated. See Rev. Rul. 89-87.

So that employees are able to make a fully-informed decision about deferring for the upcoming year based on the match. Yes. For this reason, we continue to issue safe harbor notices for all of our clients, whether they are making safe harbor nonelective or matching contributions.

shERPA - the cynic in me says the IRS will say that such publications can't be relied on as official guidance, and they will stick it to you anyway!

I think you're right. But the cynic in me says to capture that screen for posterity and not point it out to them. Could come in handy if I ever have a client who was a bit short on their TH minimum.

The end of this thread addresses a similar question. Once you file an incomplete filing you are deficient, not delinquent (I confirmed this when I spoke with the Office of the Chief Accountant years ago); therefore, DFVCP is not an option.

A. What is your role in this (more bluntly, how do you not know)? B. If it is profit sharing then I don't see how it is excess. Profit sharing would be an optional contribution and once made, generally not recoverable. Who said it was "excess" and what did they mean?

To me, that was the point of the thread...you won't find any black/white answers. Safe approach is the limit the deduction for 2021, aggressive approach is don't. This should not be your call. Present the facts as known to the plan sponsor and their accountant and let them make the call.

If the absorbed organization discontinues and terminates its 401(k) plan, no severance-from-employment is needed, and the plan pays its final distribution as an involuntary distribution (even to those participants who have not reached any retirement age). A single-sum final distribution paid or payable in money should be eligible for a rollover into any eligible retirement plan, including a 403(b) plan. No alternative defined contribution plan. A distribution may not be made under paragraph (d)(1)(iii) of this section [plan termination] if the employer establishes or maintains an alternative defined contribution plan. For purposes of the preceding sentence, the definition of the term “employer” contained in § 1.401(k)-6 [which further cross-refers to § 1.410(b)-9, which includes aggregations under sections 414(b), (c), (m), and (o)] is applied as of the date of plan termination, and a plan is an alternative defined contribution plan only if it is a defined contribution plan that exists at any time during the period beginning on the date of plan termination and ending 12 months after distribution of all assets from the terminated plan. However, if at all times during the 24-month period beginning 12 months before the date of plan termination, fewer than 2% of the employees who were eligible under the defined contribution plan that includes the cash[-]or[-]deferred arrangement as of the date of plan termination are eligible under the other defined contribution plan, the other plan is not an alternative defined contribution plan. In addition, a defined contribution plan is not treated as an alternative defined contribution plan if it is an employee stock ownership plan as defined in section 4975(e)(7) or 409(a), a simplified employee pension as defined in section 408(k), a SIMPLE IRA plan as defined in section 408(p), a plan or contract that satisfies the requirements of section 403(b), or a plan that is described in section 457(b) or (f). 26 C.F.R. § 1.401(k) 1(d)(4)(i) https://www.ecfr.gov/current/title-26/chapter-I/subchapter-A/part-1/subject-group-ECFR6f8c3724b50e44d/section-1.401(k)-1#p-1.401(k)-1(d)(4)(i). In a situation of the kind described, some charities and practitioners might consider designing and documenting both plans so the default on a non-instructing participant’s involuntary final distribution is a rollover into the absorbing organization’s 403(b) plan. See 26 C.F.R. § 1.401(a)(31)-1/Q&A-7 https://www.ecfr.gov/current/title-26/chapter-I/subchapter-A/part-1/subject-group-ECFR6f8c3724b50e44d/section-1.401(a)(31)-1. Although that is not a merger, it can have some practical effects that achieve an employer’s goal of maintaining one individual-account retirement plan. Some participants choose against a rollover, and some choose a rollover to a retirement plan other than the default. But I’ve seen situations in which 80% to 99% of the terminating plan’s amounts became rollover contributions (not a merger or transfer) to the “suggested” plan.

The employees can't be considered to have terminated employment. However, their 401(k) plan can be terminated. At that point, they will need to take a distribution which they can roll over to the 403(b) plan if they want to. There is no rule that prohibits a rollover of an amount obtained on a plan termination to another plan of the same employer. Code section 401(k)(10)(A) and Treas. Reg. § 1.401(k)-1(d)(4)(i) provide the rule that you can't terminate a 401(k) plan and distribute assets if you have an alternative plan. However, Treas. Reg. § 1.401(k)-1(d)(4)(i) specifically provides that a 403(b) plan is not an alternative plan for this purpose.

Correct. The only reason notices were eliminated for the SHNE is because employees did not need to do anything to receive those contributions, and the powers that be finally came to their senses after years of having to notify participants that they were getting 3% in the coming year (again) whether they contributed or not. Since matching contributions require employee deferrals, annual notices make sense - otherwise, how many doctor/owner plans would you see where "strangely" it was only the doctor with deferrals and safe harbor match?

No. Any SH Match (basic, enhanced, basic QACA, enhanced QACA) MUST get the notice. At least that is my understanding of the rules and the chart I got from the FIS seminar we did in September.