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I have learned more on these boards than any credential program I have gone through. Those programs are excellent, but it is impossible for them to cover the amount of information that comes through these message boards. There are some incredibly intelligent commenters that I have come to trust over the years (I know that is scary based on a message board, but it is true). They have helped me more than they will ever know and I am grateful to them (all of you!!). Thank you!!!

Remember that the name of the plan can essentially be anything they want. We had a client that just wanted "Retirement Plan" so that's what we used in the documents and on the TIN application. Everything has worked fine. Also had another large professional group (doctors) where the firm name was consistent, but turnover in the ownership group. They made an application to the state board of financial institutions and received approval for the entity to be the trustee on the plan. Rare, but worked out well. They could also just choose to go the corporate trustee route. The cost is likely much less than fees for plan/trust amendments and their time dealing with it.

IRS testings rules limited the deferrals of HCE like you in your Plan to $X. You deferred $Y. You are receiving a refund of $Y-X. IRS requires earnings to be allocated to refunds. Your earnings were Z%. The earnings on your refund is (Y-X) * Z.

But only if that’s what the plan document says to do.

EPCRS and the ADP test are blind to whether a deferral is pre-tax or ROTH eligible, and combine all deferrals into one calculation. The QNEC is an employer allocation(and therefore pre-tax); it will go into an 100% vested Employer source(even if the Plan does not have another Employer source the document allows for QNECs by default), not the deferral source. If the ADP is 2.25% then 25% is .5625%, doing both as you describe would be a 50% QNEC.

Thanks for the replies, it turns out the whole account is part of the principals account balance.

I guess we can forgive you for being a relative newbie - but the DOL's insistence on a VFCP filing - as known by for those with more experience - goes back a good decade or more. If that was meant as a political statement, then you clearly are in the wrong place....

What does this have to do with anything?

Yeah - the DOL does a lot of good things, and they do a lot of bad things albeit with good intentions. And then there is this - which is both mentally arthritic, and actively obnoxious. Someone who was in charge of this should have their head handed to them on a platter. A classic example of regulatory overreach.

If they later turn out to be a 415 violation, correct them thusly.

Partners get K1s, independent contractors get 1099s, but that doesn't mean the entity(ies)/employer(s) are going it right. Who is (are) the employer(s), what is the tax structure, who are the owners, do they have earned income or compensation from the employer and who are the employees? If you have multiple employers, what is the relationship between them? Answer those questions and then you can determine the retirement plan options. And if the income reporting does not properly match the corporate tax structure, you inform them thusly and if they have no interest in proper accounting you punt, not worth the headache IMHO.

Whomever is giving you this "thinking" doesn't need to be advising on the technical side of retirement plans.

If I were the employer, I'd tell them that the reason they are getting a refund is because they are getting paid a LOT - and to start behaving like someone worth that much money.

Always the first and best advice - RTFPD! (Would probably significantly reduce the number of questions we see in this forum.)

I've been accused of talking to myself before but in this case no. I was responding to your "first time I..." question.