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The LTPT rules only allow for them to defer. has nothing to do with eligibility for match,

Luke: I have seen this exact issue in the past. A non-safe harbor plan was established late in the year and the owners max deferred. They failed the ADP test and got most of their money back, plus the plan was top-heavy so the employer made a 3% top-heavy to the non-keys.

Assuming the document is drafted appropriately (and this is in at least some IRS pre-approved documents) you can exclude "part time" or "temporary" or "seasonal" employees, BUT, if any such employee actually completes 1 YOS (1,000 hours) they will no longer be a member of such excluded class.

Others may disagree, and this is likely gray enough to get ERISA counsel involved, especially if the employer and affected populations are relatively large, but I think that employees who are "on call" and/or "per diem" may be different than your standard part-timer and not an hours-based exclusion. I have had clients categorically exclude such, and without regard to actual hours worked, so per diem employees who happened to work more than 1000 hours in a year were still not benefit eligible. However, if the employer's industry is such that employees frequently shift into or out of on call or per diem status, monitoring eligibility compliance is a pain to say the least. I actually had a client reverse that exclusion because administration was not worth the trouble relative to the cost savings. It was a situation that required balance between corporate finance (cost), HR philosophy, administrative burdens and risk management (compliance). Another note regarding on call status - if employees are paid (albeit at a reduced rate) to be on call during specific times, then those hours must be credited. For example, say a nurse is paid $10/hour to be on call 24 hours over a weekend, (s)he gets credited for 24 hours whether called in to work 0, 4, 8, 12 or whatever hours - of course you don't double count with hours actually worked. This obviously doesn't apply if these people are excluded. Good luck, this is not a trivial cut and dried issue and unless it would yield substantial savings is probably not worth the time and effort chasing down that rabbit hole, in my opinion.

Likely SOL means something different for the client in this scenario.

Here’s the statute: ERISA § 413 [unofficial compilation 29 U.S.C § 1113] Limitation of actions No action may be commenced under this title [I] with respect to a fiduciary’s breach of any responsibility, duty, or obligation under this part [4], or with respect to a violation of this part [ERISA §§ 401-414], after the earlier of— (1) six years after (A) the date of the last action which constituted a part of the breach or violation, or (B) in the case of an omission the latest date on which the fiduciary could have cured the breach or violation, or (2) three years after the earliest date on which the plaintiff had actual knowledge of the breach or violation{;} except that in the case of fraud or concealment, such action may be commenced not later than six years after the date of discovery of such breach or violation. http://uscode.house.gov/view.xhtml?req=(title:29%20section:1113%20edition:prelim)%20OR%20(granuleid:USC-prelim-title29-section1113)&f=treesort&edition=prelim&num=0&jumpTo=true For subsection (1)’s statute of repose, an action based on a fiduciary’s decision initially made more than six years ago is not completely barred if a fiduciary breached a duty to review earlier decisions. For subsection (2)’s statute of limitations, court decisions split on whether “actual knowledge” is just actual knowledge of the facts that constitute a breach, or actual knowledge that the facts constitute a breach. For either interpretation, the Supreme Court held “actual knowledge” means the plaintiff actually knew the information. Section 413’s last phrase refers to “fraud or concealment”. At least one appeals court opinion interprets “concealment” not to require evidence of a fraudulent intent. That opinion did so by looking to the common law of equitable remedies. Further, the idea of preferring an interpretation that doesn’t treat any word of a text as meaningless or irrelevant supports such an interpretation. Also, the Secretary of Labor’s ERISA § 504 investigation powers are not limited by ERISA § 413. First, one would not know when a statute-of-limitations period ends until one had completed the investigation of the facts. Further, even if the facts found do not support a timely action grounded on a fiduciary’s breach of its responsibility to the plan, there are several other kinds of legal and equitable relief the Secretary might pursue that would not be constrained by the six-year statute of repose.

ERISA 413, earlier of six years after the date of the last action concerning the breach or three years after the claimant had actual knowledge of the breach. Yes, I've seen action against ESOPs 10-15 years after for allowing the seller to be paid too high a value for their stock. Argument was that the leveraged loan was an ongoing breach and that the clock hadn't started on the SOL nevermind when the buyout payment was actually made.

Although most people's usual convention, there is no requirement to order plan numbers sequentially according to their effective date or the date actually adopted.

Agree with you both. No 2022 RMD under any scenario. Keep in plan, subject to plan provisions but very likely no RMD until participant's RBD. R/O to inherited IRA, no RMD until participant's RBD. R/O to own IRA, RMDs begin 2023 based on spouse age. And if the company/product wanting my R/O was insisting on the plan paying an RMD first, I would find someone more knowledgeable of the rules to take my money thank you very much.

100% agree - if exclusion was a reasonable job classification then permissible provided such resulting "plan" satisfies coverage. However, any hours-based classification, specific or "veiled", is not considered reasonable per IRS.

You can exclude reasonable classifications of employees provided you pass IRS nondiscrimination testing. Typically 410(b) coverage in this situation. I believe an exclusion of "less than 30 hours per week" is not considered a reasonable classification by the IRS and is not allowed.

Interesting question. Others may be able to provide some more nuance, but my recollection is that a repayment in a later tax year is treated as a separate "transaction" such that the first year would be unaffected, i.e., they are repaying with entirely "different" money. If a repayment is made during the same tax year, I believe it's not reported on the employee's W-2 at all, i.e., it's as if the payment never happened. In the later-year scenario, I would think the deferral pretty clearly stays in the plan. It was compensation paid, withheld from, deferred from, taxed, and reported in one year. The employee just happened to pay the employer 50% of the bonus amount from their other assets in the next year. (The individual income tax treatment of that scenario is complicated.) In the same-year scenario, my initial reaction would also be to keep the deferral in the plan. The payment was "compensation" when paid to the employee at the time of deferral; it's not as if it initially came from ineligible compensation, e.g., if the plan stated that participants could not defer from bonuses at all. Could depend on the plan's definition of compensation as well (3401(a) may be an easier argument than W-2).

Other than it being a quirk of how the plans were adopted, I don't see a problem if that's what you are asking.

The participant has not reach RBD so no RMD is due for 2022 under any set of rules that I'm aware of, if the product insists, have them produce a citation for their position that is more than "because we said so". What the plan allows on death and what elections the spouse makes will determine when RMDs must start for the spouse. My memory matches up with Belgarath with pretty much the same caveats about SECURE Act changes possibly clouding the issue. I "think" to extend the RMDs as long as possible the spouse could roll the funds to an Inherited IRA and delay RMDs until the participant would have reached age 72. I believe this part of SECURE changes is the same as pre-SECURE for spousal beneficiaries. If she elects to treat the IRA as her own, then RMDs would begin the first year following when she has a balance on 12/31 of the preceding year. So if she roll it to an IRA in 2022 in her name, then RMDs would start in 2023. If the money is left in the Plan, RTD on options available and payout timelines for beneficiaries.

I think (and I say think, cause I'm not sure - the SECURE Act confused this stuff, and I've been fortunate enough not to have a real case yet) that there is no RMD. Assuming the spouse is the 100% beneficiary, I believe the surviving spouse can roll over the entire amount, and does not have to take RMD's until 12/31 of the year the participant would have attained age 72, even though in this case that means no RMD's until the surviving spouse is about 87. Seems like a crazy result, but that's my "memory" on this. But, as I said, that's based on memory and I haven't specifically researched it. Probably wrong...Good luck!