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Many (possibly most, I don't know?) IRS pre-approved plans provide for a consecutive month (not more than 12) with at least (not to exceed 1,000) hour requirement for eligibility. And as Lou suggests, if they don't meet it in the initial eligibility period (of less than 12 consecutive months) they are swept into the 1 Year of Service requirement. I see no problem with a 6-consecutive month/1,000 hour eligibility, as long as you have the "fail-safe." We have a couple of employers who use it.

IMHO I think the plan would still prepare a 1099-R for the outgoing funds as a direct payment distribution (if that's how it went out). It's up to the participant to report it properly and have the backup information when he files his personal tax return that he rolled it into a tax qualified vehicle within 60 days. No matter that he rolled it back into the same plan, that just reports as an incoming rollover to the plan. Again - this is just my opinion on how I would handle this situation. It's ultimately a wash if it all happened in the same plan year but I believe the plan needs to show it as it happened..... my two cents!

You can file an SS4 on line and get EIN almost immediately.

Need an EIN. Do not use a SSN. From the instructions to 5500-EZ

Not sure I understand the question. Was the lump sum distribution was paid directly to the former employee, with the check issued to the employee? If so, there was a taxable distribution with 20% mandatory withholding, and a 1099-R would be issued accordingly. There's no subsequent 1099-R when the individual then rolls to another IRA, or to another qualified plan. The participant would have to show the rollover on their individual tax return for the year in question. I'm wondering if there s some additional detail that you can provide, if there's something else you are really asking?

I think PW, as a 401(a) amount, is treated like a discretionary PS and negates any SH TH exemption. This seems a very odd TH situation, do you have a lot of Key EEs and/or they are getting sizeable PW? Providing TH likely means contributing only for non-Key, non-PW who are not contributing (enough) then, right?

You have deferrals with no plan. Amend the W-2 to show no 401(k). File an amended tax return for 2021. If they filed by April 15, too late to set up PS plan for 2021. If they were on valid extension but filed after 4/15 you could put in PS plan under secure with up to 25% employer contribution. Assuming their W-2 pay was at least $82,000 you could cover the $20,500 as employer contribution and the tax implications would be a wash (I think but I'm not CPA). Make sure he adopts a 2022 401(k) Plan (or amendment to SECURE adopted doc if you can do it) before he makes 2022 401(k) contributions.

okay Belgarath - you're correct, not all the details are there. Owner of 1-person plan took an allowed in service distribution. Adviser has informed me that, including the 20% withholding, he has rolled it back into the plan. david r - I never assume I know everything about a topic. In spite of my familiarity with 1099-R's, this situation has never come up with me (and I'm not excited about it either). They have asked me about their expected 1099-R. My asking about a second 1099-R didn't make sense since I've never seen one for a Rollover into a plan.

Yes and no. Agree that if the 414(s) arithmetic test fails because a pre-approved 414(s) definition of compensation is not used, then it is not a safe harbor plan. The consequence is potential disqualification for failure to follow the plan document (which states that it is a safe harbor plan), not to perform an ADP test.

I have had many employers continue to deferral elections from one plan to a new one. Make sure the plan document clearly authorizes this. Legal counsel for these employers have been split whether to treat this as auto enrollment (triggering both initial and annual employee notices) or not.

david rigby, thank you for your point that one considers the source's qualities. And thank you for your vote of confidence. But I have no appetite to be a designer of a software tool of the kind I imagined. If the lead designer and specifier were Derrin Watson, would you buy the software tool?

Pardon me, but is there a concern about the original question? The correct 1099 process should be very well-known at the TPA level. Shouldn't it?

RatherBeGolfing, I agree completely with Peter's thorough explanation of the concept. The plan applies Egelhoff and Kennedy, and is out of it. Peter's Circuit survey is undoubtedly correct, but I don't have as much command of that as he does. I can tell you that the cases I have reviewed where a state court did impose a constructive trust on the divorced spouse post-distribution involved an agreement as part of the divorce that the nonparticipant spouse was giving up his or her interest in the plan participant's benefit, but where there was no QDRO, since the nonparticipant spouse was giving up his or her interest. Although the beneficiary designation issue was not specifically addressed in the marital settlement, the court after the participant's death and following the distribution to the divorced spouse inferred that the parties' intent was that the divorced spouse was giving up his or her entire interest, e.g. in favor of the participant's children by an earlier marriage. The court then enforced what it saw as the parties' agreement in the marital settlement that the divorced spouse would not receive anything. In BG5150's hypothetical, I'm extrapolating, but if there were evidence that the sister and brother and the deceased had gotten together with the participant and the participant's lawyer when the will was being drafted (e.g., the unmarried participant was grievously ill in a hospice) and the parties had agreed that the brother would take the plan benefit, e.g. because the sister would get the participant's house, then it would seem to me that this could come close to the no QDRO divorce agreement cases.

Well...plan sponsors like to do strange things. The bonusses excluded from deferrals are sign on bonusses and a couple of different other types. The additional extra bonus excluded from SH match appears to be targeted to mostly the HCEs. My guess is for cost savings on the match My SH match compensation passes 414s. After doing some additional research/digging, I don't believe the deferral definition needs to pass 414s. So overall I think I am ok. 26 CFR § 1.401(k)-3 - Safe harbor requirements. (iv) Restrictions on types of compensation that may be deferred. A plan may limit the types of compensation that may be deferred by an eligible employee under a plan, provided that each eligible NHCE is permitted to make elective contributions under a definition of compensation that would be a reasonable definition of compensation within the meaning of § 1.414(s)-1(d)(2). Thus, the definition of compensation from which elective contributions may be made is not required to satisfy the nondiscrimination requirement of § 1.414(s)-1(d)(3).

The Prevailing Wage contribution will removed your "deemed not Top-Heavy" exemption.

I think you need to get new elections, there is no basis for defaulting to an election made under a plan of another employer that was terminated before it became part of the acquiring company. If they wanted to do something like that, it should have been discussed and determined during due diligence, and could easily have been accomplished by simply merging the acquired company's plan into the acquirer's plan. Why was that not considered? Also, and I could very well be wrong, but I don't think you're prohibited from terminating a 401(k) plan in this instance, it's just that the plan termination is not a distributable event and you must transfer funds to the successor plan. If they were worried about going to employees for new elections, wanting to treat as the same plan for them, then merging or terminating and transferring certainly is consistent with that philosophy. Regardless, those horses are already out of the barn and you need to give them all new saddles (deferral elections). IMHO

Yes, the RMD is always based on the prior 12/31 balance. The asset going down problem is why congress keeps waiving RMD requirements during times of sharp market down turns. The last time was 2020. I am doing this from memory but if the actual balance is below the RMD amount because of loss to the plan, and not a payment, there is a regulation that says you just take 100% of the balance. It has been a VERY long time since I had to look that up but it once happened to a client of mine.