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The minimum funding standard of sec. 430 applies regardless of the owner's salary. Whether a minimum required contribution exists for a given year for a given plan is a question for the plan's actuary.

Here’s a rhetorical question about the two business owners and the certified public accountant: If several third-party administrators told the CPA the desired design is okay, why have the business owners not implemented the design with one of those TPAs?

I found this confusing at first and then after re-reading and thinking about so more came to same conclusion as CBZ.

One of our client's has an individually designed profit sharing plan and non-vested balances were forfeited after 1 year break in service, so yes, it is permissible.

Not sure what you're driving at with the assumption language, but I've copied the DOL guidance below for reference. One of the conditions for avoiding ERISA status is that the employer not represent the HSA as an ERISA welfare benefit plan, so I wouldn't put HSA materials in an ERISA SPD. HSAs are not viable in the hypothetical they are subject to ERISA (not sure any ERISA HSAs actually exist). https://www.dol.gov/agencies/ebsa/employers-and-advisers/guidance/field-assistance-bulletins/2004-01 As noted above, HSAs are personal health care savings vehicles rather than a form of group health insurance. ... Accordingly, we would not find that employer contributions to HSAs give rise to an ERISA-covered plan where the establishment of the HSAs is completely voluntary on the part of the employees and the employer does not: (i) limit the ability of eligible individuals to move their funds to another HSA beyond restrictions imposed by the Code; (ii) impose conditions on utilization of HSA funds beyond those permitted under the Code; (iii) make or influence the investment decisions with respect to funds contributed to an HSA; (iv) represent that the HSAs are an employee welfare benefit plan established or maintained by the employer; or (v) receive any payment or compensation in connection with an HSA. 2023 Newfront Go All the Way with HSA Guide

Nah, once you blow past 20,500 any deferrals start filling that catchup bucket.

If an employee worked 83.33 hours in April of 2022, the entry date maybe October 1, 2022.

The HSA is not a group health plan subject to ERISA, so there generally are no SPD terms addressing HSAs. It's really just a tax vehicle. Employers definitely have been making more efforts in recent years to communicate HSA features, strategies, and eligibility issues at OE, etc. both as a service to employees and to make sure employees are informed about these concerns. Also because the HDHP is often the best plan option from a cost perspective for both parties.

Aaargh! And here I was hoping we didn't have to worry about LTPT until 2025. And FWIW, I just had your interpretations confirmed by a "big name" in this business. I hadn't read the actual Section until you brought it up, and sadly, I had to agree. I liked the summary I had read earlier, (which just pushed it off until 2025), a whole lot better...

Internal Revenue Code of 1986 § 401(k)(14)(C) allows relying on a claimant’s certification “that the distribution is on account of a financial need of a type which is deemed in regulations prescribed by the Secretary [of the Treasury] to be an immediate and heavy financial need, and not in excess of the amount required to satisfy such financial need, and that the employee has no alternative means reasonably available to satisfy such financial need.” SECURE 2.0 § 312 [attached]. If the hypo’s mention of a facts-and-circumstances hardship provision refers to an evaluation beyond the seven needs 26 C.F.R. § 1.401(k)-1(d)(3)(ii)(B) deems “an immediate and heavy financial need”, § 401(k)(14)(C)’s tolerance for relying on a claimant’s certification does not apply. Further, even if the plan allows only deemed hardships and adopts § 401(k)(14)(C)’s self-certification regime, one doubts § 401(k)(14)(C) would protect ostensible reliance if the human who acts for the plan’s administrator is the human who submitted the claim and its certification. In those circumstances, if the certification was false the Internal Revenue Service might plausibly assert that the plan’s administrator “ha[d] actual knowledge to the contrary of the employee’s certification[.]”

Off course!

Any reasonable classification is fine from the plan perspective but I can see your general labor law discrimination concerns. I would find out the specific name of the program and use that as the exclusion. Even if it only includes one nationality I don't think you have an issue. If these employees become permanent and "graduate" from that program, then they join the eligible class and would likely participate immediately based on their prior service which could not be discounted.

My best understanding at this point is that employees who worked 500 hours for 3 consecutive years from 2021 through 2023 will enter plans on 1/1/2024. Then, employees who work 500 hours for 2 consecutive years 2023-2024 will enter plans 1/1/2025, and any two consecutive years after that will enter the plan the following year.

The 6,500 in catchups don't count towards the 415(c) annual additions limit. So that total is really just the 20,500 plus 1,100.

Given that age 75 becomes effective 10 years from now, that's probably a safe bet. I'll be willing to take bets it won't happen in the next two years, though.

My read of 414(v)(7)(B) is that if you have any participant who is at least age 50 with compensation above the limit, then you have to allow Roth if you want to allow catch-up contributions at all.

I've always sent them in UPS or Fed-ex and have not had a problem. Knock on wood. But yes electronic filing of 5558 would be a welcome change.

I don't think it's too late. Check out https://www.irs.gov/retirement-plans/irs-penalty-relief-for-dol-dfvc-filers-of-late-annual-reports and the referenced authority (Notice 2014-35). As long as you satisfy the DOL's requirements for DFVCP the IRS should waive penalties. It may require some correspondence and/or phone calls to IRS since the client is this late into the process with IRS.

Well, this is on the right track but technically there is not 6,500 in catch-up. That's the limit but not in this scenario the amount to be treated as catch-up. Assuming the W-2 salary of $27,500 is also compensation for 415(c) purposes under the terms of the document, then the breakdown is: regular deferrals of 26,400, match of 1,100 for a total of 27,500 included in the annual additions testing, and 600 treated as catch-up.

Under SECURE 2.0 self-certification rules, effective now, I think the plan is off the hook. I don't know what the ramifications are to the participant for misrepresenting a hardship - they already incur taxable income and potential 10% premature distribution tax. Maybe any exception to that 10% tax that could apply is voided.