Leaderboard

The 402(g) limit is always a calendar year limit. No need to prorate it. The 415(c) and 401(a)(17) limits may be prorated for a short plan year, although not necessarily for an initial short plan year. Check your plan document to see if it has special language about an initial short plan year.

Are they getting SHNE? If so, they have to get gateway also.

In for a penny (3%), in for a pound (gateway rate)

Maybe plan sponsors will no longer list their spouses with 1000 hours every year only to justify their deferring. Put them in at 501 and it's more believable, too. I'm sure we've all seen the spouse deferring 92.35% of pay and attempting to ruin a perfectly good average benefits percentage test.

So austin3515 finds something to like in the long-term-part-time provision?!

There is a requirement for a separate accounting for NECs, pre-tax elective deferrals, Roth deferrals, rollovers, after-tax contributions, QNECs... to be able to administer vesting rules, availability for withdrawals, and tax basis among other things. There is no requirement for maintaining separate investment accounts. The rules for crediting income to each sub-account must be clear since income factors into determining taxable versus non-taxable amounts upon distribution. The biggest pitfall is when the recordkeeping system is not capable of tracking the separate accounting (including separate basis for some of the accounts). Trying to compensate with a manual accounting process is very time consuming (no matter how proficient one's spreadsheet skills may be).

Yes all eligible employees will be getting a SHNEC

The concept of specifying the order in which forfeitures is okay but be careful about where you put the "re-allocate to participants" choice. I recommend putting it at the bottom of the list. Re-allocating forfeitures is treated the same as if the employer made an employer contribution which can impact things like NEC coverage, gateways, top heavy contributions, creation of a lot of small balance accounts and more. Include items like restoration of forfeitures for rehires, corrective actions including QNECs, and other similar situations where an employer puts money into the plan. It also makes sense to prioritize match contributions over NEC contributions.

I suggest the correct way to look at it is a Schedule R is required whenever a plan must report information on any line on the form. The Schedule R has an array of topics that apply to specific types of plans or to specific circumstances. It is possible for a Form 5500 not to be required to attach a Schedule R, but this has become unlikely. The requirement to report the opinion letter number for a pre-approved plan will by itself cause the vast majority of plans to have to attach a Schedule R.

Yes, being very very very kind.

LOL... 99.99% bad, .01% good 🤣

Yeah the rollout of their new platform has been less than stellar to be kind about it.