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The Labor department has not changed that rule. 29 C.F.R. § 2510.3-102(a)(2)(i) https://www.ecfr.gov/current/title-29/part-2510/section-2510.3-102#p-2510.3-102(a)(2)(i).

That's a tough one since you could miss the April 1 RMD deadline if he doesn't back.

I understand that you are saying that Mr. Guy is not terminated but just not working, correct? If so, I would say that he is an active employee, so no RMD. Keep him high on the list of "always checking for". You never know what they will code for a term date if he doesn't come back to work in April of 2025. Just my two cents....

About the other plan: Consider that an unfunded deferred compensation plan “for a select group of management or highly compensated employees” might provide that the employer decides whether an employee is eligible or selected, and chooses this in its business discretion. Whether someone is a select-group employee is highly fact-sensitive, varying with many possibly relevant facts and circumstances. Yet, the risks of guessing wrong can be severe. Further, a plan’s sponsor might seek its lawyer’s advice about which forum would decide a claim that involves a question about whether the plan was sufficiently limited to “a select group of management or highly compensated employees[.]”

Hi @Bill Presson. Thank you. Yes, that is also what I was told by our NQDC rep also. He did say that it doesn’t happen often, but employees can sometimes be eligible for the 401(k) one year and no longer be eligible the following year and vice versa based on compensation preceding the new plan year.

Thank you both! Service requirement is 90 days and entry day is the first of the month after service requirement is met.

You and 401(k) provider are correct that new hires with lookback year pay below the HCE threshold are NHCEs initially and, if other eligibility criteria are met, if any, they should be eligible to enter that plan and defer until the first plan year in which they become HCE. Unless eligibility for the NQDC plan specifically excludes any employee eligible for the 401(k) plan, it is determined independent of that plan. Also, the determination of "highly compensated" for the NQDC is different and independent (I'll use HC). HC for that purpose is someone considered highly paid in the context of the employer, and someone could be HCE for 401(k) but not HC for NQDC, or vice versa but that is less likely. There is the 20% top-paid group election that can be made for 401(k) HCE. For NQ, there is no formal 20% rule but there has been IRS opinion (I think) that to be predominantly for the benefit of HCs a NQDC cannot cover more than 20% of employees. Your NQDC provider is correct in saying the employer must determine who is or is not in the top-hat group (select management and HC). If you use generic definitions, be sure that any management or compensation thresholds are not too low/too broad. In summary, new executives could be eligible for both the 401(k) and NQDC for their first (partial) year or two of employment. I hope this was helpful.

FWIW - my understanding is that the "30 day" notice is "deemed" reasonable. However, it doesn't necessarily preclude a shorter notice period if facts and circumstances are such that the shorter period is still "reasonable."

"A loan will be considered to bear a reasonable rate of interest if [the] loan provides the plan with a return commensurate with the interest rates charged by persons in the business of lending money for loans which would be made under similar circumstances.” - I always hated this regulation. There is really no other similar circumstance in the marketplace...

I think the underlying thought there to Cuse's point is that why would/should a company get a deduction for some OTHER company's ordinary business expense. One tax return blurs it all together, separate ones would not.

I would defer to the company's accountant, but if the consolidated company files a consolidated tax return, then any or all companies within the control group can contribute whatever amounts. However, if A & B file separate tax returns I believe each must contribute and deduct their respective amounts. At least that is my recollection, but again, a qualified tax accountant for the company(ies) should be able to answer definitively.