Leaderboard

For the discretionary match to also be ACP SH, like Artie said, it has two independent constraints: The discretionary match piece cannot match on deferrals on over 6% of plan comp. Also, the total dollar amount of the match awarded cannot be more than 4% of comp. So, your discretionary match could be 66 2/3% of deferrals up to 6% of pay. It satisfies both of those conditions.

Did the TPA use actual rate of return, rather than the DOL calculator? Unless the TPA was told that the plan would be submitting the correction to VFCP, the calculator should not be (though it often is) used. I'm also wondering why the same person or company isn't doing the lost earnings + Form 5330 + VFCP if the plan wanted all three. It seems unusual or inefficient to have someone different prepare just the VFCP submission.

If only the WaybackMachine had preserved Derrin's singing!

agree with Lou you should be good.

Notice 2013-74 Q&A-3

Yes you can, meets the ACP exemption.

Benefits are negotiated between the company and the union. The union represents the union employees in the negotiations. Once an agreement is negotiated, there is a collective bargaining agreement documenting among other things, if the company will include the union employees in the company's retirement plan and if yes, any plan provisions that may or may not apply specifically to union employees. You may want to first speak with your union representative and also read the most recent bargaining agreement to get an answer to your question.

Great question! The EOB says in Chapter 8 Coveage Testing Part C., Average benefit percentage test, 2. Computing benefit percentages, 2.i. Certain distributed amounts must be included in benefit percentage: 2.i.2) Corrective distributions of excess deferrals under IRC §402(g). Whether to apply the rule described in 2.i.1) to excess deferrals under IRC §402(g) is less clear. Treas. Reg. §1.415(c)-1(b)(2)(ii)(D) provides that excess deferrals which are distributed by the April 15th deadline under IRC §402(g)(2) are not treated as annual additions for §415 purposes. However, Treas. Reg. §1.402(g)-1(e)(1)(ii) provides that the excess deferrals of nonhighly compensated employees (NHCs) are excluded from the nondiscrimination test (i.e., the ADP test) under §401(k), but the excess deferrals of the highly compensated employees (HCEs) are included in the ADP test. With the difference in treatment between HCEs and NHCs for nondiscrimination testing purposes, it is recommended that excess deferrals made by HCEs be included in the benefit percentage, even if they are distributed by the April 15th deadline. The short version of the logic that leads to this conclusion is it the excess is included in the ADP test, the excess should be included in the ABT. Note that the analysis admits that this is "less clear" and the conclusion is "recommended" which will leave up to the plan and the practitioner to decide if they embrace this interpretation. The most conservative approach is to include the excess deferrals.