Can an employer retroactively increase their employer contribution formula? If so, what is the allowable time period to do so? Could the retroactive increase be applied as many as 24 months ago?

I have 3 employers and 3 plans - all are part of a controlled group. One plan is a safe harbor plan since 2011.  Each plan has always conducted coverage and ADP/ACP testing on its own -  they never considered the controlled group aspect until now.  Is there an issue on a controlled group basis if each plan has always passed on an individual basis? 

Thank you.

We have a Safe Harbor plan that has two participating employers due to controlled group rules.  The employer that is the Plan Sponsor will soon have 100% of the company stock bought by a separate individual.  The new owner will continue as a participating employer in the plan.  I understand that now that they are no longer a controlled group, they will need to be tested separately, which should be no issue since it is a Safe Harbor Plan. 

My question - what if the new employer decides he no longer wants to participate in the current Plan?  Can he just "spinoff" the current plan as long as he keeps all the provisions of the original plan intact?  Or, if at some point in the future, he decides he doesn't want to maintain the Safe Harbor plan, can he terminate the participation of his company in the plan and start a new plan?  I assume this would have to be done at the beginning of a plan year, since it was done after the sale of the stock?  Is there anything I'm missing?  

Participant is terminating next week and has an unpaid loan from the plan.   How long does she have to pay it off now before it is considered taxable to her?  I though it was 60 days after date of term, but did the new tax law change that?  Thanks!

Background:
1998 QDRO issued / approved,  401K plan administrator (or trustee?) created a separate account for my funds. I've not touched it.  2018 balance about 4 times what it was and I need cash. Best as I've been able to determine (lousy customer service) the plan does still recognize me as an AP and my exemption from 10% penalty still applies. Plan won't allow partial withdrawal, all or nothing only & of course will withhold 20% 
Questions:
1. Does the exemption from 10% penalty apply to all, including the earnings?  
2. When I file my tax return, how do I evidence to the IRS it is not subject to the penalty? (only income tax)
3. If instead I do a direct rollover into a new IRA (losing the QDRO status) and take 72(t) SEPP for a min. of 5 years, when I turn 59.5 in just 3 years, can I make additional penalty free withdrawals over & above the 72(t) distributions? 
4. Other thoughts - am I missing anything, is there a chance the QDRO/penalty exemption "expired",...?
 

Calendar year plan eligiblility 1 YOS, dual entry.

Hire new non-owner today who will earn $1M in 2018 comp. (not HCE for 2018 but will be HCE for 2019).

Can we safely amend plan to allow early entry for deferrals and employer contributions for 2018 without any discrimination issues since NHCE for 2018?

Would we need to again amend to exclude this employee during the first half of 2019 (period prior to “normal” 7/1/2019 entry) to avoid discrimination issues?

Is compensation that complies with Sec 409A eligible for 401k deferrals?

What happens when a collective bargaining agreement differs than the terms of the plan document? Possibly the CBA was amended to provide a different match and employer contribution and the plan document was not amended accordingly, which I think can happen often. Some pre-approved documents have a check box to defer to the CBA. However, if the plan does not have this provision, which takes precedence? The plan or the CBA?

Sponsor would like to provide accelerated 100% vesting for a group of employees who are terminating in order to work for a new hospital. There are a mix of HCE's and NHCE's. How does the BRF test get performed - I understand that 2 tests are involved - 1. Ratio % test, and 2. Nondiscriminatory classification test. For the Ratio test, what numbers do I look at - for example # NHCE's who are benefitting under the 100% vesting divided by # NHCE's not benefitting who are not already 100% vested, and likewise for the HCE group? The plan has 3 year cliff vesting, so obviously many HCE and NHCE are already vested and staying with the employer.

Thanks!

If a doctor is a 79% partner at a surgery center and regularly performs service there as a sub-contractor, he is an affiliated service group and can't have a 1-man plan on the side.

If an accountant is a 79% partner of a manufacturing firm and regularly performs services there as a sub-contractor, he can have a 1-man plan on the side since the manufacturing company is not a service organization. 

Seems unfair but legitimate.  Am I misinterpreting?

Client was self-administering his solo-401(k) from 1/1/2015 (effective date) through 9/1/2017 (when employees became eligible). Since then, my company has been administering the 401k. Based on my conversations, I was under the impression that he was under the $250k threshold prior to this year (lesson learned - don't rely on client's assumptions). 

Assets on 12/31/2015 were <$80,000; assets on 12/31/2016 were >$250,000 but no Form 5500 was filed. I am now starting to work on the 5500 via DFVC but I have a few questions.

1. We do not need to file a 2015 5500, correct? (Nothing about DFVC will require a 2015 & 2016 5500?)

2. Should the delinquent 2016 5500 be filed on a 2016 Form, or 2017 Form?

3. This will be the first filing for a Plan effective 1/1/2015. Will my 2016 Plan Year be 1/1/2016 - 12/31/2016, or 1/1/2015 - 12/31/2016? (Including all contributions made for all years in this first 5500.)

4. The client should first file the late Form 5500 and subsequently (immediately) file and pay for the DFVC, correct?

Thanks!

I  am trying to understand the contribution limits to a solo 401K plan and the interaction with deduction limits for self- employed (SE) health insurance. Per IRS instructions health insurance deduction is limited to net schedule C income less 1/2 SE tax,  less retirement plan contribution. link https://taxmap.irs.gov/taxmap/instr/i1040gi-010.htm#w24811v09 The main issue is if the retirement plan contribution is too high you lose/reduce the health insurance deduction, which I want to avoid.  Here is my example and understanding:

Net Schedule C profit $20,000,     Health Insurance premium $8,108,    1/2 SE tax $1,413

Maximum total contribution to solo 401K without loss of insurance deduction is $10,479 ( 20,000 -1,413 -8,108 = 14,479) and contribution to 401K plan is made up of either $10,479 employee contribution or $6,762 employee contributions plus 20% employer  contribution  of $3,717 (20,000 - 1,413 = 18,587 x 20% = 3,717)

Is my understanding & computations correct?

What about the over age 50 catch up contribution of $6,000? Not sure if this is permitted in excess of above contribution without limitations. (so total contribution to solo 401K of $16,479 ---- 10,479 +6,000)

Thanks,

T

Is it permissible to use Safe Harbor money as a source for paying insurance premiums? Participant is under 59 1/2. If so, what are limitations?  Thanks for any input or cites. 

Plan is 3% nonelective Safe Harbor plan.  Only SH & deferrals.  TH ratio is 80%.

Is this plan exempt from Top Heavy?

I have a plan that needs to correct for 5 loans that were previously defaulted, with 1099's issues, but it's been discovered that the error was caused by the Employer.  I want to make sure I'm completing all the necessary forms to have the defaults reversed and allow these participants to begin making repayments as they desire to.  Can someone please let me know which are the required forms?

Thanks in advance!

We have a plan that has allowed all participants into the plan early for more than 20 years.  Both HCEs and NHCEs were allowed in early.  If the early inclusion of participants is significant (or assumed to be significant), can we adopt the retroactive amendment under SCP?  Does the requirement that significant operational failures be corrected within two years apply to corrections by plan amendments?  Assume there is no discrimination issue.    

A & B are equal partners and both get a K-1s (traditionally identical)

A makes pretax contributions (which are included in box 13 (a deduction)

B makes Roth contributions which are included in Box 4 (guaranteed payment) 
thus A & B end up with different box 14 numbers and thus higher net earnings.

When allocating profit sharing, does B have higher compensation then A and thus receive a larger profit sharing allocation?

Is there a way not to reach this result?

Quick question on some confusion with the code. 1.410(b)-5(a-c) & (d)(2)

When determining the actual benefit percentage, the code states that in (d)(2)"Employee contributions and employee-provided benefits disregarded" and clearly states "Therefore, employee contributions (...), and benefits derived from such contributions, are not taken into account in determining employee benefit percentages."

However, literature, ASPPA presentations, and the Relius program include employee 401k contributions into the test. Applying to both contribution or benefit basis...

Is this due to code 1.401(k)-1a(4)(ii) "Treatment of elective contributions as employer contributions"...? Basically saying that 401k & Roth are considered employer contributions in 1.410(b)-5

Just trying to get some clarification on the confusing wording

Thank you

I have a plan with several hundred people that allows Voluntary After-tax.  I am trying to write a procedure for fixing payroll errors involving Voluntary After-tax Contributions.  I have found good guidance for fixing when an election form is misplaced.  But I cannot find any written guidance on what to do when an eligible employee was not given the opportunity to have Voluntary After-Tax contributions deducted from his check.

What do you all think?

Use the average of the NCE/NHCE group for the year?

I have questions about updating our prototype 401(k) plan disability benefit claims procedures for the new rules that start 4/1.

1. Does the plan document for the prototype 401(k) plan need to be amended?

2. If it does need to be amended, is the deadline 4/1 or the end of the plan year?

3. Should the prototype document provider be preparing this amendment?

4. If we prepare our own amendment to our prototype 401(k) plan, will it still be a prototype plan?

5. Which of the new rules have to be spelled out in the SPD we give to participants and which ones don't?