Small 401(k) plan provides vesting credit to the profit sharing account based on years of service. Each year of service is a year in which an employee worked at least 1,000 hours.

For allocation purposes, there is no hours requirement.

The document indicates that a participant will be 100% vested upon the later of attaining age 65 or 5 years of participation. The document does not define a year of participation.

This plan has a participant who was 75 when she became eligible. She now terminated employment at age 83. She worked less than 500 hours in each of those years. Is she 0% vested or 100% vested in the profit sharing portion?

Thanks.

New employee (1st non-owner employee) will enter a DB Plan 7/1/2017.

Can I terminate 6/30/2017 and give only the owner a benefit for the year?

Thank you

I just wanted to take a moment and publicly thank everyone involved in this board from Dave and Lois to the people that are constantly providing answers and guidance.

Not sure how I would have survived in this business without this board.

Thanks and I hope everyone has a wonderful Thanksgiving!

WCP

Plan is subsequently (prior to 12/31/2016) AMENDED to remove the safe harbor provision for 2017.

I see no problem with this, but I've had several different people disagree with me. I don't see any legal obligation to continue the plan as a safe harbor plan for 2017 just because a safe harbor notice was distributed, as long as the plan is amended prior to the beginning of 2017.

Am I wrong on this?

I must be missing something, please let me know.

What would prevent an owner with 2 businesses from having a plan for each business, with identical plan provisions, both of them safe harbor matching plans. Then paying himself $225,000 from each company, contributing $9,000 in deferrals to each plan and getting a $9,000 SH match from each plan? It doesn't seem like he should be able to get more than $10,600 total match ($265,000 * 4%), but I don't know what is stopping him in this scenario. The plans could be combined for coverage and ADP testing and would pass. top heavy wouldn't be an issue if there are no additional employer contributions. So is this permissible? Obviously you could argue why go to all this trouble and expense of 2 plans just to get an extra $7,400 matching contribution... and maybe that is the answer (?)

As an employer, our employees are classified as Full-Time (35+ hrs per week,) Part-time (30-34hrs per week,) and per diem (less than 30/when we need them.) We charge our insurance premiums based on those classifications. The less hours you work, the more the employee share is. Due to ACA classifying everyone over 30 as full time, when calculating affordability would we need to calculate both the lowest share single coverage price for 30-34 and the lowest share single coverage price for 35+? Or is it just based on our lowest price no matter what hour category we put them in? It is the same MEC and MV plan.

Can an adult disabled child remain on their parent's health insurance past the age of 26? What documentation would be required? Disabled prior to age 22 (since birth).

We are looking for a good compensation survey that aligns with our administration process. Our administrators are responsible for the following. Please let me know if you have any suggestions on where to find an appropriate compensation survey. We are looking for good data not necessarily something inexpensive or free. Thanks in advance for your help.

• DC and DB testing (including combos), administration, 5500's
• Trust Accounting
• Sponsor/Producer Relationship
• Distribution Issues
• Knowledge of Life Insurance w/ in plans
• Plan Design Consulting

Can you define HCE based on current year compensation instead of look back year compensation in the plan document for compliance testing purposes?

I'm having a major brain freeze regarding this question, so here goes.

Company A merged into Company B on 10-1-2016. Company A sponsored a safe-harbor 401(k) plan (4% match), and the safe-harbor contribution had been made at each pay period. All employees of A "terminated" on 9-30-16 and began working for B on 10-1-16.

Company A remains in existence (to collect outstanding receivables, etc) and the owners of the company remain "employed" by A. The owners are asking if they could make a discretionary profit sharing contribution, over and above the safe-harbor match, on their behalf, omitting the rank and file employees who were all terminated on 9-30-16.

I have made myself nuts with the following questions:

Could they make this contribution only for themselves, as the contribution (benefit) would only benefit HCE's?

As the Safe-Harbor match satisfied the Top-Heavy requirement, would they need to provide the 3% TH to those who did not receive the match regardless of question #1?

Any responses, as always, are greatly appreciated!

Can anyone point me to a good source on structuring a disease management wellness type of program? My employer wants to create a diabetes management program for employees. I am wary of a structure that provides incentives to employees that participate, in that the only participants would be those that don't have diabetes. I know that other employers offer a diabetes management program, but I am not sure how they structure it to avoid discriminating against employees that can't participate because they don't have diabetes.

Thanks.

Has anyone seen a situation where employees' health insurance premiums are set as a percentage of the employee's wages on an ongoing basis - and wages can vary weekly resulting in a different premium cost every week (or month)?

I'm familiar with using a percent of pay at a given point in time to set a premium for the year, but not with using a percent on an ongoing basis with employees with variable pay.

I cannot find anything prohibiting this practice, although I can see lots of complications.

Any and all thoughts appreciated!

This is a new one for me. We have a plan that was effective 01/01/04. We have been TPA from the beginning. The sponsor provided us with their EIN; we used this EIN to obtain and EIN for the trust (SS-4), and have put this sponsor's EIN on every 5500 filing from 2004 through 2016.

Only yesterday did my contact advise me that this number is not theirs. She will check further and get back to me.

If we obtained the trust's EIN using the incorrect EIN for plan sponsor, and have filled 2004-2016 returns using incorrect EIN for plan sponsor, what do we do? Is this a big issue with IRS, or do we just change it on next 5500 filing with an explanation???

DB plan currently defines NRA as age 65. A participant (either active or terminated) can defer their benefit past NRA. In such case, an active participant will receive a suspension of benefits notice, while a terminated participants benefit will be actuarially increased from his NRA to his annuity starting date.

In addition, the plan allows an active participant the option of taking their benefit (at NRA) and continuing to work. I'm not sure if this would be allowable with the suspension of benefit rules - given that their benefits are supposed to be withheld. But nevertheless, it's allowed in the plan document. When an active participant receives their suspension notice (at NRA), they are typically advised by the employer to just take their benefit - but not everyone does.

The plan is frozen and the employer would like to force all participants (both active and terminated) to take their benefit at NRA. Is the right to defer a benefit past NRA protected?

Work with a small business that has 3 employees. No health benefits are offered to any employee. Can the employer set up a cafeteria plan that will deduct medical and dental premiums pretax for policies that employees have acquired personally and pay for personally?

Anyone have any suggestions? We've got a few people "behind" on CPE and need to get some in before 12/31/16.

does incidental benefit rule apply if the plan sponsor rolls cash into profit sharing plan and purchases insurance from rollover money?

I have two companies that are a controlled group. Plan A has deferrals and profit sharing, Plan B has deferrals and match. The combined plans pass coverage testing using the ratio percentage test. They also pass the Average Benefit Test. Is there another test I should be doing?

When doing the ADP Test separately, Plan A fails and Plan B passes. IF I combine them, Plan A fails less, but a participant of B will now receive a refund. Is this acceptable to combine for adp testing even if they are not required to be tested together? I think it is, but is it fair to the employee of Plan B that will now receive a refund?

Co. A acquires Co. B in an asset acquisition in November 2015. Co. B sponsored a plan, but the plan was terminated at acquisition. Some participants did roll their balances into Co. A, but rollovers didn't actually occur until January and February of 2016.

Bob was 72 at the time of the acquisition, but still employed. He terminates in July 2016. A couple of RMD issues:

1. It is my understanding that there would not be a 2016 rmd for Bob. He did not have a balance in Co. A's plan at 12/31/15.

2. Should have Co. B's plan issued an rmd for 2015? My understanding is yes because the employer changed at Co. B's acquisition.

Thanks in advance for any guidance.

I have the IRS reference number from when it acknowledged (Form 8950) a VCP application, but have heard nothing in months since then. Does anyone know of a good phone number/person at IRS to contact to follow up on a VCP application?