ejohnke

I have a plan with a rehire. Previous employment was 2014-2016. At that time, the participant made deferrals and was 100% vested in profit sharing funds. In 2021, the plan changed profit sharing vesting from immediate to a 3 year cliff vesting. The participant has returned in 2022. The employer agrees that the employee is a plan participant upon rehire, but the employer is questioning the participant's vesting percentage. Is the participant 100% vested because that is where they were when they left OR are they 0% vested because they had more than 5 consecutive 1-year breaks in service allowing previous vesting to be ignored (Taking all years with 1,000 hours into account when calculating the 3 years of service for the cliff vesting, they would have credit for 2015 and 2016, but still be at 0% as of 12/31/22)?

What type of violation is this and what is the appropriate way to fix it? My client will likely want to pay an excise tax to be able to significantly increase his tax savings through a cash balance plan for 2022.

I have a solo 401(k) that has already been fully funded for the 2022 plan year ($61,000) and they recently decided they want to open a cash balance plan for greater tax benefits. If they open a cash balance plan, their solo 401(k) will be over funded $22,500 in employer contributions. They would like to remove the overfunding from the 401(k) plan to open and maximize their cash balance plan for 2022. What type of correction would this be (excess annual additions, mistake of fact)? What is the best way to go about correcting this?

I have a plan that is starting a Basic Safe Harbor Match effective 1/1. Their Custodian will not be ready to accept contributions until 2/1. If we make the plan effective 1/1, but deferrals not allowed until 2/1, will they need to do ADP/ACP testing for this first year?