austin3515

Is there an issue with having auto enroll effective 1/1/15 and then the first auto escalation 7/1/15? Something in our document is ambiguous about when the first escalation can occur.

'Tis I am who am mistaken. I hereby bow down to your extensive expertise

you're thinking of a SARSEP, which I only know because I just had a similar issue. There is no issue having a SEP and another plan. IF I am mistaken, please let me know, but I believe you will post again acknowledging I am correct...

What do you mean coordinated with a 401(k)? If I need a straight percent of pay in the SEP I'm not sure how to do that if I stop mid-year. Or are you suggesting I can somehow take into account the contributions made in the PS Plan?

my bad, yes they fund every pay-period.

Can I discontinue a SEP as of 9/30/2014 (calendar year is the plan year)? Effective 10/1 we want the Er contributions to go to the new 401k/PS plan.

Maybe I am a cowboy but for a two person plan I would not be too concerned. Those rules on "its really profit sharing" were for those companies that would make a $200,000 deposit on December 1st as an advance for next years 401k (and take the deduction in the year funded). Yes, technically it is profit sharing. As others will tell you, advise the client of the right thing to do (in writing) but as TPA we are not their parents.

Testing issues. It ended up not mattering, there was no prototype available anywhere. And I guess for the moment their testing is "acceptable" so we're adding a SH 401k effective 1/1/15.

I've found that an employer with a SARSEP can only add a 401k mid-year if they adopted a prototype (and not the 5305A-SEP). Is there any way to get my hands on such a document? The Plan was with Fidelity but Fidelity indicated that they used the 5305A-SEP.

Even if SpouseB now is willing to sign the consent, what happens if he later asserts that the consent is invalid? The Plan administrator is the spouse waiving the benefit, so would it not be unlikely that he would accuse himself of not taking due care?

Owner (aka SpouseB) and SpouseA both work for a medical practice. SpouseA wants to name kids as beneficiaries and therefore Owner (SpouseB) must consent. Can Owner witness his own consent on behalf of plan administrator? Or is it foolish not to just get it notarized?

fwiw, I don't think you can use the 403b deferrals in the Avg Ben Test.

There is no plan aggregation for the audit requirement. 3 plans with 60 participants each = no audit requirement for any of the plans. You still need to make sure each LOB has 50, btw.

Why not have one question: What type of plan is this? DB / PS / 401k (including PS w/ 401k) / Money Purchase / ESOP And then ask about the other "characteristics" as distinct from plan type. Oh, if I were in charge!!

I let it go... It is ridiculous I agree. I still can't figure out why they want to know on the H how much Mutual Funds paid out in dividends. Or why for realized gains they make us come up with aggregate proceeds and cost basis. Are they using this data for ANYTHING?

Are you "required" to use Code 2E (Profit Sharing) if the only contributions that have ever been made are 401k and Safe Harbor? Or is it necessary to clarify that at its core it is a profit sharing plan. I always used 2E for 401k plans but I'm reviewing a 5500 for the prior provider and they are not using it. Should I tell them they are flat out wrong or let it be? I'm thinking that it's probably ok to exclude it (they did indicate 2J and 2K).

The difference from the single employer world is that the Employer of course decides who the trustee will be therefore has no one to blame but itself. Whatever the case may be, whenever I have clients that are negotiating with unions (either existing or negotiating for the first time) I always tell them at all costs to avoid the pension plan. It just seems like a 100 foot pit. Maybe even bottomless...

I agree, it is not required, but it is not a great plan desing (in my opinion anyway).

No, they want to do a match for 2014 but have not decided on the amount, etc. Earlier this year I did an Access Database to calc the match on every 2013 pay-date but it was cumbersome. Obviously if there is an annual deposit the document should be an annual calc. And snce the year is not over for 2014 I have more options than when I was working on 2013.

btw, one of the qslob requirements I believe is that each LOB must have 50 participants.

If they QSLOB's, yes they can do whatever they want. Mind you, must meet the nondiscriminatory classification test, but then it wouldn't be a QSLOB if you couldn't meet that. Even if not a QSLOB each plan can still do whatever it wants provided they meet all of the coverage requirements. So if the SH plan disproportionately benefits HCE's it probably would not work.

OK, back to this again... I'm leaning towards adding the 2nd match because I'm concluding that because no match existed there could not be a cut-back by switching to an annual calculation. Also, if the match is declared/funded as a formula (i.e., 25% of the first 4%) then switching from a pay-period match to an annual match would ONLY increase participants benefits (Tom Poje, many of the HCE's are deferring, so there's nothing nefarious going on here, but point taken). And of course a match is always a formula (even if you back into the formula based on the budget). So I just don't see the cutback for the switch. What I have concluded I cannot do in good faith, based on all of the same logic presented above, is added any allocation conditions. If 2nd match was already in the Plan I would have no qualms about it (others have already pointed out that this would be a horse of a different color). But since I am adding it today, I think it is a cutback to impose allocation conditions on participants who otherwise would have been entitled to the match. In other words, I should probably be comfortable amending the calculation period from each pay-period to an Annual Match without worrying about adding the 2nd match. But of course adding the 2nd annual match only provides me one more level of defense if anyone were to question it. But adding allocation conditions does not seem to work in my opinion. Do others agree? Tom, based on your caveat it sounds like you don't have a problem with switching to an annual calculation?

So what you are saying (Kevin) is if I merge the SH plan into the non-sh plan, that is an acceptable reason to have a short SH Plan Year? And I guess the next question is, what if I wanted to continue to provide the Safe Harbor Contribution for the legacy participants? Any way to do that? The entire merged plan will be SH in 2015. [And no, it is not an option to merge the non-SH plan into the SH Plan in this case - the non-SH Plan has many many more partiicpants and the far superior provider].

But if we are merging and not terminating?

What are the parameters for merging a SH Plan into a non-SH Plan? I can't find anything, even in the Outline Book... Can I continue the SH portion of the plan for just those participants merged in from the SH Plan? IT is a separate legal entity that was recently acquired. Also, does the merger itself "blow" the 410b6c grace period which just opens up a whole other can of worms? Or are my choices a) wait until the first day of a plan year, or b) discontinue the SH mid-year and therefore run ADP testing, etc.