austin3515

OMG it is screaming out for a flowchart.

These rules are completely insane. What are others using as a practical tool for sorting this all out? There must 15 to 20 pages in the EOB. Has anyone created a user friendly guide to answer the million possibilities?? I'll spend 45 minutes sometimes trying to figure all of this out for a particular scenario. To me there should be a website where you ask: How old was the Participant? How old was the beneficiary? Was the beneficiary the spouse? And on an with all of the other variables (RMD before death, after death) and tell you what the rules are. Has anyone done this yet??

From the general description of the match, it sounds as if neither plan is a safe harbor plan. correct Does the salaried plan use a true-up? No it does not. Pay-period only. Good question though... So that is BRF in favor of the largely NHCE group. Do both plans match (or do not match) catch-up contributions and/or after-tax contributions? Yes aside from timing it's the same exact match (no after-tax money). Is the rate of match at all levels consistent for all employees? (This one may be a challenge due to the 1000 hour/last day rules for hourly employees.) Same match formula but to your earlier point the match is "better" for the folks who get only a year-end match, and that group is disproporationately NHCE.

Division A has match going in every pay-period because these are basically salaried office workers. The vast majority of the HCEs are in division A. There are a bunch of employees with more sporadic work schedules and the client does not want to provide them with the match unless they work 1,000 hours and meet the last day requirement. 1) Straight coverage, my ratio %age fails but a hair, but my Average Benefits Test passes by a mile, 2) If I treat the timing as a BRF then I am still good because even if I treat the pay-period match as a BRF I'm over the nondiscriminatory classification threshhold. Am I thinking this through correctly?

There is no more a requirement to do a sweep then there is to be aQACA or add hardship distributions. There just is nothing in the statute that even suggests a sweep by inference or subtlety or anything. I guess it’s just frustrating for me that there wouldn’t be more agreement on this. There are not that many words here so I am surprised at other interpretations of this straightforward text.

HEre is the QACA Language (401(k)(13)(C)(i): The requirements of this subparagraph are met if, under the arrangement, each employee eligible to participate in the arrangement is treated as having elected to have the employer make elective contributions in an amount equal to a qualified percentage of compensation. Clear as day for a QACA. No such language exists for this new SECURE 2.0 EACA Requirement.

Its the same language as the statute. Can you please explan why the automatic enrollment provision requires something more than EACA when it only says it has to be an EACA? There are no modifications that I can see to the "EACA" requirement (like a requirement to include ALL eligible employees). Compare that with a QACA there is a clear statutory requirement to cover all eligibles.

On a webinar and they said something I didn't think was right. SECURE 2.0 only says that as of 1/1/2025 the plan must be an EACA. An EACA need not be applied to all eligibles - it can be applied only to new hires (ok I don't get the extra time for my ADP test). On the webinar they felt that the best reading was that the auto enrollment had to be a sweep on 1/1/2025, and pick up all eligibles. But to me it is clear as day that only new hires must be subject. the statute: "An arrangement or agreement meets the requirements of this subsection if such arrangement or agreement is an eligible automatic contribution arrangement (as defined in section 414(w)(3)) which meets the requirements of paragraphs (2) through (4)." Nothing in paragraph 2 through 4 has anything at all to do with the groupings of who needs to be auto enrolled.

"he credit allowed for the taxable year under subsection (a) " I asked a prominent ERISA attorney if he agreed that this reference to paragraph a) adopted the same language in paragraph a about paid or incurred, and he did not believe so. At the risk of being audacious I would suggest it is the only thing we have to go by.

My favorite Benefitslink quote of all time. I saved this for 16 years now!!

I guess it would be nice of the IRS to just tell us that logic is their position. And then what if you flip flop positions, is that ok? Can you claim 2 credits in 1 year, one based on cash basis and once based on accrual? I just think the timing of the credits needs to be explained.

Ya know I went back and red the code and it seems like it says "paid or incurred." You can interpret the word incurred in at least 2 ways as far as I can tell, so not sure, but it certainly does indicate that it might not necessarily be the same taxable year in which it was paid. I'm actually surprised I can't find anyone commenting on this question. IT seems pretty obvious that it should be addressed. That word incurred I think is too open. For example, I am doing admin for 2023, but I'm not doing the work in 2023. Was the expense incurred in 2023 or 2024? If I say it was incurred in 2023 I can take the credit in 2023. I use my fees as an example becauise it's based on the same exact rule. And what if a contribution is discretionary? Is it incurred in 2023 if a choice was made in 2024? Isn;t that different than a safe harbor nonelective built into the document where it was clearly incurred with each passing paycheck? I have no answers but I think I'm asking the right questions! I know, I know, we need guidance...

Er Contribution for 2023 funded in 2024. The tax credit is towards 2023 taxes, right?

Here is the screenshot in Relius:

I personally don't understand why you would ever not exclude keys from TH Minimum. The match is discretionary (at least in our Relius Corbel doc) so they just have to contribute 3% to get a 3% match. So I don't see what is gained.

I know in Relius there is a checkbox to exclude top-heavy minimums from testing (or maybe treat THM only as not-benefitting maybe?). I use relius ASP so it takes me 45 minutes to login, otherwise I would tell you exactly what it says, LOL,

I mean the same langauge shows up for each code so I assume this is relatively simple to program for. For me the bigger problem is the SAR will now be two pages!

I used to have a great chart of what the maximum allocation was in a cash balance plan. Rows were ages, and columns were different income levels. But the company who did that stopped doing it. Anyone know of a good website? I would figure there would be someone out there who would even have a little calculator (enter age, comp, etc and it spits out a funding range, etc). Anyway, that chart was so handy becaue you could give clients on a call a quick idea of the numbers being discussed without having to go to the actuary. Obviously you follow up with the actuary for the real numbers but again the chart was just really handy.

Seems to be back up now. Not sure if it was our end or theirs but working again.

We use Relius ASP and no one is able to use the file transfer tool to port files between the Relius Desktop and our local desktops. Anypne having the same issue? Saturday October 7th..

I had another attorney say the same thing! Great news, thanks!

Letter comes in from IRS. $150K penalty. My advice has always been: 1) Amend 5500 to check DFVC box 2) Do a DFVC filing and pay the user fee 3) Write the IRS and ask them to abate because you fully complied with DFVC. Is that what people are still doing? Firs time I've had to do this with a 150K penalty so I wanted to double check.

Maybe I am making it more complicated than it is.This is what it says the Admin Procedures section: Application to Automatic Deferral provisions to rehired Employees. Unless this Plan is a QACA, or with respect to withdrawal rights for EACAs, then rehired Employees are treated as new hires pursuant to the following (leave blank if not applicable): l. [ ] A rehired Employee is only treated as a new hire for purposes of the Automatic Deferral provisions (except as otherwise provided in the Basic Plan Document) if the rehired Employee has separated from service for at least (enter a period; e.g., 3 months) I gather what this means is if you leave for a week, a month a year or 3 years, when you come back you get re-solicited for auto enrollment. Is that where people are landing here?

We use the RElius Corbel formatted document. Anyone have any idea what the normal procedures would be for how to treat rehires? One of the options listed below should be somehow selected or known. Can it be purely administrative policy or is there an absolute answer to this question contained somewhere in the BPD? I also understand (From reading the administrative provisions and BPD) that there is less flexibility if we are trying to use the 90 day permissible w/drawal EACA provisions. Affirmative Election WAS Made 1) Do NOT auto enroll or resume any affirmative elections. 2) Subject the participant to a new auto enroll process. 3) Implement the old election on payroll. Affirmative Election NOT made: 1) Do NOT auto enroll or resume any default elections. 2) Subject the participant to a new auto enroll process. 3) Implement the old auto enrollment rate on payroll without a new set of notifications/wait periods. This option is more important of course if there is an auto escalation feature. Just curious if I'm the only who is struggling with this issue more and more as more plans add auto enrollment...

Not sure why I kept typing "Participant Employer". I guess I type the word Participant so much my fingers are on autopilot!