austin3515

Can I amend a 3% Safe Harbor Plan to exclude different items of compensation prospectively mid-year? I cant find anything on point but it feels like a back door reduction in the SHNEC, the consequence of which of course is to blow my safe harbor for the year. Has this been addressed anywhere? I'm just surprised that no one ever wrote in one of these articles "Be careful! If you amend to reduce eligible comp that is a de facto reduction the contribution formula!"

Eligible employer means - (A) A State, but only with respect to an employee of the State performing services for a public school; (B) A section 501(c)(3) organization with respect to any employee of the section 501(c)(3) organization; So no then, because the employees here are not employed by the 501(c)(3) org. Sounds like everyone agrees?

The sub is NOT a wholly owned LLC. It's a for-profit corporation. What are the rules concerning whether or not they can adopt a 403(b) Plan sponsored by the parent?

I think I get the concern. Merely having a discretionary profit sharing provision available does NOT trigger a top-heavy minimum contribution--only utilizing that feature would require the top-heavy minimum. As Bill says it is moot, with the exception of comp as a participant (the top-heavy minimum being due on full year pay). It would be a much more relevant concern (again to Bill's point) if the plan was a safe harbor match plan, because if the employee chose not to participate, they would not already be getting their 3%, so preserving the exemption would have been more important. Also, note that if you have immediate eligibility for 401k and a 1 year wait for the safe harbor, the exemption is blown. Not sure if that is relevant here or not, but it is such an important landmine that I wanted to mention it.

Non-profit is in blackout and ADP refunds are due. This is a non-profit that has definutey be impacted by COVID and the refunds are significant as is the amount of the excise tax. Now, we can write an amazing "sob story" because this entity is definitely COVID front-line. So for example, the budget is really taking a heavy COVID hit for PPE and testing, etc. If one was going to ask the IRS to abate the penalty how would one go about doing it? We were thinking complete the 5330 as normal and then in lieu of sending a check, attach a cover-letter. Has anyone ever been in this situation before?

I definirely knew the statement would be straightforward but even still was hoping to plagiarize something! Thanks for the clarification! I think WDIK once said, in response to an accusation that common sense was not employed in the drafting of regulations: "It's not that no sense was used in drafting regulations; it's that the sense used was not common." Found it! It was 13 years ago! It's my all time favorite quote on benefitslink; and for the record, I'm almost certain that I would not have such a thing if it were not for this quote. "Certainly there was sense involved during the creation of regulations such as this. It is just that those individuals involved in the process are of such elite caliber that the sense used is not common."

This is the reg my question is in regards to. The quesiton is, does anyone have a template election form that I can "borrow"? Also, I assume this reg applies to all 403b accounts. I noticed that the it references only 403b annuity contracts but I presume the reg just pre-tdates 403(b)(7) (allowing custodial accounts). §1.415(j)-1 Limitation year. (e) Limitation year for individuals on whose behalf section 403(b) annuity contracts have been purchased. The limitation year of an individual on whose behalf a section 403(b) annuity contract has been purchased by an employer is determined in the following manner. (1) If the individual is not in control of any employer (within the meaning of §1.415(f)-1(f)(2)(ii)), the limitation year is the calendar year. However, the individual may elect to change the limitation year to another twelve-month period. To do this, the individual must attach a statement to his or her income tax return filed for the taxable year in which the change is made. Any change in the limitation year must comply with the rules set forth in paragraph (d) of this section.

Well, I agree that is easiest, but sometiome speople have been gone for 7 or 10 years and its a bit awkward to tell them they are in straight away. "In the case of a Former Employee who under the Plan does not have a nonforfeitable right to any interest in the Plan resulting from Employer contributions, " A Participant who took a distribution 8 years ago does not today have a "nonforfeitable right to any interest in the Plan" so I'm not convinced that taking a distribution is irrelevant. For example if a participant still has money in the plan 8 years later they never stopped being a participant in the first place and they clearly have a non-forfeitable right to an interest in the plan...

"In the case of a Former Employee who under the Plan does not have a nonforfeitable right to any interest in the Plan resulting from Employer contributions, " Has anyone found a good article from a good source on what this means. I feel like you need a table with entries for the following: Eligible for 401(k) but never made any contributions Eligible for 401(k) but took a distriubtion shortly after termination Eligible for 401k and never took a distriubtion Eligible for profit sharing but never received an allocation Eligible for profit sharing and took a distribution shortly after termination You ge tthe point. There is a different logic for each of these scenairos. Anyone ever see anything that really go through this in detail?

Well maybe someday someone will let us know! Something tells me the answer is "the answer is not clear."

The same comp limit applies for the nonelective. There is no comp limit on the match. But the most match you can possibly get of course is equal to the SIMPLE IRA max contribution limit ($13,500 / $16,500) because its a dollar for dollar match,

What are y'all naming your trusts? I was thinking if the name of the plan is ABC 401(k) Plan the trust would be named ABC 401(k) Plan Trust (as in the trust established for the aforementioned plan). Relius just sent us a notification that the trust name can be the same as the Plan name but that just felt awkward. Things that are different should have different names!

Is the Auto Enrollment Tax Credit ($500 per year for 3 years under SECURE Act) available to ALL EACA's, or just EACA's that cover ALL employees (i.e., an EACA that includes a sweep of existing eligible employees). A lot of EACA's only apply to those who become newly eligible.

I assume this is related to 3(16) work where you are trying to log in to ADP or PayChex and download the applicable payroll reports? I know there are some firms out there that outsource this function. So far we've decided to steer clear of that (we can old muck up the waters), but that could change from day to day! I don;t remember the names for you, but I too am curious to know if this is what you are referring to.

"You just blew my mind." Kramer

"(A) if the due date pursuant to subparagraph (B) or (C) of section 72(p)(2) of such Code for any repayment with respect to such loan occurs during the period beginning on the date of the enactment of this Act and ending on December 31, 2020, such due date shall be delayed for 1 year," If you just read the plain text of the statute the due date for the January payments is simply not extended. I don;t see any possible reading of the statute that provides an extension for payments due in January. Because there is no way read for such a deferral, could it be a reasonable interpretation? Now, TIAA-CREF is no insignificant institution. If its good enough for TIAA I'm sure others will conclude the same. And I don't believe for a second TIAA did not speak to someone high up at the IRS for a blessing. I assume they can get the right people to answer their calls. But purely as an academic exercise I think Luke is spot-on.

Am I mistaken or does that connect with a household name for recordkeepers that we have all heard of? You don't have to name names obviously (certainly I, of all people, understand the need for anonymity and "mystery"!).

But here is another thought, though I hate to be practical when practicality is so rarely a consideration! Could you imagine what a nightmare it would be track all of these elections independently and know when to resume payments based on each individuals personal election? That could be "unruly" unless there is some really rock solid system in place (like a 360 bridge). Overall, this would be a recipe for disaster. Resuming all payments 1/1/2021 is a LOT easier...

I don't know Andrew, MoJo sounds pretty convincing :).

On a call with a huge recordkeeper (TIAA) who is taking the position that participants who elected a loan payment deferral don;t have to make any payments for a full year. I personally read the law to say that payments due in January are NOT extended. I think its nuts that not everyone is on the same page on that... I think there is near universal agreement on that but I assume TIAA paid a "pretty good" ERISA attorney to advise them on that policy...

The issue which is a very real one in my opinion is that participants talk to each other and it becomes known that you can just do this. Take a well meaning HR manager who knows it is an option. A participant comes in and says "I can't pay my bills". The well meaning HR says "hey let's stop paying your loan". Now 3 people have done it. They tell their friends. I'm just saying its possible that the loan program could get into trouble pretty quickly. Lower paid employees want the money and they don't want to repay the loans. Many would jump at the opportunity to stop the payments. Maybe not immediately but at some point over the 5 year period, "probably" they will. Maybe I'm being to cautious but I will say many clients have made this issue first. In fact if I'm not mistaken it may be a client who first made this point me umpteen years ago.

Maybe I am just being dense here, but these two sentences seem contradictory? The first seems to say participants can request a cessation of withholding; the latter says if permitted the plan is disqualified? I cannot believe this has still not been resolved. So frustrating!

Thats what I've always though, but I have a lot of clients who are very afraid of doing that because if word gets out that repaying loans is "voluntary" then it might become a pretty popular option (tax consequences notwithstanding).

What is a naked payroll deduction? Something that is not irrevocable basically?

Participant comes into plan sponsor and says I am NOT repaying this loan any longer. What is a plan sponsor/trustee to do? That's it. That's the question. I'll be darned if this question has ever been answered.