austin3515

Based on your reading, the following plan year would ALWAYS be a short plan year. Why would the possibility of a short plan year only be noted parenthetically if it was the mandatory outcome? I don;t disagree with you, and in the right situation (i.e., a big plan) I would probably get an ERISA attorney to bless it. But the regs in my opinion clearly do not prohibit it. They had their chance to tie our hands when they wrote the regulation. They left the door open. Whether intentional or not, it is open. They wrote down in plain in English what was required, and no requirement to maintain the same formula was mentioned.

It could be, except that the regulations specifically permit it. Therefore this type of amendment would be totally uncontroversial.

http://www.fringefunding.com/img/~www.fringefunding.com/hrnewsletter.generic.11.05.12.pdf This McCay Hochman article says you could have terminated one of the plans, but if the deal has closed it is too late to terminate., https://www.mhco.com/BreakingNews/SH_12Month_102413.html One idea might be to change the Plan Year ends to say 3/31, have a short plan year, then merge effective 4/1. I "think" the only requirement for this is that the plan be a safe harbor for the next 12 months. Yes, I think this will work. Here is the reg on changing plan years. Note that QACA's are covered by this same reg and that the reg does not specific you must use the same contribution formula., 1.401(k)-3(e)(3): (3) Change of plan year. A plan that has a short plan year as a result of changing its plan year will not fail to satisfy the requirements of paragraph (e)(1) of this section merely because the plan year has less than 12 months, provided that— (i) The plan satisfied the requirements of this section for the immediately preceding plan year; and (ii) The plan satisfies the requirements of this section (determined without regard to paragraph (g) of this section) for the immediately following plan year (or for the immediately following 12 months if the immediately following plan year is less than 12 months).

Well, I think that might be the nicest professional compliment I have ever received!

There is some rule affecting RIA's which was in response to Bernie Madoff that increased an RIA's responsibility when they have "custody" of client assets. I understand the point of the rules with respect to RIA's who have access to their client's money. I have a client who is an RIA who is suggesting that they are subject to these rules with respect to the Trustee of the plan covering the RIA's employees. I tried to explain that in this situation, invoking this rule would involve protecting the Trustee (who happens to be the sole owner) from himself. The requirements that one must deal with in this situation are quite onerous - either appointing a corporate trustee or engaging an audit firm to conduct "surprise audits." Can someone point to something where it has been documented that this does NOT apply to RIA firms where the owners of the firm serve as Trustees?

Hey, I said it first!

You've got yourself a big problem then. You're amendment benefitted a discriminatory group. The correction is to amend to bring in enough people to correct the violation, and I believe make a QNEC for each of them equal to the ADP for the NHCE's, or something like that. To My 2 Cents original question - you would presumably be in a little hot-water if you did not ask the right question here. I'm not being critical, I assume you asked what I would have asked, which is "is this employee expected to earn more than $115,000 a year" and they said "no" and you said fine. I would like to THINK I would have asked enough questions to ferret out the truth, but I would prefer not to speculate. As to the "outright lie" accusation, I would categorize as it as gross case of omitting the whole truth for them not to say "we want to do it because it's the owner's wife." But then clients tend to exercise their pointer fingers whenever corrections involve writing checks....

That argument works better when the governemtn actually said-so. But here they have not. They have merely "suggested" it without providing any reasoning behind the basis for the suggestion.

https://www.irs.gov/pub/irs-tege/forum15_sep_simple_avoiding_pitfalls.pdf Mfishbein, take a look at this from the IRS website. See page 6 where it says (regarding self employed deferrals):

Amen. 2 minutes to get the SSA, maybe... Explaining to the client why it is needed, tracking this new EIN, blah blah blah...

From a practical perspective: Corporate EIN, with the accoutn properly registered to "John Doe, Trustee, FBO ABC 401(k) Plan." I know the IRS is starting to get their you know what's all in a bunch about separate EIN's, but the reality is, at least in the small market, separat EIN's do not exist. That was done away with with the advent of daily val plans where the custodian handles all the withholdign remittances and 1099 reporting. There is simply no need for a separate EIN. I have NEVER had separate EIN's for ANY plans, and in dozens of audits over the last 10 or 15 years that has NEVER been an issue. That;s all the proof I need, even if I am willing to stipulate that you all know more than me

Same sex couple. We all agree, they are a spouse for everything now, attribution, HCE definition, etc etc. Correct?

Yes, 20% each. Anyone care to comment? That is the extent of the relationship.

From FT William: Note: Due to annual IRS FIRE site maintenance, if you are using our fulfillment service, your batch must be in "Pending" status by 12pm CST on 12/10/2015. Batches submitted between 12/10/2015 and 1/18/2016, will be queued for submission once the IRS FIRE site maintenance is completed. Has the IRS mentioned whther or not late filing penalties will not apply during this period? We have some that are due on 1/15/2016.

Apparently, I am mistaken. For the Plans that stayed with Ascensus, the history did transport over. And for Plans that made the "right" decision to move away, Ascensus will provide the reports needed upon request.

5 people own 20% of a business. The same 5 people make up the board of a non-profit. Controlled Group?

I couldn't charge enough money to reconcile deposits every month... The history did NOT transfer over. These were regular plain vanilla conversions.

The Plans all transitioned over. The big issue is going to be transaction history. We wont know what transaction histories we need until we do the deposit recons and figure out whose deposits do not reconcile. So all the TPA's out there need access for the foreseeable future, to say nothing of the auditors (I know an audited plan never should have been there but we had a couple, I'm sure there are dozens). There was a lot of stuff we pulled from the website for the auditors...

Do you have plans with ExpertPlan? The website is going dark 1/8th. We're raising a big stink and emailing everyone we know at Ascensus. You should do the same if you have a decent book over there. Download all of your reports now. I don't know what you're going to be able to do get transaction histories if you're researching deposit differences. One of the worst decisions Ascensus has made, and there is a lot to choose from.

Classic IRS. They knew what the big question was but avoided it by using a fixed dollar amount election.

Attorneys. Love 'em and hate 'em. Mostly love of course, but sometimes...

I guess my point is it is semantics. 1% of pay = $24,000, or $2,000 a month. So if instead of electing 1% of pay, the participant instead made the exact same election, by requesting $2,000 a month the plan avoids disqualification?? How is it possible that on the one hand an election disqualifies the plan, while the exact same election worded differently does not? How is that not proof in and of itself? 2 + 3 = 5, 3 + 2 = 5. $2,400,000 x 1% = $24,000 / 12 = $2,000 per month. These are all different ways of saying the SAME THING. This is proof.

With respect to the auto enrollment failuires in this procedure, it says you "may use" the default investment fund. Can you still use the DOL's lost interest calculator? I'm just envisioning a correction involving 15 people where you have to look up their fund based on their DOB and get all the invidiualized returns for each date range, for a fund whose performance might not be publicly available on yahoo because it's an insurance company wrap. This sounds like a horrible nightmare... From 2015-28 (emphasis added by me): (2) Calculation of Earnings for certain failures to implement automatic contribution features. This revenue procedure provides an alternative safe harbor method for calculating Earnings for Employee Elective Deferral Failures under § 401(k) plans or § 403(b) Plans that have automatic contribution features and that are corrected in accordance with the procedures in section 3.02(1) or 3.03 of this revenue procedure. If an affected eligible employee has not affirmatively designated an investment alternative, missed Earnings may be calculated based on the plan’s default investment alternative, provided that, with respect to a correction made in accordance with the procedures in section 3.02(1) of this revenue procedure, any cumulative losses reflected in the Earnings calculation will not result in a reduction in the required corrective contributions relating to any matching contributions.

Edited: so an owner less than age 50 can defer MORE Than 7%, but Mr. just barely an HCE due to comp but catch up eligible would be limited? Correct. Problem, right? In my scenario, the owner of course is over 50 but in theory what you said is possible. But anyway, doesn't the cited reg make it definitely a problem? Do you see wiggle room?

We did not want to limit the 45 year old HCE to 7% - only the ones over 50. The thought process being that the those over 50 can contribute more than 7% so everyone gets to save a lot and it tests better. Tom, I just want to confirm that you agree that what I suggested will not work? I agree if I wanted to limit all HCE's across the board to 5% that would not be an issue, because it is not a separate limit applicable to people eligible for catch-ups.