austin3515

Yes, I think you would be ok, unless everyone but the HCE's work for minimum wage and there do not effectively have the opportunity to contribute more than 4% of pay. I don't see how you would ever pass the ACP test, unless you can aggregate with the SH Match for testing, which I actually think you can?

Anyone know of a cheap way to get some ethics CPE? I am aware of ASPPA's webinars but I am thinking there must be someone else out there? I am looking for something for the QPA/QKA ethics CPE requirements.

Definitely not an ACP Safe Harbor because you are forbidden from having the match increase as the rate of deferrals increase. From 26 CFR 1.401(m)-3 - Safe harbor requirements. (2) Matching rate must not increase. A plan that provides for matching contributions meets the requirements of this paragraph (d) only if the ratio of matching contributions on behalf of an employee under the plan for a plan year to the employee's elective deferrals and employee contributions, does not increase as the amount of an employee's elective deferrals and employee contributions increases.

So let me get this straight, after year end, you decide whether the match is 50% of the first 6% plus 100% of the next 3%, or if the match is 25% of the first 4% plus 100% of the next 3%? You'll have a hard time convincing you're not doing that to increase the share of the match allocable to the owner.

Why not just a 1 pager saying what the error was. I don't think you would need to reprint the whole giant thing.

If you read my parenthetical and my comments, I am only assuming that it will eventually be phased out altogether. Certainly in 50 years when all the current ERPA's are retired (hopefully!) there will be no need for the designation. I simply assume it will be deleted before then.

Don't forget if Ted Cruz gets elected there won't be anymore IRS That's gotta be one of the most cockeyed things I ever heard. I'm sure his secret plan is really to move all of the functions to the newly established Service for Internal Revenue.

Such as what? I just think they are going to phase this out. That's too bad because ERPA's were a good substitute for ERISA attorneys for loan failures for example. It is profitable work for me and saved the client a lot of money. I just think if it is too much work to provide the test the following is going to happen very soon: Vendors will stop going to all the trouble of being approved as an ERPA trainer The IRS is going to decide it is no longer efficient to track CPE the way that it does. And that will be that.

I assume it is only a matter of time now before they take my ERPA away... That's very disappointing. https://www.irs.gov/Retirement-Plans/Enrolled-Retirement-Plan-Agent-ERPA-Program-Changes

Match calculated/funded each apy-period, no annual true-up. NHCE contributions $18,000 in first 9 months. Based on the true-definition of catch-ups, everything in Q4 is catch-ups and no match is accrued. Under 50 HCE 401k contributions are all matched, thus violating the rule that HCE's cannot have a better rate of match at any level of deferrals (1.401(m)-3(d)(1)-(4)(d)(4)). Agreed? I actually think that if there was annual true-up for the match, there could essentially never be a (d)(4) issue. It seems related to the calculations made more frequently where it crops up because catch-ups are obviously going to materialize later in the year.

Well, I don't think that is litmus test. Moving expenses are cash, opt out of health insurance payments are cash, STD disability benefits, and on and on.

Our PT Formatted VS document does NOT allow me to exclude catch-up contribtions from the ACP Safe Harbor Match. What is the basis of that prohibition? I am familiar w/ the preamble to final 401k regulations where they explained why catch-ups could not be excluded from the ADP basic safe harbor match. Is there anything else out there that ties in the ACP Safe Harbor Match as well, perhaps an LRM or something? From the Preamble: https://www.irs.gov/irb/2005-05_IRB/ar06.html The proposed regulations did not include any exception to the requirements for safe harbor matching contributions with respect to catch-up contributions. As part of the proposed regulations the IRS and Treasury solicited comments on the specific circumstances under which elective contributions by an NHCE to a safe harbor plan would be less than the amount required to be matched, e.g., less than 5% of safe harbor compensation, but would be treated by the plan as catch-up contributions, and on the extent to which a safe harbor plan should be required to match catch-up contributions under such circumstances. After reviewing the comments and the applicable statutory provisions (including the amendments to section 414(v)(3)(B) made by the Job Creation and Worker Assistance Act of 2002, (JCWAA) (Public Law 107-147)), the IRS and Treasury have determined that no such exception is appropriate.

We had a very very brilliant attorney say it could be considered a taxable fringe (edit: I'm not being sarcastic here by the way). Which certainly reminds me of the old adage about attorneys - "what does the Plan Documnent say? That depends. What do you want it to say?"

OK, I definitely see the point. But would also recommend that for something like that, which in my opinion is at best gray, to say something like "sign-on bonuses are excluded" or "sign-on bonuses shall be considered taxable fringe benefits" or something like that?

Plan excludes taxable fringe benefits from compensation. What say you regarding whether or not a sign-on bonus might be considered a taxable fringe? Perhaps along the same lines as moving expenses?

If the question was about bonus, I would not have thought twice. I just wasn't sure if GP's and OI were so intertwined one could not be distinguished from the other for these purposes. But I am inclined to agree with you. My definition would simply say, The determination of Earned Income with respect to the calculation of Employer Matching Contributions shall be made by disregarding positive ordinary income reported on the K-1, but taking into account any ordinary losses reported on the k-1.

Partners have ordinary income and Guaranteed Payments. Can we amend the Plan to exclude from the calculation of earned income Ordinary Income (but NOT Losses)? The situation is that the CEO is a 10% owner and does NOT want the extra match attributable to his ordinary income. I know I cannot exclude the losses because if I did their match rate would be higher than the rank and file and that would not pass nondiscrimination. They want the match to be based exclusively on guaranteed payments. I also recognize for nondiscrimination testing, I would still use the statutory definition of earnings.

I figured out what happened. The SSA reporting was on an old Money Purchase plan merged into a 401k plan. Must not have used the C code to transfer the benefits to the new Plan #.

I think this meets the definition of insanity. it was EFILED for crying out loud.

A participant received one of these letters in June 2015 - but we e-filed an SSA for this client in 2012 and included this participant as a D... Anyone have this happen before? That's ridiculous!

Good thing I gave you credit, cuz I just emailed him

Now that would have been a very very very smart thing for Corbel to do. I don't think they did that, but I am going to email them with that suggestion... Very very cool observation.

If I had an employee start in December of 2014, work through 2015, and work for part of 2016, he'd be eligible for 25% match of total 2017 wages to a SEP IRA I'd have to set up for him From this web-site: https://www.irs.gov/Retirement-Plans/SEP-Plan-FAQs-Participation-Requirements Example: Your SEP plan uses the 3-of-5 eligibility rule, uses a calendar year and has no age or compensation requirements. To be eligible for a contribution for 2015, an employee must have worked for you for any length of time in any 3 years in the 5-year period from 2010 to 2014. An employee who worked for you for two months in 2010, 2013 and 2014 must share in the SEP contribution made for 2015.

Sounds like the exact same reason. This was a public service question for all those bundled providers whose ignorance will cause potentially irreparable harm. If I could them as a client, rest assured I will take care of it for them. I would just hate to win the business only after this monster rears its ugly head...

I am aware that would be the obvious choice. The point of the question was to highlight a very very real phenomenon that is going to catch a lot of "bundled" plan sponsors off guard. I'm telling you it is going to happen, and it's all because of an overzealous indirect interpretation of a rule. That;s what I was trying to highlight. So I'm curious to know what the IRS said in response.