jquazza

Here's the original test. For NHCE2 I used DOE comp hence the higher contribution rate.original failing test NO NAMES.pdf

Mike, I'm probably getting confused. I had dealt with a similar case a long time ago. I think it was subject to the minimum funding rules and that's why we had the excise tax. Anyway, that test is failing and there's no way around that. There's an HCE with an EBAR more than twice of any NHCEs (using DOE comp). The report from the previous TPA doesn't show any analysis that says the plan passed. ABT passes but that's not enough. So, I need an 11g amendment by 10/15 to increase one NHCE's contribution. If funded by 10/15, i can count it as 2014 contribution. Can I deduct it in 2015 anyway with no excise tax? If funded after 10/15 and before 12/31. Count the contribution in my 2014 general test, but in 2015 415 and that's it? No excise tax either?

I am not assuming anything. it seems they were careless and in the report they sent the client, you clearly see an HCE with an EBAR higher than anyone else.

I picked up a new comp plan. Previous TPA calculated PS contribution which ends up failing the general test. I understand I can still fix it with an amendment. My question relates to any penalties or excise tax associated with it. I seem to remember that if we the sponsor makes the additional contribution by 10/15 and wants to take the deduction for the previous year, it will be associated with a 10% excise tax. What if the sponsors takes the deduction in 2015. Is it just a 415 issue and as long as I don't have one, there's no penalties?

Thanks for the citation Peter. David, I let the investment adviser deal with investment related issues.

401(k) Plan Sponsor is changing service provider. Few Participants who held a guaranteed fixed income fund are being assessed a "market value adjustment." Sponsor doesn't feel participants should be penalized for its decision and would like to make up the charge to the participants. Would you count this fee reimbursement as a contribution to the plan?

I think it is only a requirement to obtain an EIN when the trust has UBTI and the plan has to file a 990-T.

Thanks for your answers. I think we'll follow Austin's way of looking at the problem. Failure is really insignificant and participant is in the same position he would have been if the error had not occur. /jq

Medical Practice 1 had a 401(k) Plan (Plan 1). Company dissolved and plan is instance of terminating. Most doctors went to work for Medical Practice 2 (new unrelated company.) Practice 2 sets up own new 401(k) (Plan 2.) Dr. K had self-directed brokerage account in Plan 1 (SDA1.) Practice 2 sent deferrals and PS contributions to SDA1 for about six months. Then Dr K established a new SDA for Plan 2 (SDA2) and all assets were rolled over from SDA1 to SDA2. What issues should I be concerned about? Does this constitute a PT? How do you book these transactions in the Forms 5500 for Plan 1 & Plan 2?

Medical Practice 1 had a 401(k) Plan (Plan 1). Company dissolved and plan is instance of terminating. Most doctors went to work for Medical Practice 2 (new unrelated company.) Practice 2 sets up own new 401(k) (Plan 2.) Dr. K had self-directed brokerage account in Plan 1 (SDA1.) Practice 2 sent deferrals and PS contributions to SDA1 for about six months. Then Dr K established a new SDA for Plan 2 (SDA2) and all assets were rolled over from SDA1 to SDA2. What issues should I be concerned about? Does this constitute a PT? How do you book these transactions in the Forms 5500 for Plan 1 & Plan 2?

No, it's a tax on the sponsor, not on the plan.

Age based and designed based safe harbor, somehow, these terms seems to contradict each other. How can you have a designed based SH age based allocation?

When using the 1-to-1, you have the option to allocate the QNEC only to the NHCEs who are still employed at the time of the correction.

And if I might add my grain of salt (kick it up another notch on the conservative scale,) you can only use the terrm w/<500 exclusion if the reason the participant was excluded from the allocation was actually the last day or service requirement. Say a plan excludes hourly employees and has a last day requirement for the match. An hourly employee with five years of service quits with less than 500 hours, that employee is not excludable, because the reason he didn't get the match is not because he quit, it's because he's hourly. I have seen SOOOOOOO many plans missinterpreting that rule.

If you look at treas reg 1.410b)-7(d), it clearly says that plans are not aggregated for nondiscrim (adp/acp) if they are aggregated solely for the purpose of the avg. ben. ratio test