jquazza

You have a nondiscrimination problem if you make a QNEC solely for an HCE.

I have a client with two plans, a 401(k) with a 3/31 plan year and a PS with a 6/30 plan year. The plans need to be aggregated for the top heavy test. The plans are top heavy. To calculate the minimum top heavy contribution, should we use the compensation for the 3/31 plan year or the 6/30 or something else.

Besides that you should not aggregate the contributions of two unrelated employers for 415 purposes. You only do that for the 402(g) limit. Now, you have to be careful because two employers might not be considered related or part of a controlled group for coverage, but might be for 415 (80% common ownership for coverage vs 50% only for 415.) So, if you work for two unrelated employers who each provide a plan, you could potentially get $40k in each without violating 415.

I don't think it matters that much to him. Anyway, thanks for your response.

The sponsor just didn't sign any documents yet. The broker who sold the plan was anxious to get his commission and got them started on a form he designed himself. Is that surprising to you?

A new client is trying to establish a 457 plan. The sponsor started withholding deferrals before even signing the plan document (which hasn't been done yet) and has been holding the withheld deferrals in its general account. How do you fix that problem?

Has anyone heard anything about a new IRS address for the 5558s? One of my colleagues came up with an address telling me all 5558s had to be mailed there from now on. I can't find any confirmation on the IRS website and, of course, the instructions haven't been revised yet.

There is no such thing, you can apply for a waiver of the penalty and explain your power situation to the IRS a posteriori.

In post egtrra time, the real question is why are you doing this? It seems to me one PS plan would suffice if you just determine different rates for different groups (new comp approach.) It seems you are setting yourself for a lot of headaches from the get go (approval from the IRS for starter,) then wait until you have to file three 5500, one for the PS, one for the MPP and probably one for the Master Trust you will end with if you comingle the assets from the PS and the MPP into one trust. On the other hand, the benefit of having an MPP is ... wait a minute, there isn't any.

414(s) comp is defined in the code, not in the plan document. What you probably mean is that the plan document defines what comp to use in the tests. If the document is flexible, both "date of entry" comp and full comp satisfy 414(s), so use whatever suits the employer objectives best. /jq

Nonresident alien w/ no us source income are excludable from the coverage test. What is this Canadian guy's advantage in making contributions to a US 401(k). The Canadian government is not going to give him a tax break for his contribution to the 401(k) (it is not Canadian qualified) and the US government will surely tax him when he takes a distribution. Don't they pay enough taxes in Canada already hey?

Unless each business units qualifies as a QSLOB, you should probably aggregate the plans for coverage. You can test them separately for ADP/ACP only if they pass coverage independently. Based on this, when you test each plan independently, you might want to consider only the contributions made to that particular plan. As far as earnings are concerned, the plan document should dictate what method to use. If the document is flexible and since there is a standing transfer agreement between the plans, it would be reasonable to include the gains from both plans.

Why don't you just treat him/her just as you would a foreign beneficiary? Send the distribution with US tax withholding according to the tax treaty of the country he/she is from.

Can you clarify your response, when you say "pass coverage separately," do you mean each independently or can I aggregate A & B (A will never pass coverage by itsefl for it covers only the owner.)

Does Gateway applies to each plan sponsored by employers part of a controlled group? Specifically, I have a client who owns three companies (A, B & C,) He si the only employee of A (A sponsors a generous PS,) B sponsors a 401(k) w/ a PS provision and C sponsors a 401(k) w/ a match provision, no PS. Will the sponsor be required to provide gateway minimum to employees of C? Or will that depend on whether A & B can pass coverage independently of C?