BG5150

I have a question on this: the formulae uses "average annual compensation" (per ERISApedia). Do we just use plan year comp for a DC plan? Often I have no idea what average comp has been if this is our first or second (or even third) year doing the calcs And where do I get the "permitted disparity rate"?

You cannot match on deferrals greater than 6%. There is nothing to say what percentage of that is acceptable. So 150% of that first 6% of pay is ok.

Can you do 150% of deferrals on 6% of pay to get to 9%? I think you can.

I think the ADP SH is anything >= 3%. ACP SH allows only a % up to 6% of pay. I think you could do like 150% of deferrals up to 6% of pay. But you cannot match on any deferrals over 6%. The 4% limit of comp is limited to the discretionary match. I don' think it's applied to SHM.

Did you ask the authors of your plan document? (Relius? Datair? FTW? Individually designed?)

@austin3515 Total brain fart! The APR is based on retirement age, not actual age. My formula was trying to pull in the wrong cell in my spreadsheet. Sometimes it helps to say this stuff put loud and have others tell me just how wrong I am rather than beat my head over it for 3 days until I figure out what I did wrong.

@austin3515 is there a reason you stopped at age 55? Do you not need to calculate stuff for the younger folks?

Thanks so much! This is perfect. But I have another question. NRA in this plan is 59.5. Do I use the APR for 59 or 60? (I'm gonna try to back into it to see which one matches my software, but I figured I'd ask.

Combination of all three. But like RBG said, check your service agreement. In most of the places I've worked we would not prepare the 5500 (or publish it for filing at least) until the work was done and paid for. ( We usually bill ahead for the next year)

Check a few. Seems like it's rounding down. Years to retirement is based on the year they turn 59.

And if I need to use 59.5, do I use the year in which they turn 59.5? Here's the data: DOB 7/15/2000 PYE 2025 Age PYE 25: 25 Year age 59: 7/15/2059 Year age 59.5: 2060 Software is telling me 34 yrs to retirement. But they aren't 59.5 yet at 12/31/2059. Are we supposed to round down?

Do I have to use the Normal Retirement Age for the plan? Or can I use 65 in my calculations? NRA for this plan is 59 1/2.

Years ago, I created a spreadsheet that calculated an EBAR for a participant given the several items in the equation. I cannot find that spreadsheet ANYWHERE (grrrr). It worked perfectly with the UP-84 table. The element I'm finding tricky is the APR to use. I know I outputted a table from Relius. But I forget which one it was. Whether it was the APR table (maybe it gave like 3 interest rates: 7.5, 8. 8.5) of just the UP-84 table itself and I then calc'd the APR. Trouble is, I'm not using Relius anymore. I'm using FT William and that doesn't give access to the underlying tables. Can someone point me to EITHER: The APR Table for Up-84? The equation to calculate the APR itself?

Do they need generous eligibility for the entire plan? Or just deferrals? You can have a short eligibility (or even immediate) for deferrals and conditions for the PS like 1,000 hours and/or a last day condition. Be careful on that last one. If they fund the "PS" per payroll, you'll have issues.

Do we know when this is happening?

Did you check the document (or the SPD or the SH notice) to see if there is a QACA?

Then I agree with Paul: issue a corrected W2 to the employee. Also, make sure this is not still happening in 2026.

Were the amounts applied correctly as loan repayments in his account?

no even if they will be or are HCEs.

(And the fact he will have to withdraw full the corresponding amount of funds (plus earnings) from his IRA account and an ineligible contribution.

Um, no. This was a deferral that the participant had deducted from their paycheck. It's THEIR money! So now it's a late deposit and they are owed earnings. Tell the R/K this is a plan correction and they MUST re-open the account. Are these brokerage accounts?

Is he planning on rolling over the funds?

I understand. I'm trying to make sure we are preparing the 5330's correctly. Do I file BOTH 2024 and 2025 and only pay the tax once (forgetting about late penalties for either the tax or the filing)? And I'm not sure how to fill out the 2025 5330. Right now, it has: 8/1/2024 $400/60 (original error) 12/31/2025 $400/60 (carry over) Total: $800/120 I THINK it should somehow be: 8/1/2024 $400/60 (original error) 12/31/2025 $460/69 (orig +tax + 15%) But what about the filings? Do we file 2024 and pay nothing on that, file the 2025 and pay $69? If so, how does that get explained in the appropriate section? Is it one line: $460/69 with explanation of carryover?

I'm guessing it depends on if the ER took a deduction for it. If they took $115, then put it in suspense. If not MOF.

Isn't the 2025 tax due by the date they file their taxes?