BG5150

In Relius, if someone is eligible (or at least the program determines them to be eligible), the show up the the ADP test with zero comp, zero deferrals and an ADP of 0.00%. One of the reasons I run my tests sorted in compensation order first. So I can see all the zero comps at the bottom.

What does Sal say? It's been a while since I read that part of the EOB. That said, I always thought that owners are not 'employees' and are not 'employed' by the company. (Can you employ yourself?) In this case are the spouses also owners? If not, did they perform services for the company during the year? If so, why no W2 or 1099? In absence of a W2 did they even technically work for the company? If not, then they weren't employees that year and the spouses wouldn't be in the test. I think most software treats zero comp and zero deferrals as a zero ADP. At least Relius does. And if your software doesn't and you want these people in, give the owners $1 comp.

I would think it was allowed, the Relius document would have a provision for it, and the Cycle 3 Non-standardized doc does not.

What if it's a partnership? Or sole proprietorship? If the company has a loss, so do the owners. Spouses on the other hand...

Do you guys just submit your refunds to the carrier (with or without earnings) and just have them withhold the 10%. Or do you get the participant elect withholding? Or, it is a timing issue, like with RMDs? later in the year, we just process the RMDs automatically with 10% withholding because the plan (and participant) gets in trouble if it's not done by 12/31 (in most cases). What if you complete the ADP test on March 10? Are you waiting on tax elections from the HCEs or are you just sending int he requests and have them w/h the 10% by default?

So a follow up question. What if the plan is adopted in 2021, but doesn't have a match provision. But it is them amended for 2023 to have the flex match. Do they have to provide the notice for 2023? Or 2024?

Never mind. The first sentence in the section that talks about the notice it says: "For Plan years beginning after the end of the Plan Year in which this document is first adopted..."

I read somewhere the flexible match notice is not need for the first year the plan adopts the cycle 3 doc with that language. Can someone point me to the cite for that? I don't see anything in my plan doc about it.

So, usually Morty electrically signs the 5500 and has EFAST credentials under his name. What happens if Lorena's name is on the 5500, but it's filed using Morty's credentials? The software let it go through.

A 403(b) plan’s definition of a Year of Service (YOS) is 1,000 hours in Eligibility Computation Period, and it switches to the Plan Year after that. The Plan Entry Date is “Immediate” So, if during an Employee’s initial year, they don’t get 1,000 hours, it shifts to the Plan Year. And, then, if they do get 1,000 hours in that next Plan Year, when is the entry date? They satisfy the YOS on 12/31 (it’s a calendar year plan). So, are they eligible on 12/31? The plan has participation comp. Do they have just one day of comp for the Employer contribution? Or do they get a contribution for the payroll that includes 12/31. That is the next year? Or do they simply enter on 1/1?

That's mostly right. Except as Lou said, the fixed match has no cap on the amount, but still cannot match on deferrals over 6% of pay. That piece is a cornerstone of the triple stacked match.

If you didn't tell anyone about the plan, then you have improperly excluded participants.

Did that NHCE have a year of service? And was over age 21?

2015 COULD have been it. It was one of the mid-year conferences, not the annual. I remember it was in Philly that year. (I barely remember it with all the drink tickets people gave me, lol.) But the question you cited was very similar to the one I posed. The panel pretty much said they believed if everyone who didn't get a contribution was because of that rule, then it was a valid business decision and you could use the ABT.

Yes.

How many people are you short for the coverage?

There's no 11-g amendment available here. They are excluded by an artificial rule, so there are no conditions to waive.

i asked a similar question at an ASPPA meeting a few years ago. The panel (an unofficial answer, of course) thought that it was OK to use the ABT if the only people not getting an allocation was b/c of the last day or 1,000 hour artificial constraint.

You should ask that question of FT William (there's no 's'). They have decent customer service. At least they did a few years ago.

Note the penalty is UP TO $2,586/day. I would think the administrator would have to be extremely recalcitrant in not filing to extract that sort of penalty. Has anyone seen the max penalty applied by either the IRS or DOL?

Does the act of not furnishing statements (and probably SARs) disqualify a plan? (I'm guessing this is a PSP) And isn't part of having a plan communicating it to the EEs? If the owner didn't give out SPDs, was there a plan to begin with? And, Lou, I would add "theft" to your "fraud" diagnosis.

In Secure 2.0 there is a section on LTPT that references 2 years of 500 hour of serivce and it is set to take effect in 2025. Does that override the current rules? Or do we use 3 years of 500 hours UNTIL 2025 then scale back to 2 years?

This is hypothetical: Owner wants to add a facts & circumstances hardship provision to plan in order to take a large distribution. As plan administrator, he will be the arbiter of "heavy and immediate" need. What if the plan gets audited by the IRS and they determine the need really was neither heavy nor immediate? Like, maybe he used it to purchase a stake in a thoroughbred race horse or a down payment on an office building. What is the redress? pay it back? Disqualification?

Will there be a snap-on amendment? (I know it's way too early)

But what if a plan does not allow Roth deferrals at all?