BG5150

Plus, you are taxed twice on the interest payments.

I just searched the publication and it mentions vacations only twice: as an award or unavailability of an automobile if the ee is on vacation.

How was it done in the past? If never, have the plan administrator come up with a method and just stick to it.

$0.02, that's just what I was thinking. It seems very suspicious that all three decided to say, "not only do I not want to put money into the plan, I never want to and also forgo any sort of employer money forever." It COULD be an innocent error, that the owners game them waiver paperwork thinking it was the right form to give them. Also, I have seem people waive rights to join a plan because of a faith that precludes them from entering into any transactions that involve interest of any sort. Maybe these three people are of that faith. And, if they merely wanted to elect zero deferrals, the ADP test will fail every year, and with the exception of catch-up, all the owners' deferrals should have been refunded. For 2014 and earlier, they would be in a refund/1-to-1 or QNEC correction.

Unless those other employees never worked more than 1,000 hours in a year, I don't see how the plan doesn't fail coverage each and every year. Remember, they may have waived participation, but they are still counted in 410(b) coverage testing as eligible, not benefiting. Do the owners make 401(k) contributions? If so, how can the ADP test pass any given year? [side note: did they irrevocably waive participation, or just chose not to make deferrals? If the former, something doesn't seem right. ]

Maybe the person is getting confused with the Allowances worksheet. It's only to be used with periodic or annuity payments. (To be honest, I'd have no idea how to apply it if somebody put something in there. I'm not sure if my software has a place for that)

Many times a lot of fees are flat for all plans. So some plans you make money. Some plans maybe not so much. Exit fees are more than just exporting the data. There are internal processes to make sure the client is closed out on the systems and the data properly stored and archived. As to your point #3, maybe your firms should start charging a discontinuance fee, too. Maybe not $500, but something that adequately pays for your time tending to the plan after they've left.

So, I pay you $2,000 a year to do a job for me and you are going to charge me $200/hr more to explain it to me? Not a very client-friendly business model.

What testing does he need to pass if the plan is to be Safe Harbor?

It comes down to basic EPCRS principles: we have an operational failure, and we need to put the plan (and participant) in the position they would have been had the error not occurred. To me, it's an excess allocation of deferrals, and can be distributed to the participant (with earnings).

There is no reason, since all non-frozen plans perforce allow new participants in on the first day of the plan year, for 5500 software to just assume that the end of last year count is correct for the start of this year. If the 5500 software prepopulates this year's starting counting with last year's ending count, give serious thought to finding a new 5500 software provider. I know. That kinda was my point. If the software is merely carrying forward last years data, then's its wrong. But if it is known that it is just a carry-over, then we can safely ignore it for all plans. However, if the program is calculating these numbers, or flat-out reporting the BOY should equal EOY, than the program has egregious flaws and should definitely be replaced.

Does your 5500 program actively calculate the participant count each year? Or, when the data carries over, does it just pre-fill last year's close?

Plan eligibility and the deferral start date can be two different things..

I don't think 1-participant plans (properly indicated on the SF) are shown on the DOL website.

Unless the sponsor can use the psychic hotline to know this person was going to terminate after the in-service distribution I am not sure what that procedure would look like. True. I missed the part about in-service. Must be the Friday morning reading comprehension lapse...

Also, the plan had an operational error, so they should put in procedures to avoid this in the future.

I have a SH plan that terminated in 2015. All assets are paid out. All participants received their 3%. The 100% owner did not. What would be the ramification if he did not give himself the SH? There is a company in name only now. All company assets were sold.

Is there a last day rule in the plan for PS?

I disagree with it on philosophical grounds. Most people make their decision on what type of deferrals to make based on their tax situation and perceived tax situation come retirement time. Why should my choice of taxation of my deferrals affect whether or not the company matches my contributions?

Remember, SH match determined on a payroll basis does not have to be remitted to the plan until the end of the quarter following the quarter the deferrals were made. So, if the ER wants to better manage cash flow, they could make 4 deposits a year.

If not 7/1/15, then the next quarterly entry date of 10/1 I would think.

Could you reallocate the forfs as a discretionary match? Eliminates the need for creating new accounts.

Why wouldn't someone who only took SOME of his or her benefit not be reported?

I agree with chc93. It will probably be easier to still file the 5500-SF (with the 1 ppt box checked) than risk filing an EZ, or no filing at all. Unless there are wacky investments, the 10-15 minutes a year you'll use preparing the form will be a lot less frustrating that tryin to deal with the IRS or DOL trying to explain why there was no filing.

Would it be difficult to get something in writing from the motel stating that?