BG5150

How many people are we talking? Two or three NHCEs leaving, could be because a competitor stole them. More than that, it's a very odd situation indeed when your entire staff quits. Do they all qualify for the PS already, or will it be all via -11g?

Do employers get a deduction for the corrective contributions?

Not if the plan requires 1 YOS for entry.

Side note: what if the NHCE group has a zero ADP (think SH match plan and no staff participates)? With OEX or not, the ADP is zero. So no correction? I always thought this correction in EPCRS was off base. What if the person missed is a newly-hired executive who was planning on deferring 10% of pay. But the staff puts away nearly nothing. Now the participant is stiffed on the QNEC and the employer makes out b/c the ADP is much lower than what the participant would have started out with. Or, the flip of that. Maybe the person skipped was a minimum wage data-entry type, and the rest of the staff are high paid science researchers or something. They are all putting away 8-10%. Now the ER is penalized (I know, it was their fault to begin with, no tears here) b/c not they have to give a 4.5% QNEC to someone who probably wasn't gonna defer anyway. I wish EPCRS just said do a flat 2, 3, 4% or something. Also, if the correction happened early in the year, they have to remember to do the correction the next year. SH plan would be even more difficult to remember--no ADP testing generally.

What if the person you are correcting would be in the OEX group and the group as a whole has a zero ADP. Would the correction be zero?

Too late to do a QNEC, I think.

Key Employees. Not HCEs. An amendment to the contribution limit would probably be effective 1/1/23. So, the Keys should know ahead of time whether or not they can contribute.

The EOB says that's, well, undetermined as yet.

I thought you HAD to test the union EEs separately.

There are other partners to total 100%. He's listed as VP, too.

But EPCRS seems to say that after 4/15, the deferrals must be refunded (if they contravene 401(a)(30)). So in summary, after 4/15: Excess in one plan, must distribute per EPCRS. Excess in one or more plans, cannot take until distributable event. Is that correct?

Is it the insurance person asking? I don't know the intricacies of these things. I could picture (rightly or wrongly) that each bond could say it covers the first $x of a loss. So if you have two $20,000 bonds that say that, and you incur a $30,000 loss, might only $20k really be covered? And why get two bonds? I'm sure one for the entire amount would be cheaper than two smaller ones...

But the plan risks disqualification if they don't remove the excess timely after 4/15, so the administrator MUST refund the excess. But, if the excess is due to contributions to two plans, it CAN stay there until they take their money, right?

I don't think so.

I would ask the insurance company. Are the polices consecutive or concurrent?

EPCRS gives a correction for "[f]ailure to distribute elective deferrals in excess of the §402(g) limit (in contravention of §401(a)(30))." 401(a)30 just points to 402(g). Can there be excess 402(g) deferrals NOT in contravention of 401(a)30? And also, the plan MUST remove the 402(g) excess (in contravention of 401()(30)), or the plan risks disqualification. I seem to remember if the excess deferrals were there after April 15, you didn't do anything until the participant took their money (year?) later. And I read that if the excess deferrals are NOT in contravention of 401(a)(30), then the deferrals HAVE to stay there until there is a distributable even. Again, under what circumstances would that be?

On the client's census, they tell us that Jim owned 2.5% of the company last year (S Corp), and belonged to the Union. He made $121k in 2020. This year (2021) however, they tell us he owns 6% and is still in the union. Now he's an HCE for 2021. He's the only union person that defers (there's only one other). So the ADP test is failing. I thought I remember reading somewhere that a person cannot be an owner and a member of the union at the same time. How can someone be part of management and be a union employee? If that's true, how is it handled?

It's a 403(b) plan. Not really "profit sharing". UPDATE: they paid him the $7 in earnings.

Nate, you da man! It was there in the deferral section. Thanks!

No one? A solution floated was not doing a waiver, but just excluding people who are at risk of losing SSI benefits from the PS allocation. ADP test and coverage is fine, so neither test will be affected materially.

Is there even a nondiscrimination test for fees? I believe too many people think, "oh, it's only negatively affecting the owner or HCE's, so the DOL will be ok with it."

Do you get credit for the gross or net amount you bill? I worked at a place where your bonus was partially calculated on your billings for that year. It was based on the gross amount in our shop, but freebies were always scrutinized, so you couldn't bill $100,000 gross, but have a $75,000 net.

that said, i looked through our BPD and I only see that the administration fees can be paid against the trust. Nothing about specific apportionment that I can see.

What provision in the plan allows him to do that? Do any of the underlying documents say the plan administrator can pick and choose the accounts the fees come from?

Old job: we would charge for any amendment. It wasn't too much as to prohibit someone from making a change. It's time and effort, after all. New job: many clients have a document maintenance fee. They get all required amendments on the house (with the exception of the very first one we do for them--new plan or takeover). And they get one "free" discretionary amendment per year. Side note: Datair docs have an add/remove trustee resolution already premade. We made use of it often.