BG5150

it's been a while since I've had to deal with a 1099 for a 402g failure. If done by 4/15, does the participant get 2 1099's? One with code P for the excess and one with code 8 for the earnings? Afterward, it's just one for code 8 for the earnings, right?

Was the suspense account subject to earnings, or was it a cash account?

No key EEs.

Company sponsors two plans, one for union EEs and one for non-Union EEs. Do I combine them for Top Heavy, or do them separately? Or, do I have the option to test them together or separate?

I would tell them to get a second opinion from counsel who specializes in ERISA matters. This sounds like someone taking complex patent law advice from a divorce attorney. Just because someone is an lawyer, doesn't mean they know what they are talking about in all fields of the the law. (Would you ask your gynecologist what to do about Parkinson's Disease?)

Could it be 7/19/21, 18 months after hire, or more specifically, 6 months after satisfying the eligibility requirements?

Is anyone going to put up a stink if the owners do not fund the match for themselves? Did they do the Cycle 3 restatement yet? Going forward, they can do a flexible discretionary match under which they can pick and choose who gets what match. Including not including themselves.

And I found it in the BPD. (Not sure how I missed it the first time...) (ii) shall be made, as operationally determined by the Administrator, from the Participant's Pre-Tax Elective Deferral Account or the Participant's Roth Elective Deferral Account, to the extent both Pre-Tax Elective Deferrals and Roth Elective Deferrals were made for the Plan Year;

But issuing from Roth first then leaves in place funds for which earnings will not be distributed tax free. Would you rather have a tax bill of $4,000 now and have the earnings on that $4,000 grow tax free? Of have a zero tax bill today, but have the earnings over the years be taxable later?

Plan is failing ADP test. One HCE getting a refund had both Roth and Pre-tax deferrals during the year. What is the protocol for doing the refund? From which source(s) do you start using amounts? Is it a plan document issue? Administrative procedure? Does the participant have to make the final call? (Is that even feasible if we are coming up on processing deadlines?) As usual, your thoughts are appreciated.

How could they be part of testing if they do no have any plan compensation? The remuneration they get on the 1099 is not earned income or W2 or anything that would fall under 415 or withholding wages.

What happens when the plan's method of crediting hours of service is the elapsed time method? is a Year of Service merely when someone works for 12 months straight (or credited due to spanning rules)? How does that translate to calculating Otherwise Excludable? I have a participant in q 403(b) plan who was hired 7/3/18 and worked 350, 650, 675, 720 hours in '18, '19, '20 and '21. Is the OEX rule purely 1,000 hours in a year, or can it be based on elapsed time and depends on the plan's definition? can this person be OEX or no?

I suggest following EPCRS. The excess allocation goes into a SUSPENSE account and can ONLY be used to offset Employer contributions (not including deferrals). And, that no ER contribution may be funded by the employer until the account is exhausted.

But in the original scenario here, how can that first 'plan' pass coverage? No one is benefitting. is a coverage ration of 0/0 acceptable?

How does gateway work with component plans? Do only those in the x-tested 'plan' get the GW and the contribution-basis plan can be bypassed? And remember, the x-tested component needs to pass via the ratio test, otherwise you'll have to run the ABT for everyone in all component plans together.

People who elected zero have an affifmative election on file. Call the document provider. Maybe they can help you get the doc they way you want it. Also, you won't know the overall cost of the SHM vs QACA. You could assume, all the auto enrolled people will stay. But who's to say how many people will sign up if you just put in the basic SHM? You can always do a 'worst case scenario' where everyone defers enough to get the max match, and, of course 3.5% will be less than 4%. But any comparison you come up with is pure conjecture at this point. I really dislike trying to do cost analysis with a match, because it very rarely goes the way you think it maight.

I figured it out. It's a relius quirk...

Our document has several choices, I'm sure yours has similar options: 1. Applies to everyone 2. Applies to anyone with a deferral election less that the automatic threshold 3. Only those with no election in place Do you agree with the vendor in that a QACA is the best choice for the Employer and its employees? Why not just a regular SH match?

I have an HCE with a 402(g) excess of $500 for 2021 (he deferred $20,000) And I have a NHCE with a 402(g) excess of $135 (he deferred $19,635) Neither catch-up eligible. I thought you kept the excess in the ADP test for the HCE and removed it for the NHCE. For some reason Relius is removing it for both. I just want to make sure I'm understanding the rules before I start bugging them.

It can be self-corrected. Use EPCRS. Some people say to use the DOL calculator, some say no. I was always under the impression, that the calculator could only be used if you are filing under VFCP for late deposits. However, I know many people in the industry use it even if they aren't filing the correction with the DOL.

I don't have access to the EOB at the moment, I thought this was addressed in there. Participant terminates December 28, 2020, but the next pay date is January 5, 2021. Is she in the 2021 ADP test even though she did NOT perform services for the employer in 2021?

I thought that if they achieved the service but left before entry date and got rehired later (and after an otherwise entry date has past) then they are eligible immediately. (sencond example) But if they didn't get the service requirement the first time and only by the spanning rules that get it, they they will enter the plan on the next entry date. (first example)

Plan specs: age 21, 2 mos service, monthly entry. Participant: DOH 3/7/21 DOT 4/29/21 (not 2 month svc) RH 10/5/21 When is entry date? Rehire date or 11/1/21? Slight change DOH 3/7/21 DOT 5/17/21 (2 months but did not make entry date) RH 10/5/21 When is entry date? Rehire date or 11/1/21?

The Relius document section that deals with that is titled "Waiver of conditions of Participants NOT employed on the last day of the Plan Year." (emphasis in original) I'd say it's okay to change now. Are they having a lot of people retire before the end of each year? Side note: I always draft my "everyone in own group" plans with no allocation requirements at all. As you mentioned, you can artificially create those conditions anyway. Plus, it allows you to pick and choose for whom you want to waive those conditions. For example, if Mary was a long-time, valued employee who decided to finally retire during the year, you could give her an allocation (under my document conditions) without having to do an -11(g) amendment.

The way I understand it, the participant has cash withheld from their paychecks that then stays in the the employer's bank account. The ER then uses that cash to purchase company stock and transfers that stock to the ESOP. The DOL's rules try to ensure the ER does not keep that cash for longer than it should and turn it into plan assets as soon as it can. So it really doesn't matter if the funds are in cash or co stock, it matte5rs who has control over the funds: the company or the trust.