BG5150

Adding any contribution other than the SH contributions remove the Top Heavy protections. @metsfan026 is this new group new employees? Or established employees who weren't eligible for the plan to begin with? If they are brand new employees, unless they are owners or family members of owners, they probably won't be HCEs. So a PS might be the way to go.

Lo- Lo- Lo- Lo- Loooolaaa!

How was it a mistake of fact (I am very conservative when if comes to MOF). i see this as an EPCRS issue. But I can envision a problem with the payroll system if they try to 'adjust' the amount of deferrals on the W2 (12 D or 12 AA) when the YTD report would show differently. Also, I would not trust if we did do the MOF, the payroll run would be correct. Remember, there were at least SOME taxes withheld before the deferrals. So, if they ran the extra amount through payroll, they would have to omit the taxes previously taken. And who gets the earnings? The company? I cannot see that is right. Participant? If so, how do they get them? From the plan in a separate transaction? From the company? if the latter, then gross income for the affected employees would be higher than their actual earnings from the company, inflating what the company would have to pay in payroll taxes and remit on the W3.

No one?

How does the accountant not know that? Isn't that their job to know? (Sorry, been a tough day. Just venting)

The plan administrator should follow the procedures in EPCRS to cure the excess allocation. It's section 6.06 if I'm not mistaken.

(And lets say for point of discussion, this is all Pre-tax)

Company had a bonus run mid-March. They told everyone mid February that the employees would have to go into the recordkeeper to change their deferral rate for the bonus if they wanted it changed, then go and switch it back after the run. This is a 360 integration and the recordkeeper sends a file feed to the payroll company with deferral changes on a pre-determined schedule. Turns out, the payroll company did not get the change file until several hours after the bonus was run. There were some 200 people who changed their rates and nearly all lowered or eliminated the deferral for the bonus. So now we have excess allocations. Simple enough fix: distribute the excess amounts (with earnings) to the participant. However, some people had very large amounts deferred. How does the company/payroll take into consideration that amount when looking at the 402(g) limit later int he year. many of these people max out each year. For example, Laura was deferring $2,000/month, intending on maxing out in December. Her bonus run had a deferral of $15,000 (yes, deferral was $15,000, not the bonus!). So, at the moment her YTD deferrals aer $19,000 (and will be $21k on Friday). If we refund her the $15k, it brings her PLAN contributions back to $4-6,000. But int he PAYROLL system she will still be at $19-21,000. Do they just go in and manually change the YTD 401(k)? I don't want them to stop her after May and having true deposits of only $10,000.

What does this mean? What kind of trouble? What is the remedy? For the participant? For the plan? In other words, what is the actual risk to the participant and/or the plan administrator/sponsor?

Where can I get a copy of the current ERISA, updated currently? I'd like to do some research on something and I want to use the primary source. And NOT the 1974 version, lol

What are the consequences if a plan allows self-certification of hardships and participants either lie or just don't understand the rules and take withdrawals that are not covered under the Safe Harbor rules? Does the participant get in trouble? Does the plan sponsor? What about a 3(16) Plan Administrator? (And side note, are self-certifications relegate to only SH reasons? Or can it be applied to a facts & circumstances provision?)

We use Relius Docs too, and this is what it says in the BPD. @EBECatty did you look in your BPD? If you cannot find it, I would put in a ticket with the document provider.

I think there is a PensionPro lite?

All that stuff Peter posted is about an EACA. Not a regular ol' ACA.

@ERISAlaw have you tried contacting Relius about this?

Tell him to speak with his accountant. But I believe that ship has sailed. Aren't deductible contributions due before the company files its tax return? (In this case sometime in 2024?) Also, they will be messing with the 2025 415 limit, as anything after Oct 15 the following year (for a calendar year plan) is considered a 415 addition in/for the year it's contributed. These are the rules as I understand them.

Participant asked for deferrals to be taken as Roth, but it was done as pre-tax. Started May 2023 through last week when they left. What is the remedy for that? In plan Roth rollover? The thing that gets me is it was the participant who was in charge of entering the deferrals into the payroll system. 403(b) plan, but that shouldn't matter, I think.

I miss the "good ol' days" when we could call Jacksonville and get an answer in 5 mins. From people who actually used the software. Not some guy in the programming department.

We are transitioning to FT William soon. Not sure if this is the reason, but it could be. I'm not privy to the C-Suite shenanigans here.

I'm sure Datai would be happy to share some screenshots and overviews and other marketing material. I used Datair in the past and I liked it. Less powerful than relius, but who really uses it to its capacity as a TPA? Unless you are a daily shop and need pricing and transactions at market, there are other options that are just as good but cheaper.

I don't understand the Profit Sharing --> Yes --> Type --> Match/NE

I don't have a link, but I'm sure there's a bunch of stuff out there. This is a boutique type of calculation, I would consult with your TPA or bundled service provider..

As to the W-4P. Did the distribution paperwork not include a section on withholding? Most of the forms I've seen have a section on taxes where they can elect more than 20% or any percentage if the withdrawal is not eligible for rollover. If so, I don't send a W-4P and just use the form.

Side note: If they know this NHCE will not ever defer, could they put in a triple stack match for next year to get the HCE up to the 415 limit, or close to it? 6% SH enhance match 4% discretionary match 85% of deferrals up to 6% of pay (or whatever formula works to max them out) Remember, only the discretionary match has the cap of 4% in dollars. The company cannot match on deferrals above 6% of pay in any of the tiers and stay SH compliant.

For the discretionary match to also be ACP SH, like Artie said, it has two independent constraints: The discretionary match piece cannot match on deferrals on over 6% of plan comp. Also, the total dollar amount of the match awarded cannot be more than 4% of comp. So, your discretionary match could be 66 2/3% of deferrals up to 6% of pay. It satisfies both of those conditions.