BG5150

Would doing that throw the doc out of prototype or VS status?

Participants always get the required notices. To me, it has nothing to do with balances. Except Safe Harbor and SPDs. If they aren't contributing, they don't get one.

In this case, if the computation period is the Plan Year: What happens is someone quits in March with 250 hours which is under the threshold to have a break is service. Wouldn't they get their one (1) Year Break in Service on 12/31 that year, or at least on the next 1/1? (And what does your Section 7.02(e) and the rest of Article 7 say?) What if they quit in March 2021 with 250 hours, get rehired in Sep 2021, work 100 hours, quit. Get rehired in next February 2022 and work 40 hours. Now, no matter what the computation period is, in Feb 2022 they have the requisite BIS and should be able to be paid out right away. Heck, if they never worked 500 hours in a year, they might have two, three, five, eight consecutive one (1) Year Breaks in Service under their belt.

Then it gets prorated. Not the 19,500, but the 415 and comp limits

402(g) is a calendar limit.

Scooby, I meant CASH BASIS plans. I'll edit my post...

Cash basis plans, I only count the number of accounts on the custodian's trust report.

Sponsor had excess DB assets and moved to a QRP in a suspense account. We have been transferring roughly $50k a year (whatever the 415 max is per year). 2019 was the 7th year. There is still about $180,000 left in the account. What happens to those funds?

I do it this way. Because if for some reason the DOL comes knocking first, you lose the ability to file under DFVCP. Or am I wrong in that?

If it was merged, there were no distributions, so no 1099-Rs. If it was actually terminated, the employees should have had the option to roll it over to plan B. If so, then 1099-Rs should have been issued. Be sure to bill UP FRONT for any work you do for them. Make it known you are doing the work as a courtesy and this is ad hoc work, not subject to your previous service agreement. If it is on ADP's platform in 2020, why isn't ADP preparing the 5500? But, hold on, what did the disengagement letter say? Was the plan terminated and moved before you got the letter? (Who did the plan term/merger paperwork for plan A?

After tax is tested under ACP and ACP only. So in the example above, the ACP test fails completely. Although salary deferrals (including Roth deferrals) are tested in the Average Benefits Test, I don't think voluntary after-tax contributions are part of the ABT. I am not sure if they are taken into account to determine the allocation percentage to Key EEs for Top Heavy purposes like deferrals are. It's been a LONG time since I've dealt with voluntary after tax contributions in a 401(k) plan other than legacy contributions that are being distributed.

If her hours drop and she doesn't want to defer, then she can merely stop. You cannot impose a service requirement (hours or elapsed time) to continue to be eligible to defer once the initial requirements are satisfied. (You can for match or profit sharing).

They certainly are allowed. But if the non-qualifying assets are more than 10% of the plan assets, the ERISA bond needs to be for at least 100% of the value of the non-qualifying assets. Basically, if it can be held in a brokerage or bank account, or held at a custodian like Voya or John Hancock or Lincoln Financial, then it's probably qualifying. I've had plans invest in coins, artwork, buildings. Those are examples of stuff not qualifying. I never did like the term. Makes them sound shady or something.

The term "Qualified" assets has nothing to do with their appropriateness. It has to do with the nature of the asset and where it's held. Found this in some of my old material: Qualifying plan assets include any assets held by certain regulated financial institutions (such as banks, trust companies, loan associations, credit unions); assets held in mutual funds; assets held by insurance companies and participant loans. Assets that are not qualifying plan assets are non-qualifying plan assets. Examples of non-qualifying assets are non-participant loans, property, real estate and limited partnerships.

Only if 100% of the assets are in qualifying vehicles. Otherwise a 5500 with Schedule I will be needed. That will also drive the bond coverage.

It CAN stay in the account, but doesn't HAVE to. I'd just correct it.

If the husband and/or wife own the business, the daughter is also considered an owner and thus an HCE, too. If there no NHCE employees, then testing is not needed. The only thing they need to consider are the 402(g), 415 and deduction rules (if they plan on giving a generous match or profit sharing. Amend the plan to allow all Employees hired on X date are automatically in the plan. Any future employees still have to satisfy the requirements. Do they have any other employees? Plan to? Keep in mind, the compensation they pay the daughter must be reasonable for the work she performs.

If someone is a participant by the sole reason of the long time/part-time rules, then they are excluded from testing. (I don't know if you CAN include them if you want...) But this can get onerous for a big company with lots of PT workers. Think a restaurant group.

From 4975(f)(5) The term “correct” means, with respect to a transaction— (I) to undo the transaction to the extent possible and in any case to make good to the plan or affected account any losses resulting from the transaction, and (II) to restore to the plan or affected account any profits made through the use of assets of the plan. So: in the fist case, there are no losses to the plan or accounts if the assets would have lost value had they been deposited timely. In the second case, you would need to look at the employer's bank account to see what the "profit" was.

I thought the correction was to add "lost earnings" to the late deposit. Not earnings gained by the employer's bank account. What is the exact reg that details the correction of late deposits? I only found 2510.3-102 which is the definition of participant contributions as plan assets and the timing of them. Where does it say lost earnings must be applied?

That's sometimes good. I rarely put fail safe language in my docs.

Keep in mind the long-term part time employee rules that will take effect next year.

If the "amount involved" is zero, I don't file a 5330. The participants didn't lose out on any investment experience. If anything, they got a (small) windfall in the case the principal is greater than what would have been has the deposits been made timely.

I wouldn't either. If there is a loss, I just allocate the principal with zero earnings.