BG5150

How much would a straight QNEC cost? Weigh that against the cost of the VCP. Probably costlier to do the straight QNEC, but worth a look anyway.

I agree that it can be used for 2020. But tell them to be careful of the deduction and the deposit.

Only if they worked 1,000 hours in 2020 or they do an 11(g) amendment for this person. And provided they aren't an HCE.

Whenever we send out a document or amendment for signature, we suggest they go over it with their counsel.

But not when switching providers, right?

Often, the sponsors of the documents will also provide interpretation of the document to some degree. Or rather, they go back to the document's author (Relius, FT William, etc) with help for support. If the plan sponsor is no longer a client, the record keepers won't support it any more. Also, I sincerely doubt the new record keeper or TPA will want to do required amendments to plan docs they do not directly service. Can the cost of the new plan document be passed onto the participants? Or is that a settlor function?

It is too late to do that now. Any 11(g) amendment must be done by October 15 the following year (for a calendar yr plan). In this case 10/15/2020.

Earlier in the year I was getting a similar message, but with Relius. I think it was returning EFAST2 error code, not necessarily something in the software itself. I would contact FT WIlliam to see what they say. Their support is very good. Relius corrected that somehow. Whether just just eliminated that code from their validation or if EFAST fixed it on their end, I don't know. Side note: I see you typed "principals," plural. And "'common law' do not" also implying plural. So, why only two actives? Did people leave? And you said the principals defer. Only one acct if both (or more) principals deferred?

Did any Key employee have an allocation at all in 2020? Remember, salary deferrals count as an "allocation" for considering the TH minimum. The TH minimum is the lesser of 3% or the highest allocation to a Key employee. That said, if the plan has a 3% Safe Harbor contribution, chances are the TH minimum is already being satisfied. If the plan allows, the match MAY be able to offset the TH minimum due. I do not think it is mandatory that they do. Check the plan doc. Don't confuse Key EE and HCE. Though it is rare that a Key EE is not an HCE, it's quite common for an HCE to not be Key. Key EE's may not have to get the TH contribution, but check your plan doc.

Did the administrator administer the DRO in a manner inconsistent with said order? It is not up to the administrator to analyze the DRO for fairness. There is a checklist they go through. There are some items that MUST be in a DRO and some items that simply CANNOT be in there. Once all the boxes are ticked, the administrator takes steps to satisfy the DRO as written. You should consult with your attorney as to the next steps.

Sounds like the OP wants direct investment...

Can you even hold those types of alternate assets in a brokerage account?

You would think that, but it does happen. Some places run deferrals through payroll so they can get them to the record keeper electronically.

Remember the bonding requirements for non-qualifying assets.

My first thought was in line with Catty. In addition to auto enroll, if the plan is 3% SH or TH, then, again, there is the potential of having a lot if small, unclaimed accounts. Especially if the contribution is made well after EOY.

Find yourself a lawyer well-versed in QDROs. NOT the financial guy. There are a lot of moving parts to a DRO regarding a pension plan.

There are many, many things not nailed down by the IRS re: qualified plans.

Not if it's an S-Corp. In such a setup, the partners (should) take some W2 income, taxed as ordinary income, and the rest is pass-through dividends taxed at the dividend rate. That is reported on the K-1. (That's my understanding of them) Dividends are not includable in income for plan purposes. Therefore only the W2 wages are used for S-Corps.

If someone does not get an employer contribution (other than match), then there is no gateway needed. And I think you mean "highest HCE %." Also, you only include contributions that appear in the general test for the highest HCE %. So no match. Only Safe Harbor nonelective and profit sharing.

Was there an article or TED talk ont his somewhere recently? We have received several calls regarding these Roth conversions. I may start a separate thread with my questions.

If a plan adds voluntary after tax (VAT) to a plan, I understand it is tested under the ACP test. What if it's a Safe Harbor plan? My question is does the Safe Harbor Match get tested with it? If a SHNEC is treated as an ACP SH, does that get tested under ACP with the VAT?

So, if I have: Company A: 30,000 W2 Comp Company B: (10,000) loss Company C : $50,000 net self-employment I use 80,000 as comp.

I didn't think so Mike, but I wasn't 100% sure.

Another question. What if the comps are: 2020 1,000,000 2019 100,000 2018 100,000 Is the average $400,000 and the test is capped at $285k? Or $161,667 b/c 2020 is capped at $285k first?

Or no deferral b/c of the negative numbers?