BG5150

My problem is that the ER doesn't have the SSNs.

That's at lease what I recall. I could be wrong. I'll let someone else chime in on that. PS: If I'm right, the the match can be even higher to get them to the 415 limit. Again, watch the deductibility limit. And watch out the staff doesn't wise up and reap a huge match.

Why would interest rates play into anything? It seems as though the participant has allocations to the match, so it's very simple to determine a close approximation of how much the earnings would have been. If it's only a few missed matches, once the reports are run, It'll take just a few minutes to put the numbers into the formula in a spreadsheet.

If you want to get the match even higher, I think the third tier could be, say, 300% up to 6%. Tier 1: 6% of $125,000 = $7,500 Tier 2: 4% of $125,000 = $5,000 Tier 3: 300% of 6% = $22,500 Total Match: $35,000 You would have to watch out for deducibility, but the match is only 28% of pay.

Church, the assets of the plan are in an employer-directed pooled account. Not individual accounts. Certainly not a MEP. Employer says they do not have the records. Also says these employees may have had fake SSNs. Small employer, I doubt they vigorously examined the employment status of their hires.

No records left for these people. Company closed up in 2011. Nothing in the r/k system here. Been here since mid-2000's. I think sending them to an ERISA Atty may be a good idea. As to the plan doc:

My client only has names like L Ramirez born in the 1970's sometime, or S Kelly born in 1981 as records. No SSNs. What happens then? Can't even escheat to the state w/out an SSN.

I would feel confident in correcting the match as described in the OP via SCP. I would add earnings from the time each of the original matches for the other EEs were processed.

Where does it say insignificant failures are in the 2-year window. I see where that is the case for significant failures under SCP, but not insignificant.

Plan terminated a bunch of years ago, and accounts were paid out in drips and drabs. The only accounts left are for the owners and several people who left the company long ago (like 2010, 2011-ish). The employer doesn't have SSN for these people, so rollover places wont take the accounts. Pooled PSP, not at a nat'l provider or anything like that. What becomes of those accounts?

Bill, do you send them to everyone who had a balance on 12/31 or currently? For example, Kim is termed and had a balance on 12/31/20. She took a full distribution on 1/31/21. Do you instruct the plan administrator to send her an SAR?

And don't forget ownership attribution. Side note: when did they get rid of HCE attribution due to compensation? Like when the wife was an HCE due to comp only and the husband wasn't. He'd be considered and HCE by attribution. I seem to remember it in the mid-90's

But then why is she in the Rate Group testing? I guess rate groups don't get separated into excludable/non-excludable?

Never mind. Asked and answered:

I have a participant who was eligible for the 401(k) piece of the 401(k) plan in 2020. She had deferrals, got a match and a Top Heavy contribution equal to 3% of comp minus the match. Comes out to about 2% of TH. She is not eligible for the Profit Sharing component until 2021. It's a cross-tested plan. Gateway is 5% as an owner is getting a 22% contribution. My software is saying the plan passes gateway even though the participant above is at 2% ER contribution. Brain cramp right now. Is that right? TH only doesn't need a gateway? She shows up on the rate group test.

404(c) is investment related. I don't see where vesting comes into play. And, I don't think daily valuation is a requirement either, just that the participant must have control over the investments. Nothing in there says that an investment be immediately under the control of the participant. The plan can impose restrictions on the frequency of changes. I believe the participants must be able to give instructions at least once every quarter. I think is was the "final" 401(k) regs that added the vesting requirements to the statements? Or, at least, something after EGTRRA. Here's the 404(c) reg: https://www.law.cornell.edu/cfr/text/29/2550.404c-1

For some reason, payroll company stopped the matching contribution for everyone mid-2019. We only do the PS and just enter the match for (a)4 testing. Owner HCE was maxed out to $62,000. They are going to make up the match for everyone else. Should they bother with the owner? Otherwise, he will have a 415 excess and get some of his deferrals refunded. (He's the only one with a 415 issue in either 2019 or '20)

Then he should have plenty of time to help us out here!

I have someone who terminated in 2020 and took a distribution. I need to add her distribution amount back to the plan balance for Top Heavy. Do I have to also add back any of her in-service withdraws the previous 4 years?

Hypothetical situation: 2019 plan fails the ADP test, and they correct it with refunds August 2020. The 5330 tax is $1,050 and was paid. Then this January, they realize that some HCE comp was lower than in reality. With the new numbers, the plan passes. What happens to that $1,050 excise tax? The plan didn't really need to be corrected, so it couldn'tve been late. Can you ask for a refund of your tax?

Sorry, the question was meant for Becky...

Catty, is the plan set up as everyone in their own group or design based safe harbor via pro rata allocation?

Anyone try to file a 5500-SF with 2 participants? Mine keeps getting rejected. I get a warning in Relius saying that if I qualify to use the EZ I now have to use that form. But this is plan is not a 'one participant plan.' It's an owner and an employee. Relius says it's probably a DOL problem, but they didn't seem to know anything about it. A co-worker saw a posting on Datair's forums about a similar issue.

But shouldn't the trust accounts be set up under the Plan's EIN and not the sponsor's?

We have some plans done by a former administrator that have individual brokerage type accounts. I believe these accounts were set up using the ER's EIN instead of a Trust EIN. What are the ramifications of this, if any? I always get a separate TIN when the accounts are either in a pooled account or individual brokerage accounts. The former admin ceased doing that because he got tired of the pushback when the TIN was retired due to inactivity. I was setting up a new plan, and was told it was OK to just have the sponsor's EIN as the Trust EIN in the doc.