BG5150

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?

Not sure what you mean there? Am I not allowed to use negative numbers in my question?

Doing a Profit Sharing. The only reasonable way the test is passing is using the accrued to date method. Contribution basis is obviously out, and the regular benefits basis is failing too. The accrued to date method is passing. But I want to make sure the compensation used is correct. Does negative income (a loss) get used as part of the average? Or do you use zero for those years? Example: Year 1: 100,000 Year 2: (50,000) Year 3: $100,000 Is my testing comp $50,000 or $66,667?

Woman owns half of an S-Corp with husband. Each takes $40,000 W2 income, defers $15,000. Also owns partnership w/ husband (50-50). Both have losses of ($150,000). Each. Because there is a controlled group, can they make the 401(k) deferral b/c it came from W2 wages? Or are they out of luck, because the combined income is negative?

Did the sponsor get an ACKID? If not, there might have been some sort of filing error. Was the 'Amended Return' box checked on the form? I find it odd that the original one went away. Did you try searching with the tax id or employer name instead of plan name? Did they get an ACKID the first time? Try searching with that. Have all this above info ready for when you call the DOL.

ADP/ACP tested plan. Plan allows for in-plan Roth rollovers. HCEt does the Rollover early January of entire account. In February, plan fails ADP & ACP tests. How does the refund get processed? How are earnings taxed? Are they? All the funds are now in the Roth Rollover account.

I agree. It's a valid SH Match under a QACA.

There are two HCE tests. Ownership. If you are in this group, you are an HCE. Compensation. If you are in this group, you are an HCE. You only need to be in one of the groups. You can be in both. And, indeed, many owners are, but not necessarily.