BG5150
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Everything posted by BG5150
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My only question is: does the 500 hour rule get prorated to 250? It's important in that we have someone who terminated with 450 hours. The ER has limited discretion in that she can do an 11-g amendment to add people if she wants. Other than that the contribution is defined by the plan doc.
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I would call the SSA and ask them how an alien can obtain a TIN for work purposes now that the offices are closed.
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So the kid isn't able to participate unless they hire someone else under age 21? I would think it would be discriminatory if the reduced the age for 2020 and reinstated age 21 next year.
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Short plan year 2020. Plan terminated 6/30/20. ER wants to do PS. Has last day/500 hr rule. Does that 500 hr threshold get prorated to 250?
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The EOB Compensation grid says NQ Plan Distributions are included in W2 and Withholding Wages, but NOT 415 (and simplified 415) comp, unless the plan says otherwise.
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In any case, I would get a written statement from an attorney that this isn't a prohibited transaction before you go ahead and do it.
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Plan doc excludes rollovers when determining the cashout balance. Participant has $550 PS (100% vested) and $45,000 Rollover. Because R/O is excluded, this participant is a candidate to be cashed out. Does the trustee just cash out the entire account and withhold $9,100? Or do they roll over the balance to an IRA? (The plan's threshold for IRA rollovers is $1,000)
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It would be a controlled group, so the 415 limit applies across both plans.
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If you have no HCE eligible for deferral but not for SH, then you pass the ADP test for that group automatically.
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I don't see how the ADP test is failing (so badly). You would run the ADP test for the people who are not fully covered by the SH, you don't have to run an ADP test for the whole plan. The people who defer and cannot get a SH will almost be eligible to be tested separately. And unless you have a bunch of newly-hired HCE owners or family, that otherwise excludable group will pass. If you have an owner HCE, then hopefully it won't fail that badly.
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I disagree, Bill. It says 1,000 hours in one Year Eligibility Service Period. That period likely ends on the 1 year anniversary (or really the day before) of employment. So, for both of the examples, the one Year period ends in 2020.
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I would contact the attorney who drafted the document.
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Overpayment in EPCRS, is there a typo?
BG5150 replied to BG5150's topic in Correction of Plan Defects
I'm good on the correction, I think. Just wanted to make sure I didn't miss anything with my meanderings through EPCRS, and if there was really anything in 6.06(3) that I needed instead of 6.06(4). -
He will know his 2021 RMD on January 1, 2021 because the RMD is based on the 12/31/2020 balance. He can ask T Rowe Price for an RMD in the amount of (2021 RMD - total amount monthly payments).
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DC plan paid someone out at 100% vested when they should have been only 20%. About an $8,000 difference. So start in EPCRS, Appendix B, Section 2, part .05 Correction of Other Overpayment Failures section 2.04(2)(a)(iii) But, 6.06(3) is Correction of Overpayment (defined benefit plans). Shouldn't I be using 6.06(4), Correction of Overpayment (defined contribution plans and 403(b) Plans.)?
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Late profit sharing contribution
BG5150 replied to Cynchbeast's topic in Retirement Plans in General
It might not be a 415 failure. Just annual additions for 2020. It may curtail the 2020 employer contribution if there are those at or near the 415 limit. -
Late profit sharing contribution
BG5150 replied to Cynchbeast's topic in Retirement Plans in General
If the contribution goes in now, it will be considered 415 annual additions for 2020. -
Is the auditor insisting the sponsor pay the excise taxes, too?
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I know I'm fighting a losing battle. I like these little mental exercises from time to time.
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Forgot about the tresury regs.
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Come to think of it, I just looked up 416. The minimum benefit section does not specifically mention employment on the last day of the year. Where does it allow for those not employed at EOY to be excluded from the TH minimum? The section further goes on to discuss when the TH minimum is less than 3% and aggregation groups and the like. I see nothing about employment requirements. Is it in another section of the code? Source: https://www.law.cornell.edu/uscode/text/26/416
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I think the 11-g in this case is silly. They are following the TH rules. They aren't making a discretionary contributions, nor did they choose to exclude the participants not employed at EOY. Unlike a last day and/or hour requirement, or excluding a class of employees for an employer contribution such as match or PS, the exclusions for TH are codified.
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Let's assume the terminated folks all worked 750 hours. Would I have to do an 11-g amendment to give 1 NHCE some sort of allocation? I forgot to put in my question, that there is no Profit Sharing declared for the year. It's just going to be the TH contribution this year. And say ABT fails, too. (Lawyer's office and all the attorneys are younger than the NHCE support staff.) BTW: This is an academic exercise, not a real-world situation at the moment.
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I have a question: Is the TH contribution subject to coverage testing? What happens in this situation: 10 HCE including 1 Key. All employed on last day of the year. 10 NHCE/non-Key, 6 employed at EOY. So, the TH will go to all the HCE except the lone Key and all the NHCE at EOY. So coverage is 67% [ (6/10) / (9/10) ] Note: there is no Profit Sharing declared for the year. It's just going to be the TH contribution this year.
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Did you mean KEYs? The language in the OP is what we use in all of our documents that we underwrite. Too, we add a PS component, usually a new comparability scheme. This way, the non-Keys get their piece and if the ER wants, they can get the Key EEs the same allocation via a PS. (We also exclude HCE from the 3% Safe Harbor to give the ER flexibility in spending.)
