BG5150

If you are looking at EPCRS, where does it say you can do a retroactive amendment to do this?

If you are failing testing on a contributions basis, you will wither have to do an 11-g amendment to get the benefits where they need to be in order to pass testing. Remember, you cannot reduce an HCE benefit with this method. Or, you can give everyone the gateway and cross-test it. My calculation is the GW is 3.35%. ( (0.67 * 15) / 3)

Wouldn't the last day to make refunds also be the "determination" of taxes due? If the refunds are late, there is a penalty tax.

As long as you pass ACP at the end of the year, I think you are ok. Just beware the match calculation period in the doc. Just b/c an ER is putting match into the plan each payroll doesn't mean the match is calculated on a payroll basis...

I'm having a brain cramp Sole Prop. Over 50 Gross Sched C. : 19,114 Net after SECA, etc: 17,764 Deferrals: 17,764 415: 100% Can he put in another 6,000 as c/u? Could he put in PS and have some of the 17,764 classified as c/u? I know the PS will lower the plan comp. I'm having a hard time reconciling these numbers with 415 and the comp on Sched C

The first hurdle is to determine if the election to withhold 20% of pay was received in good order by the company/payroll company. If so, then the 50%/25% (plus full match) is an accepted correction. If not, then there may be no issue if the plan is not auto-enroll.

The correction principle is to put the plan in the same potion had the error not occurred. So if, say, when the $100,000 was liquidated, 25,000 shares were sold. If it only takes $95,000 to repurchase those shares, then so be it. Tougher to calculate though, are investments that pay dividends or capital gains directly to the plan. What happens if those 25,000 shares were sold in September and 250 more shares would have been added to the account as a capital gain on December 28? Should the particiapnt be required to re-purchase 25, 250 shares (regardless if the share value went up or down)? I guess that's why it's acceptable to use the plan's rate of return instead of the exact gain/loss...

Do you remove the 179 from 14A deduction though?

Still employed? Or still with an account?

For one year, I don't see a problem.

I can probably count on one hand the number of PYT plans that I've worked on that the company actually took heed of the PY numbers and adjusted the HCE deferrals accordingly. I think as TPAs we should condition the clients that failing ADP/ACT testing is not a bad thing, and that given what the staff is doing, the highly paid workers can put the exact most into the plan the law allows. Especially now that taxation of refunds come in the year of distribution.

Does EPCRS address late deferrals?

Say you had $100 of interest to spread out over like 250 people for a late deferral in 2017. Many of the allocations are under a buck, and in some cases like $0.07. What would you do for the people who terminated and took their money? There are quite a number of these folks. To me, it's pointless to allocate 50 cents (or even 3 bucks) to someone who left so long ago. The funds would probably just get liquidated as fees anyway.

You can wait until more than 12 months after the plan year end to correct with a QNEC. See EPCRS for when tests are not corrected w/in 12 months. One option is QNEC. It makes no mention whatsoever of prior/current year testing. (The other option is refunds and a 1-to-1 QNEC in the amount of the gross refund). Thing is, you don't want to do this more than once as it goes against self-correction principles (putting in practices to avoid the error going forward).

This is truly an awful month to start taking out funds that had gain on them last year...

These are questions better left to your financial adviser. Generally, we here are not investment professionals, we deal with the administration of plans.

There was no yes or no question. It was an either/or to some degree. To expand on my answer: I don't think that an greater compliance measures need to be taken just because this was an HCE. I would certainly take steps to enhance the procedures to make sure this doesn't happen again.

Then they MUST supply the SPD. Here's a quick write-up: https://erisapros.com/faqs/spd-delivery-requirements/

I would just correct it normally.

The payroll company did calculate the TH minimum and related that to the company via the annual report. (However, I'm not sure if the match was calculated correctly, so the TH numbers are suspect.)

The question is, I think, when is the IRS late fee due? How long do you have to pay after you file?

Side note: what happens if you give participants the SPD when they become eligible. They even sign a piece of paper saying they got it. Then they lose it. What accommodation does the Plan Administrator have to provide if the participant asks for a new one? Can the participant be charged for printing another copy?

I just wanted to see the text of AO 77-08.

Do you have a link to that?

What does the document say? Is it something like "as soon as administratively feasible after the request is made"? If so, I don't think it's "administratively feasible" to wait to see what the market does. If the paperwork is in good order, and the Plan Administrator is in the position to request the funds from the Trustee, and the Trustee is in the position to liquidate the appropriate investments and remit the funds per the participant's instructions, then I don't think they can wait at all.