BG5150

What happens if a plan has a termination date of 12/1/2018, but not all the assets have been distributed by 12/1/2019? It's a DC plan. 401(k).

Brand new plan. Can I still have it effective 1/1 given the fact they won't have a 30-day lead time?

I know of the 30-days rule for providing notices. But what if someone decides in December to start a SH 401(k) plan? Can they not do it? What if it's the first week or two of the month? Wouldn't that be like an "as soon as administratively feasible" situation?

I will make sure the plan is not drafted with ACP SH language.

Can someone check my math? 6/9 HCE get higher match (66.667%) 19/77 NHCE get higher match (24.675%) Coverage percent: 37.0130%. FAIL Ratio Test Concentration %. 77/86 = 28.25% PASSES Nondiscriminatory classification test (I believe it is a valid business reason)

Objective business criterion (I'm my opinion): Company A gets one match. Company B gets the other. Can't get more objective than that.

It's the 3% non-elective SH. My document provider says it's okay, but will probably be subject to the ACP test. The TPA tells me they will pass ACP as they plan on capping the match at like $1,800, so the HCE ACP will be low.

So, if ACP passes, I'll be okay?

Plan has 3% SH and a discretionary match. Can they exclude "junior executives" from the match? Most of these will probably be NHCE. Coverage is not an issue.

Hmmm. That's a thought!

New idea: Plan 1: 100% to 3% of pay Plan 2: 100% to 0.75% of pay Coverage passes. What about BRF? Can I use Nondiscriminatory classification test?

The original admin was a big payroll company. Though "incompetent" may be a rough word, sometimes it think it's accurate... To confirm: Plan was NOT set up as SH. No other plans. No match. I forgot about the 3% first year thing, but it still doesn't change the TH bugaboo.

If a plan refuses to pay the TH, isn't that a DQ event?

Controlled group. Two different plans. Must be tested together due to coverage. Plan 1: Discretionary match: 100% up to 4% Plan 2: Discretionary match: 0.00% Do I have to test this for coverage? BRF? will zero discretionary match fail one or both current/effective availability?

I believe the plan was communicated to the plan. I also had the disqualification idea. So if the plan is disqualified it's as if it never existed and they can start a new one right away?

Plan started in 2018. Only the owners deferred. Obviously: ADP failed. Refunds done. Obviously: Plan is TH for '18 & '19. Owners stopped deferring for 2019. Not sure if any were made, but let's call it zero. Question: Is there any way around the $40,000 Top Heavy contribution that is due for 2018 given this fact pattern? (No TH for 2019, as no deferrals for keys) [I thought, aggressively, we could have had the refunds as 12/31/18 liabilities and accrued it back and thus have EOY '18 palace of zero. But one key was over 50, and some of his deferrals were considered catch-up and stayed in the plan....) ]

nope

My record keeps is telling me Relius doesn't do coupon loans. Does the program have the ability to generate a book?

I'm trying to talk a client (a big client) out of having coupon loans. They don't want to take on the responsibility of taking money out of people's paychecks. I'm trying to go the "you need to be reasonably sure these loans will actually get paid off, and coupon loans makes this job very difficult" route. Any other thoughts?

That's not the answer I was looking for...

Controlled group. 3 companies A B & C. A does not pass coverage on its own, B & C do. I can test A & B together, b/c together they pass coverage excluding C. C passes excluding A & B. Can A & B have different SH formulas? Ie, one a 3% and the other SH Match? If not, could I have A with SHM plus a discretionary match (that satisfies ACP SH) and B with just the SHM?

I think they structure those questions these days only with "All of these are True except..."

We have a bunch of plans that allow in-service and/or partial withdrawals fall all accounts, whether or not they are fully vested. Can we amend those plans to allow inservice or partial withdrawals only for fully vested accounts? Would that be a cut back?

Are you doing a valuation of the trust every time someone wants to take a distribution? Pooled accounts aren't subject to short-term fluctuations unless frequent valuations are done.

I would reword the tiers. For the first 3, I would add "if you are an NHCE..." For tier 4, I would change it to "if you are an HCE OR you make more than $125,000..." Because why you have there, an NHCE who makes more than $125,000 would get no match at all! Also, I would put some >= or <= rather than all >'s and <'s, because if anyone has income on the button, they get no match. For example, if someone makes exactly $45,000, then they don't fit into either 1 or 2.