BG5150

Then answer as to what is better is up to the Trustee(s) as to what it sees as the more prudent investment. To me, it doesn't make much sense. You said they allow transfers from the SVF to the Target Date funds. Can the participants transfer to their own elections later? Or are the funds stuck in either the SVF or Target funds?

What does the plan say?

Company A wants to sponsor a plan in 2018. Owned 50-50 by brothers. Company was in existence since 2016, but only really started conducting business in October 2018. Brothers, their wives and a child are all getting paid for services. Company A adopts a 401(k) plan 10/1/18 effective 1/1/18. 21-1 YOS, semi-annual entry. EEs employed 10/1 have service waived and enter immediately. The brothers also owned another business, Company B, with 6 other (NHCE) employees. So, controlled group. Company B folded 9/30/18. Company B did not have a retirement plan Two employees from Company B started working for Co. A in November. I'm guessing I have to count their service with Co. B. When do they come into the plan? January 1? Do we have a coverage issue?

Coverage?

FWIW, Relius allows for TH to be allocated to: All Exclude current year Keys Exclude Keys a/o determination date

I have a plan that allocates a discretionary match on top of the SH match. Max up to 4% of pay. Last year, we had one owner deferring and no staff deferring. No problem. This year we have the owner and another HCE who is deferring. Can I structure my discretionary formula to be: Owner and staff 100% deferrals up to 4% of pay; non-owner HCEs 0%

Was thinking of trying something new. How can I change my avatar? I didn't see anything in the settings.

The 402g excess would be easier. Plus the r/k gets the distribution fee!

I would just do a 402(g) excess distribution from the account. Normal earnings calc would apply (sometimes the carrier will do it, sometimes the TPA calculates it). He gets all the money back (withholding is optional). It will generate a 2018 tax form, so he'll pay taxes on it. And you don't mess with payroll.

It cannot affect the Trustee's decision at all.

They are also annual additions for 415 purposes for 2018 as well, I think.

Hopefully, it's the owners AND some NHCE's who will make after-tax contributions...

Tell them you think its a bad idea b/c of some of the ideas above, and that they should consult an ERISA attorney for a final determination.

Maybe. But, again, I've yet to hear about an auditor question +1. Side question: what is the penalty for having loan rates too high or too low? Is it a prohibited transaction? Some sort of fiduciary breach? What would the remedy be?

The interest rate is supposed to be commensurate with a rate that would be charged by a local (regoinal?) bank for a similar loan. In some places of the country, the cost of borrowing may be higher or lower. But instead of calling around to banks in the area, ERs have been using the prime rate +1 or +2 as a shortcut. The IRS said in a phone forum a bunch or years back, that prime +1 may be too low and that +2 is better. Anecdotally, I have not heard of any auditor questioning +1, so many people go with that. We use prime +2.

Call it the Stable Value Fund Investment Account. Or the SVFIA.

These guys really love splitting hairs!

I would say reasonable classification applies to prevailing wage. It is clearly stated who gets it, it is a bona fide business reason and there is no employer discretion.

If "everyone" get a prevailing wage contribution, how could coverage fail?

I was asking more towards in any situation. Someone said once the IRS starts leveling penalties it's too late for DFVC. But is it too late to stop DoL sanctions?

Could you call it Stable Value Investment?

Something to keep in mind: SH can be allocated on comp while a participant, so first year entrants may only get 3% of partial year pay. If there is a TH minimum due, they must get 3% of full year pay. Another thing, it's not only PS that blows it up. Discretionary match that is not ACP SH complaint or even reallocation of forfeitures will drop the SH protection of TH.

Would it help remove any future DoL penalties?

Is this a Schedule H 5500? Or Schedule I? SF? In any case I would just put it on the 'Other Income' line. Who cares if it's a negative. It certainly is NOT a benefit payment. Was a 1099-R issued? (If so, I think it should not have been).

Tom, Can you resend the spreadsheet to me? I've changed jobs and the file stayed at my old job.