BG5150

Is that true in all cases? I have a adoption that has a separate place that indicates what comp is included/excluded for ADP/ACP tests. If it says nothing is excluded, would that mean I would HAVE to test with them included, even though the rules say I don't?

Kevin, using that logic, Rollover contributions are not part of a CODA, nor are they safe harbor contributions. So, plans that have a rollover contribution during the year lose the TH exemption?

Test it both ways. Do any of the tests fail? If not, no big deal.

If NHCE, it comes out. if HCE, it stays in.

It is an excess match, and can be corrected under EPCRS. Basically, you remove the excess (plus earnings) and put it in a suspense account and use it to cover the next match deposit. You would not be able to amend 2018 to accommodate a discretionary match.

??

What was with the pink uniforms?

My next question: I know the excess deferrals are included for HCEs but not NHCEs in the ADP test. But what about the Average Benefits Test?

Next question: I know excess deferrals are included in the ADP testing for HCEs but not NHCEs. What about the Average Benefits test?

As long as the funds were not rolled over, I think you are okay.

We have someone who deferred 26,000 in 2018. Obvious 402(g) excess. But do I include the $1500 excess amount in 415? In other words, what is the maximum PS: $35,000 (incl excess in 415) or $36,500 (do not include it if it is distributed)? I believe it is counted, but I cannot look it up in the EOB at the moment.

Tom, what I think everyone meant by that is if you are imputing disparity, you have to consider 100% to the TWB, even if your PS allocation is using less than that amount.

We believe there will be sufficient contributions by the staff to pass ACP. I was thinking that maybe because the VAT is an EMPLOYEE contribution it MIGHT be ok.

We have a client that wants to add a Voluntary After Tax component to a Safe Harbor Match plan (not Roth). The SHM will be the only employer contribution. The top heavy regs say if a plan consists SOLELY of a CODA and the SH, then the plan won't be top heavy. Does the addition of the VAT mean top heavy is back in play?

Is this a client that really needs to be YOUR client? Sounds like more trouble than they are worth.

How can you provide a summary of changes to a plan if you do not indicate what plan it pertains to?

Go into their census screen on the Service tab. In the Years box, check the Service entry. Be sure it says zero.

Here is an example I used when I taught a "lunch and learn" to new hires on Loans many years ago. You have a balance of $20,000 in your 401(k) plan, all deferrals. No taxes yet. You take a loan of $10,000 from your deferral account that you did not pay taxes on yet. You get a check for $10,000 and you take it to the bank and cash it. You get all $1 bills because you always wanted to see what 10,000 bills look like. Then you bring it all home, spread it on the bed, get naked and roll around in it. (My supervisor asked me to take out the 'naked' part for subsequent discussions). So far, no taxes. You do this every day for a month. Then you scoop up all that cash, pile it up nicely and return it to the bank. (STILL no taxes). The next day, you write a check to the custodian for $10,100 for principal and interest. Now, so far, only $100 of that money has been taxed. A week later, you quit and decide you need the money for a "personal growth" trip through Europe. You weren't the best investor, nor the worst, and your account had zero dollars in gains or losses. You get a distribution of $20,100. You are taxed on the totality of that amount. And only $100 of it was taxed before.

Next step, amend the plan to make TH to only non-keys.

I wasn't sure if I had to run the ABT on both plans together first. I just did, and it passes. Both mid-point and ABPT. (So, why am I doing component plans?)

When I run the testing in Relius for the component plan only, these are the results for the 3 HCE: Ratio test: Pass, Pass, Fail Nondiscriminatory Classification test: Pass, Pass, Pass ABPT: Pass, Pass, Pass ABT: Pass, Pass, Pass 410(b): Pass, Pass, Pass (I know this one is irrelevant) Again, 410(b) passes ont he ratio test. My population is: Total HCE: 4, NHCE 17 Plan 1: 1 HCE, 3 NHCE, 70.59% Plan 2: HCE 3 NHCE 14, 109.80%

410(b) is NOT an issue with my component plans. Plan 1 is at 70.59% and Plan 2 is at 109.8% It's 401(a)4, I'm concerned about. EVERYONE in both component plans are getting the 5% GW. Component plan # 1 passes on a contributions basis. The 1 HCE is getting 5% of pay, too. The other plan has 3 HCE. I am maximizing the owner, and truing to figure out how much the wife can get. At, say, $40,000 rate group passes the ratio test. Above that to about $45,000, it fails the ratio test,, but the ABT test, for the component plan passes. Is this ok, or not?

That leads me to the next question. What if I am breaking my plan into component plans (restructuring). Do I have to pass non-discrim testing using ratio test and not ABT? Coverage passes ratio test. I've asked this before. And I was told there is only one ABT for a plan, and therefore, if I'm arbitrarily creating two plans, with no business reason, I cannot use the ABT to pass non-discrim. Again, coverage passes the 70% test.

Do I have to pass my cross-testing with the ratio test? Or can I use the ABT?

So, nonexcludables, 3% SH + 2% GW, cross tested. Otherwise excludables, 3% SH, contribution tested. OK?