BG5150

He said the plan had no HCEs. And being a 2% doesn't necessarily mean making a ton of money (more than $150,000, anyway).

How much does the 1% owner make? In order for them to be a Key EE, they would have to make in excess of $150,000. That would make them an HCE, too.

Form EOB. It's the paying out of assets that triggers SPY for 5500 purposes.

I didn't think a plan term necessarily created a short plan year for 5500 purposes...

yes

If there are no HCE, how are there any key employees?

Did they run the average benefits test? Or, maybe the Safe Harbor-only people need to be brought up to the gateway, which the document should provide for explicitly. No need for an 11-g amendment there...

Did it used to? I'd contact Govn't Forms if it used to and not doing it now. TBH: It's been a while since I verified the numbers on an SAR. I jsut usually make sure the plan/employer's names and addresses are right...

Don't you have software that automatically generates one for you?

The regs say "plan provides for..." which means match is in effect even if the company does not make any match contributions.

You test the Sh contributions with the Safe Harbor. So, you should have 100% coverage unless you are excluding a group of employees from the plan. You may be failing 401(a)4 testing. That could be remedied with an 11-g amendment. I really don't think you are failing coverage, though...

How can he know the employees (or his) account balance? Has the property been appraised and the FMV reported every year? Side note: if the property can't be off-loaded at or near appraisal price, is there something wrong with the appraisal--obviously over-valued?

The only way you are going to fail 410b for SH is if you fail it for 401(k), too. Because anyone who is eligible to make a deferral gets the SH.

what's a federal qdro?

Only the client can tell you if it's W2. What entity type is the company? I would believe an owner would be performing some sort of services for the company. Unless it's a partnership and all he took was draws and only had an investment relationship.

You definitely could NOT pay fees with it. The "removed" match is not unvested, hence forfeited, funds. If anything, this could be considered an excess allocation and be treated according to the correction principals in EPCRS.

Yes. The generally have the same withdrawal restrictions as deferrals.

Thanks, RBG! Just what I was looking for.

I always thought that eligibility is not a protected benefit. For example, a plan has a 3-months of service requirement and month entry dates. Rhoda was hired on February 15 and would enter the plan on 6/1. However, in September that year, the ER amends the plan to require 1 YOS with semi-annual entry dates, and does not specifically exempt those already in the plan. So, to me, Rhoda is no longer an eligible and active participant in the plan until 7/1 the next year. Can someone point me to some guidance on why this is; ie, that eligibility is not a protected benefit... EOB or the code would be cool. I can't find it in Sal's book, but I'm sure it's in there somewhere...

If that is the ONLY Key EE deferring, you are correct. The rules are the lesser of 3% OR the highest Key allocation %.

You also have three more "zeroes" in your ADP & ACP testing...

What does the document say about what the remedy is? Is there a fail-safe provision in the plan?

Isn't there an 18-month transition period where you can test them separately?

415 comp, which includes most everything there is. The EOB has a great chart as to what's included and what's not.

Many times, TPAs give clients the #'s the TPA thinks the client will want. And the client thinks that the TPAs #'s are the ones that have to use. I always ask, especially new clients, what they want to do for the year. And I won't say, "do you want to do the same as last year." I will summarize last year's allocation: "Do you want to maximize the owners and only give a handful of staff a contribution, giving everyone else zero again this year?" (To use Tom's example). Some companies actually want to share (some of) the profits with all their employees....