BG5150

Hmm. Did you see Bri's note above mine? Is this ineligible match due to ADP failure, or the ACP refund itself? Side note: there would NOT be a rollover from the IRA back tot he plan. You/they would inform the IRA holder that $x was an inadmissible contribution to the IRA and it should be removed from the account and transferred back (with earnings) to the plan trust. A rollover would generate a 1099. There should NOT be a 1099 for this reversal. And this is why HCEs are last in having their accounts distributed in a plan term. Gotta wait for the testing to be done. Or risk having to go through these shenanigans...

How much is it? And how many people would it be reallocated to?

Nope

If the entry requirements are different you have to run an ADP/ACP test.

Side note: why even have a SHM?

Since 403(b) plan Employers generally don't file tax returns, is there a 404(a) limit to what the Employer can contribute? Is it the same a for-profit companies, 25% of pay? And when are the ER contributions due, since there is no tax form deadline? 12/31 the following year? (assuming calendar year) Is any of this discussed in the regs? Where?

Is there a way to code people in Relius who work less than 20 hours a week to NOT show up in the coverage teating? Other than an override?

What's wrong with refunds? To me, the only thing prior-year testing does is have some of the HCEs put in less than they could. It rarely works as intended, unless ALL the HCEs put in exactly the amount needed to pass the test. If one HCE goes below that, then the others can go just a little bit higher. But who keeps track of that? Say the max HCE average is 4% and I have 4 HCE. All HCE can put away exactly 4%. But what if one lady lowers hers to 2% midway through the year? Now, at teh end of the year, the HCE combined % is 3.75. Thus the other 3 could've gone a little higher. Do yu want to be the one explaining to the HCEs they did not get the maximum they could? I tell all my clients "refunds aren't bad." It's guaranteeing they get the most into the plan they are allowed. It's only delaying the taxation on the amounts by a year. As an HCE I'd much rather put in $8,500 and get a $300 refund that only put in $8,000 only to find out I could have done $8,200

Also check the document carefully. Even though the effective date of the plan may be 1/1, the effective date for the deferrals may be a different date. Sometimes it right up top, sometimes in the deferrals section of the document and sometimes in the Administrative Procedures section. If you are not sure where it might be, check with your document provider. They will tell you.

Just because the plan doesn't allow "Profit Sharing" contributions doesn't mean you can't make a TH contribution. The plan document says that if the plan is TH then the ER must make a TH contribution. it is a completely separate and distinct contribution from a PS. It's just that most companies declare a PS in an amount enough to satisfy the TH, but you don't have to. Plus, why go through all the expense of starting a new plan, funding it, filing a 5500, terminating it and transferring the small balances to the "main" plan?

In Relius, if someone is eligible (or at least the program determines them to be eligible), the show up the the ADP test with zero comp, zero deferrals and an ADP of 0.00%. One of the reasons I run my tests sorted in compensation order first. So I can see all the zero comps at the bottom.

What does Sal say? It's been a while since I read that part of the EOB. That said, I always thought that owners are not 'employees' and are not 'employed' by the company. (Can you employ yourself?) In this case are the spouses also owners? If not, did they perform services for the company during the year? If so, why no W2 or 1099? In absence of a W2 did they even technically work for the company? If not, then they weren't employees that year and the spouses wouldn't be in the test. I think most software treats zero comp and zero deferrals as a zero ADP. At least Relius does. And if your software doesn't and you want these people in, give the owners $1 comp.

I would think it was allowed, the Relius document would have a provision for it, and the Cycle 3 Non-standardized doc does not.

What if it's a partnership? Or sole proprietorship? If the company has a loss, so do the owners. Spouses on the other hand...

Do you guys just submit your refunds to the carrier (with or without earnings) and just have them withhold the 10%. Or do you get the participant elect withholding? Or, it is a timing issue, like with RMDs? later in the year, we just process the RMDs automatically with 10% withholding because the plan (and participant) gets in trouble if it's not done by 12/31 (in most cases). What if you complete the ADP test on March 10? Are you waiting on tax elections from the HCEs or are you just sending int he requests and have them w/h the 10% by default?

So a follow up question. What if the plan is adopted in 2021, but doesn't have a match provision. But it is them amended for 2023 to have the flex match. Do they have to provide the notice for 2023? Or 2024?

Never mind. The first sentence in the section that talks about the notice it says: "For Plan years beginning after the end of the Plan Year in which this document is first adopted..."

I read somewhere the flexible match notice is not need for the first year the plan adopts the cycle 3 doc with that language. Can someone point me to the cite for that? I don't see anything in my plan doc about it.

So, usually Morty electrically signs the 5500 and has EFAST credentials under his name. What happens if Lorena's name is on the 5500, but it's filed using Morty's credentials? The software let it go through.

A 403(b) plan’s definition of a Year of Service (YOS) is 1,000 hours in Eligibility Computation Period, and it switches to the Plan Year after that. The Plan Entry Date is “Immediate” So, if during an Employee’s initial year, they don’t get 1,000 hours, it shifts to the Plan Year. And, then, if they do get 1,000 hours in that next Plan Year, when is the entry date? They satisfy the YOS on 12/31 (it’s a calendar year plan). So, are they eligible on 12/31? The plan has participation comp. Do they have just one day of comp for the Employer contribution? Or do they get a contribution for the payroll that includes 12/31. That is the next year? Or do they simply enter on 1/1?

That's mostly right. Except as Lou said, the fixed match has no cap on the amount, but still cannot match on deferrals over 6% of pay. That piece is a cornerstone of the triple stacked match.

If you didn't tell anyone about the plan, then you have improperly excluded participants.

Did that NHCE have a year of service? And was over age 21?

2015 COULD have been it. It was one of the mid-year conferences, not the annual. I remember it was in Philly that year. (I barely remember it with all the drink tickets people gave me, lol.) But the question you cited was very similar to the one I posed. The panel pretty much said they believed if everyone who didn't get a contribution was because of that rule, then it was a valid business decision and you could use the ABT.

Yes.