BG5150

Test 2016 Partic Count.xlsx

But I know I saw it somewhere.

I am writing a plan with effective date 1/1/2017, but a deferral effective date of 4/1/17 so I can implement an EACA. Eligibility is currently 21/1 with plan entry dates of 1/1 and 7/1. Do I have to do anything to make those who would have entered on 1/1 actually active on 4/1? (Because 1/1/17 there were no deferrals allowed. Absent any specific language, would those eligible on 1/1 be able to make deferrals on 4/1, or would they have to wait until 7/1?)

I seem to remember reading that the earnings need to be deposited within 5 business days after the calculation date, but I cannot find that in EPCRS.

Can it pass BRF?

This is only going to be relevant for a small population of plans. Think about who would take advantage of this, especially now that there are Roth 401(k) contributions: pretty much only those participants who are already maxing out. And usually who is that? The HCEs. Granted, there are some NHCEs who max out. But, for most plans, it will only be a very small portion of the staff (unless you have a professional group with a top paid group...but, again, that will be a small portion of plans). Then what happens when the NCHE(s) leave the company? Are you going to tell teh HCEs they can't make voluntary after tax contributions any more? Passing the ACP test would probably be a difficult endeavor. Does this mean you shouldn't do it? Nope. But just be aware of the demographics of the employer and see if it could fit. It seems like a great idea until you run the numbers through that ACP test...

Not for nuthin', but you HAVE to 'advertise' the feature to ALL participants.

Well, that's just plain wrong, I think. Is your employer planning on terminating the existing plan? If so, you won't be able to make 401(k) contribution for a year after the current one completely closes down and has all its assets paid out. If not, then there is no way for you to "save" your money and then deposit it at a later date. Plus, they can't make you stop your 401(k) deferrals outside of amending the plan to just not allow them any more. If they did, you should get a Summary of Material Modification detailing the amendment to the plan. Again, if the deferrals are suspended in the plan, you won't be able to just write a check from your bank account for the deferrals you saved on your own. The match is a different animal. The company can amend the plan to stop the match any time they want. (pretty much) You are not in an enviable situation here, that's for sure.

Can the QACA escalation go beyond 5 years as long as it's capped at 10%? Or is that 5th year the high as it goes and stays there?

Oops. 3.5%! Investment house is giving them a breakpoint if they have auto-enroll and a "4%" match. Not sure what that means. For some reason I was thinking QACA and 4%. But I knew there's a .5% at the ens of the QACA match so I added up. It's Friday after a snow day. I'm not firing on all cylinders.

Basic SHM caps at 4%. QACA match caps at 4.5% My thoughts are: EACA/SHM because they can have flexibility with initial rates and escalations --OR-- QACA because they can have 2-yr vesting and the match is only an add'l 0.5%, I think the client wants to start at 6% rate with 1% escalation, so under EACA it could be: 1: 6%, 2: 7%, 3: 8%, 4: 9%, 5: 10%, 6: 11%, etc QACA: 1: 6%, 2: 6%, 3: 7%, 4: 8%, 5: 9%. 6: 10%, 7: 10%, etc.

Plan wants to offer auto-enrollment. Can I have a basic SH match with it, or does it have to satisfy the QACA match?

I think they are, after speaking with the client. I am suggesting using an auto-rollover company. Maybe Penchecks. Any other good ones out there?

I'm with RBG on this one.

Thanks. I just wanted to make sure I wasn't missing anything big. We are just going to have the ER pay the participants out (its a pooled plan) and we will get them the 1099-r's

But you can't pick & choose, right? I can't have two people in the same situation and only have one be treated as excludable.

Plan requires cashouts of vested balances under $1,000. PA has been negligent is this regard. Is there any sort of penalty that could arise from not doing this? (It has been universal, no one has been cashed out involuntarily) What if it's cought in audit. Is it one of those, just cash 'em out now and be more diligent in the future, type of thing?

Thing is, the late deposit makes it a 415 annual addition for the year it is depsoited, even though it was based on 2015 allocation overall.

The odd thing is, if the participant kept the money in the plan, the entire amount would be in the denominator. But since she took a distribution, only 60% of it is now being considered.

Sounds like severance

I know that if a PS for a year is deposited more than 30 days after the ER's tax return is due, then those amounts are annual additions for the year in which the deposit is made. (Let's assume a calendar year plan and tax year) However, what if it's a pooled plan, and some of it was already deposited timely? Do I prorate the late amount across the participants? For example, there are $25,000 (out of $60,000) from the 2015 PS allocation that hasn't been deposited yet. For 2016, the owner is due $40,000 between deferral, SH and PS (under 50, no catch-up). Is the owner's portion of the $25,000 prorated over the 2015 allocation? (If he was going to get 40% of the 2015 contribution, then $6,250 of the $25k is slated as an annual addition in '16?)

I thought so, but I wanted to make sure. In this case, it's cheaper to keep him out. He's not benefitting, so my rate group coverage is (1/1) / (1/1)

So, the forfeiture account gets added to the denominator? I always excluded it from my calculations.

I would think all of them. Neither the plan nor the regs say only some fringe benefits.

Does this help? Publication 15-B (2017), Employer's Tax Guide to Fringe Benefits