BG5150

^ Go the the mail fora screen and mark all of them "read" (just click on any dark blue circles to the left of the forum name. It'll clear everything out, but after that you should only see the new stuff with the current setting. Just a guess.

Do we add 2K as a plan characteristic code if a plan only has a Safe Harbor Match? Instructions say not to use it if the arrangement is solely 401(k) + QNEC or QMAC. Is a SHM considered a QMAC?

Plan's definition of comp is Simplified 415. No exclusions. Participant New York W2 report looks like this: Box 1 & 16: 48,500 = 50,000 gross (-) 500 sec. 125 (-) 1,000 401(k) Box 3 & 5: 49,500 = 50,000 gross (-) 500 sec. 125 (-) N/A 401(k) What is comp for plan purposes? I believe it should be 50,000, the gross. Admin here used the Box 3/5 result. Who's right? .

What about using the 5500s? Come up with some sort of rate of return using the financials of the 5500's. The 5500s should be readily available online.

Found it in the loan policy at least. All loans will be considered a general Trust investment. As such, all payments of principal and interest made by the Participant will be credited to all Participant accounts.

Where would it say if interest from a participant loan in a pooled trust goes to the participant's portion of the trust or allocated across the entire trust? Is the former possible in this situation? It's been a long time since I've had a pooled trust with loans. And I believe I would allocate interest to each participant who had a loan rather than the trust as a whole.

No you don't. You or your representatives can offer an alternative calculation.

Two guys walk into a bar. The third one ducks.

Side note: as someone mentioned before, you may want to think about changing your plan design. A Safe Harbor Match could be the way to go. The top match is 4% of pay, only for those deferring 5% or more of their own pay. This way, the partners can defer as much as they'd like without fear of refunds. Also, if the match is the only employer contribution, it will satisfy the TH minimum no matter how many people defer.

If the highest Key employee allocation, including deferrals, is only 1% of their pay, then all you owe is 1% TH. After the "your refund will help you not be top heavy" gaffe, I wouldn't trust your provider much, if at all. My suggestion is take your business to a reputable TPA in your area. The administration may cost a little extra, but I think it would be worth the piece of mind knowing things are running correctly. Another question to ask yourself: if they messed up the TH thing, what else have they missed or got wrong?

Ooops. Never mind. I was basing my answer on a 1-yr wait, not six months. I have since edited my post. Sorry for any confusion... :(

Not only bad, but totally wrong. Any in-service withdrawals will be added back into the plan assets for Top Heavy purposes for 5 years. (4 years after the year of distribution). So you are stuck with them for 5 years for each you you have an in-service withdrawal.

Those who probably will get the Top Heavy contribution: anyone hired on or before 1/1/2016. (Those hired on 1/1/2016 became participants on 7/1/2016). But anyone no longer with the company on the last day of the year can be excluded. Even if the plan says that you only take into consideration pay earned only while a participant for most things, anyone who entered the plan on 7/1/16 (and still there at the end of the year) will get 3% (or whatever TH % is required to be that year) of their full year's pay. I said "probably" because I haven't seen the document. But outfits like Paychex usually don't have clients with wacky provisions in the plan doc.

Remember, the earning don't have to be exact. Just reasonable.

Thanks. It's been a while since my office has prepared 1099's. Or at least a while since I had a part in it.

Is there a 1099-R code for an early withdrawal (under 59 1/2) of Roth Deferrals (assume 5-yr seasoning satisfied)? All I see in the instructions is early distrib from Roth IRA (code J).

This post is relevant to my interests...

In order to receive a PS contribution: An Employee must be employed with the Employer on the last day of the Plan Year. So, if someone has a term date of 12/31, do they get an allocation. I would say yes, because, generally, your term date is the last day you worked. Therefore, a DOT of 12/31 means you worked on that day and, thus, you were employed on that day. Your thoughts?

My post asked, "what were the PS allocation requirements"? Not the allocation method. You said the amendment was made mid-year. If one participant earned the right to a PS under the allocation requirements, you cannot change the method. So, scriveners error or not, if anyone satisfied the allocation requirements, the method for the year is locked in. At least for '15. (If there was an EOY condition, then you are out of luck)

We have, from time to time, done a "scrivener's error" amendment if it was something a simple as one of the plan terms recorded incorrectly from one plan version to another. For 2015 what were the PS allocation requirements before the amendment? Had anyone successfully satisfied those requirements? If so, I don't think you could've changed the allocation method, even by mistake.

Got it. Thanks. I did just that. (At first I was totally confused and the latest seemed to look nothing like the first one. But it was just the instructions page!)

I have two plans whose ERs are in a controlled group. Do the owners who are in both plans have 2 415 limits? Does it matter if they pass coverage on their own or if they must be combined for testing to satisfy coverage?

Tom, can you (or someone) update this for 2016? There's so much going on that I don't want to miss something. Thanks in advance.

...and then amend the plan to everyone in their own group?

I know that if a participant terms with less than 500 hours, I can exclude him from coverage testing. But can I exclude him from the general testing, too?