Chippy

Since he was paid for 881 hours and salaried, I wasn't sure. What if he was salaried and they didn't track the hours he actually worked? But since they did, I would think they count towards vesting.

A year of service for vesting is 1,000 hours in a plan year. A SALARIED employee worked 5 months and was salaried for 881 hours during that time, but he worked overtime and had actual hours worked of 1,055. Would he get a year of vesting since he actually worked over 1,000 hours? My first thought is yes.

Thanks guys. They can pass separately but I didn't recommend it in case there is a year where they do not.

A law firm sponsors two plans, one if for the Associate attorneys, deferral only, and the other is for the Partners and Staff, deferrals and a new comp profit sharing. The plans have always passed coverage testing. Can the Partners and Staff plan add a non-elective safe harbor?

I have a controlled group, 2 companies. They have passed coverage separately in prior years with sometimes combining for a better result in the ADP test/ACP test. Company B wants to increase their match but also exclude bonuses from compensation. Will this effect Company A for any reason?

yes, the beneficiary designation listed the charities. Is this a valid bene designation? This is a profit sharing plan and the participant was the owner of the company.

I have a participant that passed away last year. His spouse passed away a few years earlier. His wishes are for his full account balance to be divided up between charities. What is the best way to fulfill his last wishes? Can this be paid to the estate and then paid to the charities through the estate?

Tom, will this song be performed live anytime soon? thanks for your help!

I have a controlled group of two plans. Plan A has deferral and profit sharing and plan B is deferral and match. They have always passed combined 410b testing including the participants from the other plan. They use top paid group so HCE's vary from year to year. Some years there are none in Plan B and some years there are two or three. Some years the ADP test fails separately, but combined with the two plans, it will pass. If Plan B would go to a safe harbor match, how does that affect Plan A and the ADP testing. Is it even allowed?

If I filed for an extension but now am filing the 5500 on time, do I leave the 5500 form marked as filing under 5558 or do I remove that check box and file as if an extension was never filed?

The company puts 50% of the profit sharing contribution into the plan. The other 50% the participant may take in cash or defer into the profit sharing plan. Is the 50% that is deposited into the plan tested as a regular profit sharing contribution and would the additional amount that the participant elects puts into the plan treated as a pre-tax deferral? If it is a pre-tax deferral, what year would it be applied to the limits? The year it is for (2016) or the year it is deposited (2017)?

thank you all, It's a very large recordkeeper too and I do have concerns that they would credit a participants with 2 years of vesting in one plan year. I advised the client not to amend the plan, but they want to work with the recordkeeper.

I work at a TPA firm and one of the recordkeepers that we use is having their clients amend their plans to use elasped time vesting, employment anniversary to anniversary. . Current adoption agreement says vesting is based on 1,000 hours in a plan year. The problem with the 1,000 hours in a plan year they say, is that if a participant works 2,080 hours in a plan year, they will receive 2 years of vesting for that plan year, so this plan has a 3 year cliff schedule, the recordkeeper is saying a participant will 100% vest in 1 1/2 years. Is this something new that I missed?

I have a small balance forward profit sharing plan. 195,000 in total assets. Owner holds 165,000 of those assets, 2 other employees. One of their assets was a piece of land/building valued at 120,000 and it is now worthless so the plan is taking a hugh loss. I want to have the owner take the hit for the loss of the asset, and he is ok with that, are there any issues with doing that? I know this asset was a bad choice from the beginning...............

This confuses me about the combined 410b and it probably shouldn't. If I run combined testing in the system, it says 8/8 hce and 81/81 NHCE. ( The plans are almost identical. no service required and quarterly entry dates ) plan A - 5 HCE and 2 NHCE, Plan B - 3 HCE and 79 NHCE. These are the non-excludable employees. Is the coverage test 100% or is it 2/8 HCE and 79/81 NHCE for one plan and 5/8 and 2/81 nhce for the other? thanks in advance..........

I have two plans that are a controlled group. Both plans have deferral and match. If they pass 410b testing, can I test the two plans separately for ADP/ACP testing? Thank you, panic mode time here........

Everyone gets the contribution and they fund it each payroll. So, yes, it would be too difficult to take it back out at this point. It's not a lot of money, just a pain, especially if the participant already took his money out of Plan.

Thanks Guys. I didn't know a way to exclude this participant, was hoping upon hope that there was some way to exclude him. Document isn't checked to include post year compensation. So, guess this terminated participant will have to receive an additional contribution to pass gateway.

Thank you. That's the answer I wanted, but I thought that if the participant met eligibility to receive a contribution, they were included in testing...... coverage and cross testing.

A participant terminates on 12/31/2015. His receives pay in 2016, and also match and a profit sharing contribution on that pay. He is failing gateway as he only received a 1.07% employer profit sharing contribution. and 1/3 of the HCE is 1.93%. Is there anyway to exclude that participant from the gateway test? I don't think there is, but thought I'd check. The client allocates the profit sharing contribution based on years of service. thank you

When a plans eligibility is Completion of 3 consecutive months of continuous service. What does continuous service mean? owner's two kids work at the company on school breaks and in the summer, work less than 500 hours a year. Would they have met the 3 consecutive months of continuous service?

A participant wants their employer to terminate them, so they can take a distribution from the plan, and then have the employer rehire them. They could take a loan, but the participant doesn't want to have a loan payment. They do not meet hardship needs either. So, is this legal? It sure doesn't seem right. Any thoughts? thanks

Maybe combine for coverage isn't the correct term. By combining , I mean there are 22 comibined HCEs and 70 combined NHCE. In Plan B 7 out of 22 hce receive the match, and 25 out of 70 NHCE receive the match. to pass at 112.23%.

I have two companies that are a controlled group. Plan A has deferrals and profit sharing, Plan B has deferrals and match. The combined plans pass coverage testing using the ratio percentage test. They also pass the Average Benefit Test. Is there another test I should be doing? When doing the ADP Test separately, Plan A fails and Plan B passes. IF I combine them, Plan A fails less, but a participant of B will now receive a refund. Is this acceptable to combine for adp testing even if they are not required to be tested together? I think it is, but is it fair to the employee of Plan B that will now receive a refund?