Pixie

Is this possible? Another work around we thought of is to exclude HCE's from the safe harbor match and benefit them with a discretionary match. It seems like just limiting compensation would be easier.

I have a client that would like to offer individual brokerage accounts (as an alternative to investing in a platform) for accounts over a certain threshold of assets (let's say $50,000+). Is this discriminatory?

With the passing of these laws, clients have many new options to consider and implement. Does anyone know of the required employee communcations regarding these? For example if a client wanted to implement the domestic abuse distributions would this need to be communicated to all staff?

Client files 3/15 (3/17 this year). For the profit sharing to be deductible is it OK if I submit to the platform ON 3/17. The trade date will actually be the 18th. I remember way back in the old days, as long as the check was mailed on 3/15 that was fine.

Wife of owner has worked but has not been on payroll. The plan requires 1000+ hours age 21, one year of entry. Is she eligible due to being the wife of owner or must she have been on payroll with the required service to actually enter the plan.

There are no other retirement plans. Basically the business owner and his wife put in $73,500 each on the advice of their former CPA. This is not my client. Should I refer them to an ERISA atty? I am just trying to help out their current CPA who noticed the error. There were no deductions for these contributions made for them on the 2023 taxes/business returns.

Owner of 3 companies (only one with employees) starts up a solo 401k in 2023 and doesn't make any funding until 2024. the funding isn't permitted because the employer has 40 staff in another company he owns. What is the correction method for this? Can this be withdrawan as a mistake of face? This owner is not taking a deduction for the solo funding for his 2023 taxes.

Safe Harbor 3% plan for controlled group. We have a location that we have been excluding and now cannot pass coverage or average benefits (unless a significant profit sharing is made to the staff of the eligible location). My question is, can we bring in the staff needed to pass the 70% coverage test at the excluded location? Would we have to allow them to defer since they would now be considered a plan participant?

Hello. An employee turned in her paperwork and payroll missed setting her up. We are fixing with the 50% amount of missed deferral plus income. My question is does the plan safe harbor match apply?

Does anyone know if there is a time frame in which it needs to be signed? for example even though there is a one year waiting period can this form be provided when the person starts employment or does it need to be within 90 days of their enrollment.

Thank you for the input. My solution (since this is a small company) is to amend the plan to make all employees immediately eligible as of a certian date. This fits with the rules, I assume. Plus would add benefit to other new staff.

Safe Harbor 401k has the standard one year of service 1000 hours rule. The owner want's to bring their spouse into the plan. The spouse does work for the company but hasn't been on the payroll. Is this permitted? The onwer wants to start the spouse on the roster so that the spouse can max on the deferral side and recieve the SH match as well.

Thank you Paul for your detailed answer. I really appreciate it! I am skilled at testing and I just wanted to make SH rules are still valid when there is an excluded group in the other company.

In the case of a controlled group where one company is covered by the plan and the other is not. Is it the case that as long as we pass coverage, the 2nd company can be excluded?

the participant (who is also an owner) thought they could contribute Roth through payroll and Roth through their personal back account without asking me. I assume they were just going to report the person Roth contributions from their bank to their CPA. I am not sure how to go about correcting this. the plan is owned by an LLC that is taxed as an S Corp if that makes any difference. he is a 20% owner of this LLC.

what is the best method to correct this? I haven't seen this one before.

My client is a dentist and he wants to reduce vesting hours for a year of vesting credit retroactively to make a couple part time hygienists happier. He will be selling the practice soon and he wants to keep them around until then. Once he sells, he will then make everyone 100% (even terms). When I went to restate the plan to reduce vesting hours from 1000 to 500, I didn't have the option to put in a retroactive effective date. Do you think it is ok to drop hours for vesting and bump up the % for the part timers? This hasn't affected anyone who has been previously paid out in the last 6 years that I am aware of.

I administer a plan that provides employer contributions for employees working less than 1000 hours but more than 500. When do the vesting provisions of the Secure act take effect? I have two participants that would be 100% vested under the new law.

I have a client that wants to purchase land with his 401k assets and have a non-related party develop it. It is my understanding that real estate held by a 401k plan can only be a passive investment and that this deal would not meet the requirements. Do you agree?

I am running an ADP test for a short plan year 1/1 to 5/31. Can I use $6,000 for catch up to offset my ADP refunds?

Thank you Lou. Yes to all 3.

One of our clients had an accidental death. She has a husband but her business is real estate. He can receive her post death commissions for a time. Can a contribution be made for the 2018 plan year for her?

I have a $900,000 plan with 30 lives. One deceased participant has an account of $300,000 in this pooled account. We run quarterly valuations. The trust value has dropped 7% since the end of the last quarter. Are we permitted to run a special valuation to pay him and two others out? The other two distribution elections just happened to come in at the same time. I would hate for all of the other smaller accounts to absorb the loss. Regards, Pixie

I have a client that wants to excluded commission only sales people from benefiting. The plan passes coverage as some of these sales guys are HCE's. The plan also passes the average benefits tests and the rate group tests. The only test that is failing is the gateway test. My question is do we need to benefit the lower income sales people at 5% to meet our gateway requirements?

I have a safe harbor new comparability plan. They are unable to pass average benefits test due to one of the owner's 90% deferral rate. Therefore new comparability isn't working. Can we shift to an integrated format and bypass the average benefits test? We pass coverage, etc.