justatester

So what is the correction if it fails? One HCE received a 24% contribution...never going to pass.

Employer make prevailing wage profit sharing contribution. That is the only profit sharing contribution. Is it subject to General Testing? If yes, Gateway if using accrual basis? In this plan's case, there is an HCE who receive the PW contribution. Also, how do you determine who is "eligible" for the prevailing wage?

Plan is a Safe Harbor Non-Elective plan. Plan has compensation exclusions (ie non safe harbor exclusions-OT, commissions, bonus etc). The plan does not pass 414s. Can the plan satisfy the 414s requirement by using General testing? Or must the amend their definition of compensation to satisfy 414s?

Safe harbor for ADP/ACP via SH match. Oh, and the plans ARE aggregated for coverage purposes; that's why we can, theoretically, have every participant in their own plan (just salivating over the fees) and still be ok with coverage. When aggregated for coverage, are you saying treated as one plan? Or treating each plan separately, but taking the entire group in the denominator? BTW...the only HCES are the Pharmacists and the mangers. No other ee, meets the HCE definition. Does this make a difference?

This one goes into the category....just doesn't seem correct. 2 plans: Plan A: Age 21, no service requirement: Excludes all EEs except Pharmacists and Managers Plan B: Age 21, 1 YOS no exclusions Both plans are safe harbor. After 1 YOS, the pharmacist/managers move over to plan B (at least in payrolls eyes). I am not sure of several things. 1) what provisions makes the Pharmacists and manager "no longer" eligible for Plan A. I believe there are still eligible 2) What about coverage? Can the plans be aggregated for coverage purposes? If so, are they still safe harbor since less than 1 YOS ee except Pharmacists and mangers are not eligible. How do I count those non manager/pharmacist ees in combined coverage? I think that the manager/pharmacists are still eligible for Plan A and therefore they will not pass coverage.. It just seems a bit fishy to me.

I have 2 plans that are part of the same controlled group. Plan A: No age/service, daily entry Plan B: 21/1 YOS/Semi Entry When determining the groups for coverage, when doing plan A ratio, we count everyone since there is no age/service. When doing Plan B, do we only count those that have 1 YOS/21/semi for determining the benefiting group? I am trying to figure out who is excludable (for age/service) to those that are non-excludable not benefiting.

I have a plan that needs 414s testing. For coverage purposes the plan is run disaggregated (applying the under 21/1 yos tested separately), for 414s, do I need to run the test disaggregated?

S Sorry for the long post.. our client A acquired Client B in 2013 and applied the transition rule through 2014 · The transition period expired at the end of 2015 · Client A sponsors a 401(k) plan which funds a match and service-based profit sharing contribution · Client A's 410b ratio and General ratios are below 70% and require ABPT · Client B sponsors a 403(b) and MPP · At the time of the acquisition, Client A informed us that the acquired group “lost its church status” and subsequently became subject to ERISA. Here are some of the questions that I have: · What contribution sources from the 403b/formerly-church-MPP would be included in the ABPT? They have 3 sources labeled “mandatory”, “matched”, and “voluntary”. Below are the source descriptions that have been provided. · Mandatory – 4% Employee contribution required to receive the 6% Match · Matched – 6% Employer Match · Voluntary – Employee contribution above 4% for eligible employees. Also includes voluntary EE contributions for those ineligible for match. All contributions are pretax. · Several employees have contributions over $18,000 – does this sound reasonable? · If the acquired company has lost its “church status”, does this have any other implications on the Client A plan beyond combined 402g and 415 limits? What exactly does it mean to have lost “church status”? Would both the 403(b) and the MPP be subject to 410(b) testing?

well, in the plan document it is written as 100% to 3, 50% up to 6% as the QACA. Additional "non-safe" harbor match is 0% up to 6%, 50% on deferral that exceed 6% but not 9%. The previous plan document was 100% up to 3%, 50% up to 9%, but as mention, the current document does not permitted that so the wrote it as mentioned above. As currently written, I think it might be a problem.

My mistake I should have included that this was QACA Safe harbor. Does that change you opinion?

We have a plan that has a "safe harbor" formula of 100% of first 3%, then 50% of next 6%. I believe this formula satisfies the ADP safe harbor, but not ACP. Unfortunately, that formula does fit on to the volume submitter document that we use. The document was drafted for the "qaca" contribution of 100% of 3% 50% of next 3%. Then a "supplemental" match of 0% up to 6% and 50% on 7-9%. Does this make sense? Is there any other discrimination testing that is needed? BRF? If this is permitted would it be ok to recordkeep the "2" matches in same source? Any thoughts would be appreciated...

I would agree for Coverage....but does the transition rule apply to HCE determination?

Company A acquired a company B in 2016. They are now part of a controlled group. Plans will not merge in 2016 or 2017. Company/Plan A uses top paid to determine HCEs and it applies. Company/Plan B does not. I believe all members of the "controlled group" must have the same election. So, what do you do if they do not? If possible, should Plan B be amended by 12/31/16 to "elect" top paid? If both plans elected top paid, for 2016 a "reasonable approach" would be to calculated the top 20% separately. For 2017, they should be done in aggregate. For 2016, how should HCEs be determined (if plan b is not amended)? Can Company/Plan A still continue to use top paid for 2016? Thanks!

12/31/15 PYE: Test was run and corrected by 3/15 We discovered an error which resulted in rerunning the test. Unfortunately, the test failed an additional $462 in ROEs is necessary. It is approximately, $51 per HCE. Is there a de minimis amount that would permit the plan not to make an additional correction?

Ok added twist... If you take an in-service withdrawal from your matching account, you are no longer eligible to receive the employer match even though you can continue to defer. How would this be handled for BRF? Example: Def from Jan-March-receive 50% to 6%. Take an in-service withdrawal on 4/1. Continue to defer. October 1-now eligible for the match again... My deferrals from April-September were not match therefore my overall match rate does not equal the 50% to 6%/

Hi, I have a 12/31 plan that has 2 match formulas. 50% to 6% and 100% to 6%. The 100% to 6% is failing BRF. This match was "grandfathered" to a group of 4 participants (1 HCE, 3 NHCEs) back in 2004. They were part of a larger group and the formula worked for a bit. The plan spun out in 2013 and is now a much smaller plan. It is failed BRF that year (never corrected). For 2014, the usual HCE fell below threshold therefore was considered NHCE. Now 2015, they are failing again. By the way the plan was restated in 2013 and again in 2016. Is there any way this would be permissible since it was a "grandfather" closed group? Or do they need to expand the group receiving the match? Thanks for any help...We are up against the 9 1/2 month deadline which is Saturday/Monday.

Happy Friday Afternoon, I have a US and PR plan. The US plan is not passing "ratio" coverage testing. I have included the PR employees as non-excludable not benefiting. I would like to run the ABT test. My question...do I include the PR plan in the counts, but not include their contributions? If it was two US plans, I would include all comp/contributions. I am just not sure how it works when one member of the controlled group is a PR plan. Any thoughts would be greatly appreciated!

Controlled Group: 1 plan is safe harbor and 1 plan is not. Plans do not pass coverage separately. Can I permissive aggregate the SH and non-SH plan for to pass coverage? If I can, I understand I now have to run an ADP/ACP test on a combined basis. In other words, for SH plans you are deemed to pass ADP and do not have to run a test. But am I 1) "allowed" to run a test 2) run a test on an aggregated basis with a non-SH plan. (Assume same plan year end and testing method) Any thought would be greatly appreciated.

Hi, I have a source in the plan that the employer states is a employer contribution and we think it is a pretax contribution (although this is technically an er contrib as well). In the plan document: "Deferrals of ABC or Profit Sharing. A Participant may elect to defer and designate as his/her Deferred Savings all but not less than all, of the ABC and/or Profit Sharing. Any Deferred Savings elected to be deferred under this section shall be deducted from the amounts otherwise payable to the Participant under the ABC and/or Profit Sharing, and shall be paid to the Trustee no later than 15 business days." Would this contribution be treated as "pretax" for ADP purposes?

We completed the 2014 ADP/ACP test in March 2015. ROEs were processed and ATM was forfeited. It turns out the client funded a match true up in June 2105. This was never included in the testing. We had 4 HCEs who had ATM due to the ADP failure and they also received the match true up contribution. Including this true up in the 2014 Test results additional ATM needing to be forfeited. Generally, if the plan is not fully corrected within 12 months of the plan year, you are not longer able to apply the otherwise excludable option and test those with less than 1 YOS/Under 21 separately. Since only additional match needs to be forfeited and no distribution needs to be made, can we still apply the OE option? Or is the plan not considered fully corrected since the money is still in the individual participants account and therefore the OE option is off the table?

No, US(w-2) reportable income.

Plan compensation is defined as w-2 earnings.

Would compensation from Canada be counted for HCE determination?

Plan sponsors both a US and a Puerto Rico plan (not dual-qualified but separate plans). I have an HCE that worked for both companies during 2015 and participated in both plans. Does mandatory HCE aggregation apply? In other words, if both plans were US plans (assuming part of the same controlled group) and the HCE was eligible and participated in both plans, I would be required to aggregate their comp/contributions under both plans and test the total in both plans. Is this a requirement if US vs Puerto Rico plan?

Thank You! If the plan has after-tax, then they would need to include all. It is not the case in this plan.