PensionPro

Per revenue procedure 2015-36 pre-approved program does not cover non-electing church plans. This will change with cycle 3 restatement but those documents will not be available until 2020 at the earliest.

The excess can be refunded after April 15. The 401(a)(30) limit applies to an individual. The participant will be taxed twice. Tax was already paid at deferral since it is Roth. Tax will be paid again at distribution because participant does not get credit for basis on the excess deferral. Plan document should contain provision for excess deferral situations where participant also defers to an unrelated plan.

A rehiree is not a retiree. The rehiree is eligible for distributions to the extent the plan allows in service distributions.

how does the plan define compensation?

§ 416(i)(4) exempts union employees from the top heavy rules. What is the basis for this employee's entitlement to top heavy contributions? Never encountered this situation myself.

Our valuation software has the option to mark yes or no to the question: Last day terminee considered active?

You should read the Summary Plan Description (SPD) as it relates to the timing of distributions. If you do not have a copy, you can request it from the Plan Administrator.

attached dol q&a with aba from 2009 presents a different perspective and suggests two plans sponsored by an employer are okay even if it results in avoiding the audit requirement. temp.pdf

Recommend asking the CPA. Some of them are tax-exempt but not under 501(c), so most likely not subject to 457(f).

If you have a significant operational failure that was not corrected within the two-year correction period you have to correct via VCP. I have serious doubts that the IRS would approve a retroactive amendment with no corrective costs in VCP but no harm in trying. Advising self-correction by means of a retroactive amendment is imprudent.

Unless I am missing something the plan is not subject to universal availability. The plan should seek legal counsel.

If you improperly exclude eligible employees the correction is to make a QNEC.

401(k) deferrals and rollover funds have different characteristics and may be subject to different distribution and other rules so it may be a little more than an accounting issue. Excess contributions are deferral amounts that caused the failure of the ADP test so the failure could not be corrected by directly or indirectly distributing rollover funds.

Minimum Coverage Requirements. In the case of a section 401(k) plan, a corrective amendment may only be taken into account for purposes of satisfying § 1.410(b)-3(a)(2)(i) under this paragraph (g) for a given plan year to the extent that the corrective amendment grants qualified nonelective contributions within the meaning of § 1.401(k)-6 (QNECs) to nonhighly compensated nonexcludable employees who were not eligible employees within the meaning of § 1.401(k)-6 for the given plan year, and the amount of the QNECs granted to each nonhighly compensated nonexcludable employee equals the product of the nonhighly compensated nonexcludable employee's plan year compensation and the actual deferral percentage (within the meaning of section 401(k)(3)(B)) for the given plan year for the group of NHCEs who are eligible employees. [§ 1.401(a)(4)-11(g)(3)(vii)(A).] I believe the bolded portion of the citation provides the formula for calculating QNECs. We had the approval of legal counsel in a similar situation and had no fears about defending our position under audit. I am just narrating our experience and hope it is helpful and no pressure to agree with my position!

The QNEC is 0 according to the regs.

imo part of the loan needs to be distributed but check the plan provisions

do 0% MPPPs still have reason to be established?

if excluding nhces arbitrarily you will have to pass rpt for coverage.

top heavy minimum is based on 415(c)-2 comp, which states that items includible as compensation are ... The employees' wages, salaries, fees for professional services, and other amounts received (without regard to whether or not an amount is paid in cash) for personal services actually rendered in the course of employment with the employer maintaining the plan, to the extent that the amounts are includible in gross income (or to the extent amounts would have been received and includible in gross income but for an election under section 125(a), 132(f)(4), 402(e)(3), 402(h)(1)(B), 402(k), or 457(b)). These amounts include, but are not limited to, commissions paid to salespersons, compensation for services on the basis of a percentage of profits, commissions on insurance premiums, tips, bonuses, fringe benefits, and reimbursements or other expense allowances under a nonaccountable plan as described in § 1.62-2(c).

Depends on the reason some participants are getting zero. For example, if they are getting zero because they failed to meet allocation conditions, you could still pass coverage using ABT.

Tom, Thanks for your response! I understand the general rule. The question comes up because the testing group is different: for 410b I am testing ees of X and Y (and it passes on an otherwise excludible basis). Since 410b passes I can run ADP test for ees of Co X only. I would like to run ADP test aggregating all ees of Co. X (including otherwise excludible ees of Co. X). Can I do that? I believe you are saying no?

Facts: Company X and Y form a controlled group. X has a 401(k) plan, Y does not. To pass coverage for the Co. X 401(k) plan, the RPT passes by disaggregating otherwise excludible employees of both companies while treating employees of Co. Y as not benefitting. Question: When performing ADP test for Co X 401(k) plan am I required to carve out the otherwise excludible employees or can I run an aggregated test including all eligible employees of Co. X? Thanks!

Also, is there any exposure from using the DOL calculator (instead of computing actual earnings) if not filing under VFCP? Thanks!

Did something change or is this still an option to pay the excise tax to the trust if that amount is less than $100? Thanks!

Yes, they are public institutions that are 403(b) eligible employers due to their 501(c)(3) status. They have to meet certain requirements to enjoy this dual status. They must not be an integral part of the government, and must not have significant enforcement, regulatory authority.