Lou S.

That is a good point. I do know for a fact that each IRA conversion to ROTH has its own 5 year conversion period and maybe I projected that incorrectly back to ROTH 401(K) Plan conversions. But can't put my finger on an in plan citation so I could be wrong on that piece.

It might be addressed in your plan document whether a Statutory Employee is considered and employee or independent contractor for purposes of the plan. The Plan's eligibility might also address whether or not Statutory Employees are eligible for the Plan or not, assuming they meet any other Plan eligibility conditions or if they are specifically excluded. Though typically I think when statutory employees get covered under employer plans there is much higher likelihood that they are then Common Law Employees. You can always run the question by counsel if you are not sure or the document is unclear.

That blurb seems correct. In recent years, some platforms have gotten more strict about requiring a participant to submit an actual W-4 instead of just electing out on their distribution forms if they don't want the 10% but you can elect out of withholding for federal purposes or elect more if you are in a high tax bracket.

A participant has "one" clock for their ROTH deferrals per plan, it starts with the first contribution year. There is no class year counting of ROTH 401(k) contributions for the 5 year clock, once you've satisfied the 5-year period, the participant is good for that particular 401(k) plan. That is if you are 59.5 and your first contribution year was 5 for more years ago, your distributions would be qualified ROTH distributions. Subsequently each in-plan ROTH conversion has it's own 5 year clock. As long as you can track it on paper and can report it for taxes, you are fine. Lastly I am not sure how the clock works with respect to SECURE employer contributions that a participant elects to have deposited as ROTH, should the plan allow for that. I'm guessing it is addressed somewhere or in future guidance on SECURE 2.0 but I'm not 100% sure on that.

ACP testing is required for after tax contributions, safe harbor does not exempt you from this.

I think Peter's post gets to the heart of the cut back issue. In his example the participant may already have the $17,250 match deposited on a per payroll basis which when you test it will be a 5% annual match rate (assuming they don't get any additional match). So you have to be careful about the rate of match as a BRF.

I don't think it is situation contemplated by the regs or the document so I think the Plan Administrator would need to reasonably decide. I think one reasonable method would be an annual cap of 401(a)(17) * (weighted average of match rate) so using your formula above I'd get an annual cap of $345,000 * 3.75% = 12,937.50. I can see several other arguments for doing it differently but I think that is reasonable and doesn't give HCEs a higher rate of match than NHCE could have. But then you also need to consider any possible cutback issues.

It depends how compensation is defined in the document. Not getting into your change in match formula mid-year typically you would calculate the match on a on a per payroll basis but have an annual cap that should not exceed match rate * 401(a)(17) limit.

She is subject to the same eligibility conditions as all other employees. Now if you are asking if her unpaid service counts towards the 1000 requirement, that's not an argument I'd like to have with the IRS on audit.

You can try and sell them even though that might be hard. That's probably the best course if you can do it. You can apply for a PT exemption and buy them from the Plan at FMV though the cost of doing that might be prohibitive for near worthless assets. Follow Bill's advice to transfer them to an IRA but that probably just punts the issue down the road and you'd need a participant to agree to take it as part of their distribution (probably the majority owner if it's a small plan) though that technically could be considered a BRF violation though one that's hardly likely to be enforced. Is this a DB plan and do you might have one or more (annuity/over funding excess assets/under funding/pbgc concerns) issues that you might need to consider or is it a PS plan where those aren't likely to be an issue?

Yeah it's just a formality. I mean technically the IRS could hit you with a hefty penalty for not filing. But if they audit a plan that has zero assets because the funds went to zero the disallowance of the IRA rollover and taxation of trust income would presumably both be $0 even if they discovered any problems.

You seem to have a few options. 1 - Let him keep it. track it separately. Bill accordingly and be aware you may have a BRF issue if he's the only one allowed to do it. 2 - Have the other Trustees force a sale to move the conversion along. Know that this may or may not cause the participant to start a lawsuit against the other fiduciaries who force the sale. 3- Walk away and keep the plan at RK A. 4 - Does BKB have a SDB option where the assets could be transferred in kind? Other people may have other ideas for you.

If it is an asset purchase then yes it sounds like ABC would retain the SIMPLE-IRA and any funding obligations for 2024. Should XYZ grant service with ABC for eligibility then yes the folks who enter would get a 3% contribution for their pay with XYZ. If any employees exceed the 402(g) limit because of participation it what is essentially 2 unrelated plans (at least in the IRS eyes) then they would need to request a refund under one of the plans and complete it before 4/15/25.

If it is frozen 5/1/22 I don't see how you get an accrued or projected benefit payable higher than the 2022 limit. Unless maybe you have increased benefit for late retirement in which case I think your 415b limit is still the 415b limit in the year with your annuity starting date I believe.

It sounds like you have a change in vesting schedule. That is employees hired before X are 100% vested, people hired after X are subject to 2 year cliff. If you meet the rules you should be fine. If the plan was setup initially to favor HCE with the immediate vesting then shortly after or concurrently with initial adoption changed to the 2 year schedule for folks hired afterwards, you probably have BRF problem with respect to your timing. if the plan has been running awhile and they switched to 2 schedule, shouldn't be a problem.