Lou S.

Not allowable. 3% non-elective is less than the at least 4% minimum match that participants were guaranteed under the document and in the notices.

Pre-approved prototype and volume submitter DC plans is 4/30/2016. Pre-approved DB plans is TBA but will be 2 years from when IRS approves the documents. Custom plans vary based on 5 year cycle and last digit of lead sponsor's EIN.

Yes you can do a SHNEC of 3% and a fixed match of 25% of the first 4% of pay.

In that case yes, if they match 100% of the first 3 and 50% of the next 2 that will qualify for ACP relief when there is a 3% SHNEC. The rule as I recall is you can have any match qualify as a fixed match in the document so long as it follows a few simple rules - 1 - It can not match deferrals more than 6% of pay. 2 - It can not increase as the rate of deferral increases There may be a couple others but that's the basics. What they can't do is count the 3% SHNEC as a 3% match and only match 50% from 3%-5%.

If I understand it the client wants match of 0% of 1st 3 % plus 50% of next 2%? If so that won't satisfy the ACP safe harbor as you have an increasing rate of matching contribution as deferrals increase, namely the bump when a deferral rate > 3% of pay.

I agree with Mike. To go further, is 100% of the Drs individual corp income from services to Dr. Group Inc.? If so they might be employees of Dr. Group Inc. improperly receiving payments to their corporation. But this isn't really my area of expertise. Just how it "looks" to me.

Isn't Doctors group inc the FSO (A-Org) and aren't each of the individual doctors B-orgs in this classic ASG? https://www.irs.gov/pub/irs-tege/epchd704.pdf

I believe you are obligated to try to locate them when you are forcing them out. I am not aware of being obligate to track them down if they don't give you a forwarding address. Obviously if you can find them cheaply best practices would imply doing so but there is a cost benefit issue to deal with, namely who pays for locating them? And it's not just statements you need to worry about there are a host of other items required to be sent to participants like fee disclosure, SMM and SPDs, SAR, etc...

Self employed or W-2 employee? Also I'm not sure if the IRS has a stated position on this but I was under the impression that they frown upon giving accrual credit to folks with zero pay.

Generally you can discriminated against 1 HCE over another but in this case I think you run into potential ADEA violations.

You might want to talk to the actuary who signed the 2014 SB, especially if he's still going to be signing the 2015 SB.

I think you have a disguised 5 year eligibility requirement for the PS in operation.

It's shady at best. It's impermissible at worst. Tell the client that the IRS could view this as an impermissible in-service distribution that could open the plan to penalties and sanctions as well as potential disqualification (though I doubt the IRS would go that far) and let them make the decision on whether or not to allow it. Also recommend they run it by their ERISA counsel before signing off on it.

It is highest percentage owned at any time during the year. So if someone sells his stock on the 1st day of the Plan year they are a 5% owner that year and are considered to have owned 5% of the stock in the prior year, next year.

More than 5% ownership in any company that is a member of the controlled group makes that person a more than 5% owner for the purposes of HCE and Key-Employee determination.

Since the short service folks need to get 3% anyway because of TH why not designate some or all of the TH minimum as a QNEC to those folks (assuming the Plan allows for that) and see if that passes the test?

Thanks Mike, appreciate the feedback. In this case I think we are good.

^that seems to be my vague recollection as well.

If we are using a Defined Contribution PPA approved prototype or volume submitter with no modifications that recently restated its document for PPA, are there any additional snap on amendments upon Plan termination that need to be executed as of February 2016? I can't think of any but wanted to make sure I'm not missing something.

I remember they used to be real sticklers on that point but I thought around the time of Enron they relaxed their position. But I could be forgetting something or confusing it with another point. 2 of the biggest problems with it treating it as a contribution even if nondiscriminatory are 415 issues for participants with relatively large balances to current salary and terminated participants who have no 415 comp.

Can you have the ins company send a quote for the early withdrawal change and pay it directly to the INS CO as an investment expense?

Oh and if you do merge you'd still need a 204(h) notice since the guaranteed MP contribution would be going away. Also if you merge the in-service restriction would be age 62 at the earliest for the transferred MP money in addition to the J&S requirements referenced by ErisaGeek above.

I think you can but unless you apply for and get a PT exemption, I believe it is a prohibited transaction. and My 2 cents, did you get an independent appraisal for the goat first?

Merge the plans?

I could be wrong but if you are testing them together as a CB/DC combo, I'm pretty sure the CB accrual will trigger gateway requirement for the ee in question. I agree the match will not trigger a gateway.