Lou S.

Correct me if I'm wrong but I thought to use self correction you had to fix within 2 years of the end of the plan year with the defect. Am I missing something?

Depends how competent and diligent you are. If you are willing to educate yourself enough to know when amendments are needed, understand how law changes effect your plan, stay on top of tax filings and will never have employees other than yourself you can probably do it without a TPA. But I think you'll also hear some horror stories from folks on this board about folks who came to them after things blewup on them trying to do it themselves. As the saying goes, you generally get what you pay for.

No. You are increasing the match for some or all but none will have match cut.

As long as it is not a safe harbor plan (because it would change the info in the notice) you should not have any problems with such an amendment as you won't be cutting anyone's benefit. I think the IRS views this as a discretionary amendment that needs to be adopted before the end of the year.

Yes. Assuming there is at least 1 key employee covered by both plans receiving an allocation in the SEP.

All NHCEs? No problemo.

If it is eligible for rollover, then yes 20% mandatory withholding applies.

I think you folks mean SMM (summary of material modifications) not SAR (summary annual report) but I agree. Amend the plan to vest just those folks who terminated as a result of the business transaction and be done with it. In the future, similar transactions can be done on a case by case basis with nor precedent set by the prior amendment. Each business deal can stand on its own. Maybe as part of this transaction it was agreed that participants involved would be 100% vested. But at any rate I don't see a problem unless nearly all the terms are HCEs.

Yes it is permitted as long as it is not discriminatory.

No haven't had a client do it. Yes it is allowed. I would assume it would be subject to BRF testing.

It is not the question that is the problem with the OP. It is the condescending way in which he asks it.

The OP could just take the EA Exams and self administer the plan. Shouldn't be too hard. I mean all he has to do is take a few easy tests and then push some buttons.

For what it is worth this was addressed on today's IRS webcast. The speaker from the IRS said a person whose last day is 12/31/xx is considered to have separated on that date. Again this is not formal IRS guidance as it is a merely a webcast.

Oh and it will probably taint the plan they are spinning off to as well.

It's a qualification defect.

Out of curiosity is the Plan AE $6K or the 417(e) rates $6K? If the later is it possible that that PVAB will be under $5K next year? If so maybe use that as leverage to get spousal consent to rollover to IRA and have them divide the IRA in the divorce?

What does the Plan Document (or new amendment) say?

based on this I believe the prior year NHCE ADP is SD + PW and current year HCE ADP is current year SD + PW. assuming the deposit timing of PW allows you to use it in Prior year testing. If the QNEC is in your test you can't throw it out for HCEs but include it for NHCEs.

What does the Plan document say. We have very few annually valued plans left but unless the document says different we pay the value on the last valuation for the entire year. So for calendar year plans up until 12/31/xx+1 we pay out 12/31/xx value.

Does your current plan document limit compensation to the 401(a)(17) limit but reference with increases already built in or does the plan document have a compensation limit dollar amount that needs to be amended every time the limit increases? If you have the former you're not amending anything, if you have the later I believe the restriction would apply.

You leave them out of the ADP test as they were excluded from making deferrals.

But the exclusions by Job Title don't sound like a problem at all assuming you pass coverage testing which should be easy since those titles are all probably occupied by HCEs.

I think you might have more problems withe 403(b) exclusions. But I don't really deal with 403(b) so maybe someone else can speak more to that. A better solution might be to make everyone eligible for both plans and just tell the HCEs, make your deferrals to to to 403(b) or you may get refunds. Or make everyone eligible for both but limit HCE deferrals in the 401(k) plan to $0 per year thus forcing them to make deferrals to the 403(b).

I seem to recall around the time of the GUST restatements that you were now allowed to eliminated annuity options in non 412 plans without it being a cut back. There were some employee notice and SPD requirements but it has been a long time since I looked up the rules.

This FAQ from the IRS may be helpful http://www.irs.gov/Retirement-Plans/Retirement-Plans-FAQs-regarding-SEPs-Contributions