Lou S.

Assuming this is a controlled group, if the other companies have a 401(k), do aggregate testing. You'll probably fail and need refunds but hopeful you are not top-heavy. If the staffing firm doesn't have a 401(k), the correction is to cover the the other entities. Make a QNEC for missed deferral opportunity. Then correct the ADP failure (assuming there is one) either by refund or QNEC. Then make any additional contribution required top-heavy minimum since it sounds like the only contribution is the owner's 401(k). Possibly requiring VCP if not eligible for self correction to have the staffing firm adopt. The Plan wasn't ineligible,it just sounds like it fails coverage.

It would depend on how the exclusion in drafted in the Plan Document.

If the SIMPLE is 2 years old I believe she could elect to roll it to her 401(k) Plan account (assuming she is a participant and entitled to roll in to the Plan) but I don't think she can elect to roll it to his 401(k) account if that is what you are asking.

I don't believe you can exclude people with more than 1 year of service unless they are in an excluded class of employee that is not a disguised service condition.

I think I'd strongly recommend that the company get affirmative 0% elections or at least a something signed that eligible employees received the safe harbor notice, SPD and other notices. But yes as others have said if everything is on the up and up and simply no NHCE choose to defer, you get the TH exemption if you meet the rules which it sounds like you do.

Unless you kept copies of the statements, I agree with the others that it may be difficult if not impossible to recreate a 1997 starting point. Also your initial post mentions a rollover to an IRA at some point? If so you would be talking about dividing the IRA and I'm not sure if that falls under QDRO or under some other rule of law since it would no longer be in a qualified plan.

What if the CB was giving a pay credit of say 75% of what it would take to fund the 415 limit, but giving the employees a contribution such that that enough employees got a 0.5% pay credit to pass 401(a)(26) and than they made an annual 7.5% gateway contribution to a DC plan to pass annual nondiscrimination testing. Let's say you now have owner with a $2M cash balance and a $2.6M 415 limit while you have 5 other employees who have a total of $100K in cash balance accounts. Let's assume there are $300K in excess assets. You are comfortable without testing allocating ~95% of the excess assets to the owner and 5% to the employees without testing that? I mean I'm not saying it won't pass, I'm just saying that I don't think it its obvious that a pro-rata allocation is clearly non-discriminatory.

The discretionary authority is generally to interpret the rules of the plan that may be ambiguous in a consistent manner not to make exceptions to the written terms of the Plan Document, that typically requires a plan amendment. This is not legal advise and I am not a lawyer.

What does the Plan Document say about distributions to non-spouse beneficiaries and their options?

The requirement still exists as you a certifying the EZ is complete an accurate under penalty of perjury and that includes the FMV of assets reports. That said for a 1 person EV like you said unless it affects a distribution of the real estate or the value of assets for an RMD it really is a kind of a "no harm no foul" situation. Though as you learned from the audit that it can be an expensive fix. Make the client aware of them requirements and then put the onus on them to supply the the FMV for the 5000-EZ. I have had a few EZ audits in the past where the assets were not readily tradable on an open market (either real estate or 3rd party loan notes) and auditor didn't blink at the values being reported without an independent appraisal, but that more goes to show that every auditor is different because they certainly could have pushed the issue but didn't. I think they were more making sue that 415 limits weren't being exceed so sometimes it can depend on the nature of the audit.

See the current EPCRS rev proc, I believe it is covered there. Generally speaking for a calendar year plan if my memory servs its By following 3/15 - no penalties. By following 12/31 - 10% excise tax and Form 5330 but no other corrections After 12/31 - refunds, 5330(s) and 1:1 QNEC correction. I think if it is corrected in the 2 year window following failure you may now be able to self-correct but if it's more than 2 years you may need VCP but again I think those time standards are in the EPCRS procedure and should be relied on more than my memory.

I switched from Relius so can't confirm any more, but I'm pretty sure they had calculation overrides built it. Can remember if it was right clicking in the box or there was a specific calculation override button. Relius in theory should be able to help your client with that but one of the reasons I switched was their customer service and the difficulty in using it and their ticketing system.

That you do need a conforming amendment to adopt the $7K limit by the earlier of plan termination or the end of the remedial amendment period whichever comes first. But otherwise I don't see an issue.

Yes it meets the the requirement by making a single entry date on the first day of the Plan year and no one is kept out more than 18 months which is acceptable. Yes folks hired in June have the shortest 6+ month eligibility, May 7+ months, April 8+,....,Dec 12+ months, ... July 17+months

It was made in 2023 and will be a nondeductible contribution for 2023. I don't see how you don't report it on the 2023, 5500 and SB.

BRF

I'm guessing here but it sounds like the Bank is getting out of that business and just unilaterally converting accounts to what they still do. Doesn't make sense to me but that is my best guess.

If it is a nonprofit, does the 5330 apply? I honestly don't know but I think it's a question worth asking.

The best course might to move the money to an institution that will retain it's tax qualified status. If they convert it to his SSN and a personal account it's going to trigger 1099-R reporting on the income under his SSN which can cause him tax problems at year end and possible backup withholding issues. Whether they can do it I don't know as I'm not knowledgeable about banking regulations but it sounds like they are going to do it whether your client wants it or not so the easiest solution might be to move the funds before that happens.

Perhaps you could request an attorney recommendation from the body that has sanctioned you.

Move the funds before the conversion to personal?Get a new investment vehicle?

If it is your 401(k) including auto enroll and escalation, you should absolutely be able to opt out of those some how. Usually by overriding the auto amount with an affirmative 0% election. If it is a pure employer contribution they may not accept your waiver as is it is possible that could cause the Plan to fail discrimination with no recourse for them to be able to fix it and that would affect other employees. Have you spoken to an employment attorney who might be able to help you?That might be your best course of action.

Try here https://www.irs.gov/publications/p15b

Potential plan disqualification.

Yeah, I think you need to review plan accounting and how participant loans works.