Lou S.

I think you can do it if your document allows for it, but you have to have a fail safe language to bring in folks who meet the 1000 hours in the 1st year but not the first six months. I could be wrong but it sounds like they are trying to bring in "full time employees" after 6 months while excluding "part time employees". Which can be problematic under IRS rules if not structured properly.

9/30/ 2022 is too late to convert to a SH Match, that would have had to have been done prior to the start of the Plan year. They could have added a 3% safe harbor non elective by August 31 (yesterday) or can add a 4% non-elective prior to 9/30/22. They can go to a safe harbor match for PYB 10/1/2022 but you are outside the safe harbor 30 days before the plan year for distributing the notice. You can probably argue on fact and circumstance that the notice was delivered in a reasonable time before the start of the plan year. The sooner that is done, the more likley it will be deemed reasonable. OPPs just realized PYE in 9/30 and not 12/31 so editing response.

The missing 5500s could be subject to substantial non-filing penalties which were recent increased quite a bit. The filing of the final return might trigger failure to file penalty letters from the IRS. A 2009 document is probably an EGTTRA restatement I'm guessing and if that's the last document then you have a non-amender for PPA and Cycle 3 restatements as well as some interim amendments along the way likely missing. That's a plan qualification issue if not corrected. For open tax years, loss of tax deduction, taxation of trust income, distributions not eligible for rollover, etc.

Did the Plan offer CARES features to participants or implement any of the changes like no 2020 RMDs? If not my understanding is the CARES provisions were optional and not required so if you didn't offer it you don't have any required CARES Amendment. If you offered it but nobody took advantage, you then need a conforming amendment. Is my understanding incorrect on this?

Bill is 100% correct. He became eligible on his date of hire and immediately 100% vested. Any reduction from 100% would be a prohibited cutback under 411.

I would agree that looks correct with what you've laid out with respect to 1563.

Beyond my initial response it's not something I'm aware of, sorry can't help you further.

Final assets $0 PYB = 1/1/2022 PYE = Date of final distribution Yes, Short plan year. Use 2021 form. If filing on paper cross out 2021 and write 2022. If filing electronically, should be no problem if PYB/PYE date are correct.

72(p) gives maximums, there is nothing that prohibits the plan form allowing smaller loans. I don't see a problem for future loans and loans are not protected benefits.

What about excluding vesting prior the effective date of the plan? Give the guy an allocation (assuming you have fail safe in document to bring him in) , forfeit his balance, reallocate next year. You do have to worry about the Partial Plan Termination rules but pretty sure you can make a pretty good facts and circumstance argument for not unjustly enriching an embezzling employee if you have that all documented.

Yeah it is typically written as a fail safe for plans that have entry of less than 1 year of service for "substantially full time employees" but brings in the employees who actually meet the 1000 hour requirement and have a year of service. But then those employees are in for good even if they return to "part time" status. I wonder if some of the exclusions will be less used as SECURE will be bringing in long term part time employees next year even if they extended the actual amendment deadline to 2025.

I could be wrong but I think the IRS views the terms "part-time", "on call", "seasonal", or similar all pretty much the same and they aren't considered reasonable classifications for exclusion.

You can exclude reasonable classifications of employees provided you pass IRS nondiscrimination testing. Typically 410(b) coverage in this situation. I believe an exclusion of "less than 30 hours per week" is not considered a reasonable classification by the IRS and is not allowed.

Other than it being a quirk of how the plans were adopted, I don't see a problem if that's what you are asking.

The participant has not reach RBD so no RMD is due for 2022 under any set of rules that I'm aware of, if the product insists, have them produce a citation for their position that is more than "because we said so". What the plan allows on death and what elections the spouse makes will determine when RMDs must start for the spouse. My memory matches up with Belgarath with pretty much the same caveats about SECURE Act changes possibly clouding the issue. I "think" to extend the RMDs as long as possible the spouse could roll the funds to an Inherited IRA and delay RMDs until the participant would have reached age 72. I believe this part of SECURE changes is the same as pre-SECURE for spousal beneficiaries. If she elects to treat the IRA as her own, then RMDs would begin the first year following when she has a balance on 12/31 of the preceding year. So if she roll it to an IRA in 2022 in her name, then RMDs would start in 2023. If the money is left in the Plan, RTD on options available and payout timelines for beneficiaries.

That would probably be acceptable under EPCRS self correction, but it would require adding ROTH for all purposes and the client may or may not want to do that.

Yeah, testing is always an issue with late added 401(k) plans and getting people signed up in time for payroll deductions. I usually see the Plans set up with prior year testing the first year and limit HCEs to 5% of pay plus catchup to pass testing and concurrently amend to change to current year testing for the next year or amend in a safe harbor for the 2nd year going forward. I don't see why you can't amend to have auto enrollment start the following year if that's what you want. I think that's a notice issue you are concerned about right? Giving folks advance notice before the auto enrollment?

I think it's generally considered a prohibited transaction unless and exception applies. I've never had anyone do it fwiw. But you can try starting here and see if leads you where you want to go. But generally if I get the question, I say you should talk to your ERISA attorney and they usually come up with cash instead. https://www.law.cornell.edu/cfr/text/29/2509.94-3

Assuming calendar year tax payer and calendar year Plan for 2022 - Employer contribution only (PS/MP/DB/CB) - under SECURE the latest date would be the due date of the tax return with extensions. So deadlines would be 3/15/23 or 4/15/23 unextended depending on entity and extended deadline would be 9/15/23 or 10/15/23. And minimum funding deadline for plans subject to it would be still be 9/15/23. For traditional 410(k) Plan you can't make deferrals effective prior to the earlier of the signature date or effective date so you need plan adopted and 401(k) elections by 12/31/2022. For safe harbor 401(k) non-elective you need at least 3 months of effective deferral to be SH plan so you need the plan in place by 10/1 and elections starting the first payroll in October. For Safe Harbor matching you also need to give out a safe harbor notice in a reasonable time before the deferrals start. The IRS deems 30-90 days prior as reasonable. So you need to distribute SH notices by 9/1/2022. Now you can distribute notices between 9/1/22 - 10/1/22 and show that was reasonable but the burden of proof on reasonableness becomes facts and circumstances for you to justify less than 30 days notice as reasonable. Now how much lead time you need to do all this before those dates like design, documents, opening trusts, getting enrollment materials and ee notices, having ee meetings, setting up payroll, etc. I leave that up to each individual Employer/TPA/Custodian.

Is the aggregation group top-heavy and using the 5% DC contribution to satisfy 416? Is that what is causing concern? Because I don't think there is anything magical about 3%, 5%, x% allocation being used in a floor offset combo from a non-discrimination stand point.

http://www.cyberisa.com/books_erisa_tables.html For 2022 under ARP funding rules if you are using the 95% stabilization rates: 4.75/5.18/5.92 See link for full discussion and credit to Sal Tripodi Or the IRS site if you prefer https://www.irs.gov/retirement-plans/pension-plan-funding-segment-rates

I don't know if he started in 2021 he might not have known the deferrals weren't ROTH until he got his W-2 and filed his tax return. I mean the deductions came out and were showing 401(k), and the statements were showing it going in to the ROTH source. How is the employee supposed to know for sure that the payroll coding is wrong? It might have been his accountant who brought it to his attention. Now if this has been going on multiple years all bets are off.

JSample, but isn't this an employer mistake and not the employee mistake? It's fine for the employee to pay the taxes owed but the employer should be paying any penalties, interest and tax preparation fees the employee incurs dues to the employer error.

The other one who is employed on 12/31 but not reaching the 500 hour allocation requirement isn't getting the required TH minimum is my guess.

I'd refer them to an ERISA attorney for an opinion. I hate ASG relationships.