Lou S.

Different parts of the plan can have different eligibility conditions. It can create some of the issues you discus in your original post. But if someone wanted to they could have something crazy like immediate eligibility for deferral, 3 month eligibility for safe harbor match, 6 month eligibility for non safe harbor match and 1 year of service for profit sharing. As long as the document was drafted correctly. I mean I'm not sure the added complexity would be worth it but if you aren't top-heavy and don't have owners with less than a year of service it's likely to pass all discrimination tests without a problem. There are some issues if you have a very high paid employee who becomes an HCE the 2nd year because they made over the limit in just a couple of months, you hire someone who immediately is a more than 5% owner in the first year (usually an owner's kid or spouse). But generally speaking everyone in your under 1 year of service group is going to be all NHCEs which will automatically pass for that group. If you are top-heavy, you'll lose the "deemed not-top-heavy" exemption with this kind of design so probably not ideal in the very small plan market in most cases.

Form 8955-SSA. It was called something else once upon a time but that's the current form to report terminated employees with deferred vested benefits. When participant applies for Social Security they get that notice if they were reported to SSA unless they were later removed. But in my experience it's been hit or miss that they actually get removed when you report code D. maybe it's got better in recent years but the old days it seemed like over half the folks who were "removed" still got the letter.

If the loan is offset, there is no asset to roll to the new plan. If the new plan directly accepts the loan note as a rollover to the new plan, that is different. The QPLO rules allow you extra time to come up with the cash needed to rollover the outstanding balance of the loan, I don't see anything that would lead me to believe you could roll the actual loan note to a new plan by the extended tax filing deadline if it was offset or defaulted and if defaulted instead of offset I don't think you can roll it over at all. That is if the loan has code 1L, 2L or 7L it is ineligible for rollover. If it has code 1, 2, or 7 it falls under the 60 day rollover rule. If it has 1M, 2M or 7M it qualifies for the October 15th (or next business day of weekend or holiday) of the year following offset timeline for paying off as rollover. If it has code G it was directly rolled from one plan to another. I think that covers the various scenarios.

If there is no one required to be reported, there is no Form 8955-SSA to file.

Sounds like a 415 excess correctable under EPCRS. He has $0 415 compensation his 415 limit is $0. Check your document for waht happens when you have a 415 excess, you probably refund the deferrals with earnings.

Maybe I'm off. Check the regs under 401(k)(12)(e) it seems like first and last years you might be able to get short PYE as long as 3 months long.

The answer is it depends. You can't just say the SHNEC is is effective 10/1 for a 3 month plan year for that component of the plan and say everyone's "participation comp" for the SHNEC is limited to 10/1 - 12/31 because you don't have the required 12 month period for a SHNEC. But if you have a say for example a 21 and 1 quarterly entry and base the SHNEC on partication comp then people who enter on 10/1 under that would be limited to 3 months of compensation for the SHNEC.

I imagine the plan allows for distributions at NRA and whether or not it is an RMD she can probably take it anyway. Just check the document t o make sure it's allowed. And since it's technically not an RMD it's eligible for rollover subject to the 20% withholding rules. But if she doesn't want the "RMD" she doesn't have to take it for 2021.

Your HCEs based on comp are based on the 12 month look back year unless you are using the calendar year election in a non-calendar year plan. So for your short PYE 10/1/2020 - 2/28/2021 your 12 month look back would indeed be 10/1/2019-9/30/2020. And yes it would be comp of more than $125K in that period. TPG election may or may not change results depending on your group but unless it was already in doc too late to amend now after PYE.

Except the owner had no balance on 12/31/2020 so the plan isn't TH for 2021. But normally yeah you'd be right about the TH minimum.

The examples in Publication 590-B (starting on Page 11) suggest that RMDs are required in year 1 through 9 and the account must be exhausted in year 10. https://www.irs.gov/pub/irs-pdf/p590b.pdf

Assume plan is adopted effective 1/1/2020 with immediate eligibility. Assume part time employee (PT-a) hired prior to 1/1/2020 but never works 1000+ hours in any year and assume he does not terminate in 2021. Assume plan is amended prospectively (today) on 5/12/2021 to change the eligibility from immediate eligibility to 21/1 dual entry. Assume that eligible employees under the prior rule are not grandfathered eligibility under the old rule by the document or amendment. PT-a is an eligible participant from 1/1/2020 - later of effective date of the amendment change or sign date of the amendment. He has entered the plan and is a participant for 2020 and at least part of 2021 from 1/1/2021 - later of effective date or sign date of the amendment changing the eligibility. Now you check his eligibility under the new rule of 21/1 dual entry and find he no longer meet sthe Plan's new eligibility condition and is no longer an active participant in the Plan. He is no longer eligible to defer under the terms of the Plan. For 2022 if he still doesn't meet the new eligibility terms you ignore him for all testing as he not a participant at any point in 2022. For 2021 it's complicated as he was an active participant from 1/1/21 - he was no longer a participant in 2021. So he's going to go into your ADP/ACP test (unless you are safe harbor), he's going to go 401(a)(4) test, he's going into you 410(b) test and he'd be due a TH minimum if the plan was top heavy or didn't meet the "deemed" not T-H rule. But in this case the only one with a balance is PT-a under your EPCRS correction so you're not TH for 2021 so that's not a concern. At least that's my understanding. I've never thrown eligible employees out the client has always wanted to grandfather them in when they make eligibility more restrictive prospectively. But you don't have to grandfather them in. Hope that helps.

He'll still be a current employee and you'll still be a title 1 plan (Bonding/No EZ filing/ SAR / notices all that good stuff) until he has a distributable event and takes his money out assuming he has an account balance, but he will be a former participant who no longer meets the eligibility conditions of the plan and will not be looked at for all the issues you are worried about. At least for future years. Since he was a participant for at least some of 2021 you'll probably need to satisfy all those issue you reference. But after that you should be fine. Well until comes back in under the long term part clause of Secure. But you can burn that bridge when you get there.

Yes and no. The loan offset does not require withholding if it's the only distribution. If he took a distribution to pay back the loan, he would need to gross it up for the 20% tax withholding.

It would be 7. For 7M to apply you would need a triggering event of termination of employment or Plan termination. Either of which follows your fact pattern.

If you mean the full $39K in the average benefits test, yes. As for catch-up the timing of deposits matter. If you exceed the 402(g) limit in calendar year 2020, they the amount in excess of the of the 402(g) limit in 2020 would a 2020 catch-up, assuming none of the 2020 cacth-up limit was already used in the PYE 6/30/2020. For 2021 calendar year there is only one catch-up limit so if they exceed 402(g) or 415 and are catch-up eligible you can recharaterize.

The successor rule applies to 401(k) Plans. Their payroll company is confused.

These 2 statements don't compute together.

Is it a controlled group? Or affiliated service group? What is his ownership in each entity?

Everyone has different goals and financial situations. I'm not sure a blanket statement about when to retire or electing when to receive SS works for everyone.

If they were withheld but not deposited yet, they are late and subject to earnings back to the point they were due to be deposited.

He would be considered an HCE and Key employee of B because he is an HCE and Key of a member of a controlled group with A & B by virtue of his more than 5% ownership in A.

I haven't tried yet but if you think it is browser issue, try Chrome. They have by far the largest market share so most folks do their testing to make sure it works with Chrome.

If they are catch-up eligible they can exceed the 415 limit by the catch-up limit. So if your prorated 415 limit is $14,250 and they are 50 or over they could contribute an additional $6,500 for a total of $20,750.

I don't think he can have it both ways. Either he's an independent contractor or an employee. Maybe someone smarter than me can up with a fact pattern where the doctor is sometimes an employee of the other doctor and sometimes an independent contractor of the doctor but that's above my pay grade. I think you need an employment attorney for that one.