Lou S.

Why? I mean assuming using the correct 2019 limits $30,000 pay $25,000 deferral (19K in 415 limit, 6K not part of 415 limit) $7,000 PS contribution. You get $26K in 415 limit which is less than 100% limit.

You can't defer more than 100% of pay. Employer contributions plus catch-ups can take you over the 415(c) limit [dollar or percentage] but someone with only $20K in compensation can't defer $25K.

I think you may need your election form to show that your employer was withholding the wrong amount or there is very likely no correction to be made as they are simply following the terms of the Plan. If you elected to contribute too much per pay period such that you hit the annual limit early and the Plan has a per payroll match, you may simply be out of luck for the remaining 2019 match. As for giving you and only you an additional match, probably not under the terms of the plan document.

The deferrals from 11/1/2018 - 12/31/2018 are all 2018 catch-up contributions due to exceeding the 2018 402(g) limit as stated above. As such you can ignore them for the PYE 10/31/2019 for all testing and limitation purposes. The 415(c) limit for limitation years ending 2019 is $56,000 and the catch-up limit for 2019 is $6,000. He has already used $1,245 of the catch-up limit in 2019 for exceeding the 2019 402(g) limit and and has $4,755 remaining in catch-up for calendar 2019. So you currently have ($56K limit - $19K deferral) = $37,000. If he receives a PS contrib of $37K or less you are done - assuming you pass all non-discrimination tests. Under this scenario all deferrals from 11/1/19 - 12/31/19 would be catch-up contributions for 2019 (assuming you don't exceed the $25,000 total limit for 2019) and these would again be ignored in the PYE 10/31/2020 testing. On the other hand, he can receive a PS contrib of $41,755 and deferrals $4,755 would be recaharterized as catch-up in 2019 in PYE 10/31/2019 due to exceed the Plan's 415(c) limitation. Under this scenario all deferrals from from 11/1/19 - 12/31/19 would NOT be catch-up contributions for 2019 (assuming you don't exceed the $25,000 total limit for 2019) and these would be included in the ADP and 415(c) limit for the PYE 10/31/2020 testing. I'm assuming limitation year = plan year in your document. Have I said before how much I dislike off calendar year 401(k) plans?

You can amend the formula for the year at any time prior to someone meeting the allocation condition to receive a contribution in the document. Once you have a participant who has reached the allocation condition you can not make it more restrictive for the year or you will have a 411(d) prohibited cutback. In you case once you have a participant credited with 501 hours you are locked in to the contribution. Also because a Money Purchase plan is a Pension plan, make sure you are also in compliance with the 204(h) notice requirements with respect to timing if you cut future accruals.

As long as the Plan's Trust is in existence you must comply with the RMD rules under 401(a)(9).

Link to thread where it is addressed It's the ASPPA code of conduct thread in the Operating a TPA subforum. If the link doesn't work.

Whether it is too late for 2020 could be up for debate. You've missed the 30-90 day "safe harbor window" before the start of the plan to distribute the Safe Harbor Notice for 2020 but you might be able to argue that the a notice distributed now before January 1 is timely based on facts and circumstances. Especially if you can show all participants have an effective right to change their elections before 2020 deferrals start and a sign off from every eligible participant might go a long way towards showing that. As for terminating and starting another 401(k), yeah successor plan rule will kill that. From IRS website https://www.irs.gov/retirement-plans/notice-requirement-for-a-safe-harbor-401k-or-401m-plan Timing requirement General Rule: Generally, the safe harbor notice must be provided within a reasonable period before the beginning of the plan year. The timing requirement is deemed to be satisfied if the notice is provided at least 30 days (and not more than 90 days) before the beginning of each plan year. If the notice is not provided within this time frame, whether the notice is timely depends upon all of the relevant facts and circumstances.

I'll add my voice to the chorus or Excess IRA contribution. The one twist would be if the checks or transfers to the SEP-IRA account were from a partnership account in which case you might have other issues. Needless to say he "probably" deducted the contributions to the SEP and will likely have to file amended tax returns for those years.

Sounds like it would violate BRF in a non-safe harbor plan. Sounds like it would completely blow up in in a SH plan as the rate of matching contributions increases at 4% from 0% to something larger than 4% since deferral rates of 0.01 - 3.99 are not allowed.

I believe in some states a participant is allowed to stop the payroll deductions but I'm not a lawyer so I could be mistaken.

The plan can establish procedures to review credit worthiness of plan borrowers. If the plan believes the loan is simply a disguised attempt to circumvent the in-service distribution rules, yes they can reject the loan.

I would argue the limitation of allowing the increase "only to maximum" is dicriminatory in practice and interpret it as increases in the last 2 months are allowed. That said, I'm not sure why in this day and age the Plan doesn't allow changes as frequently as the participant want to fill out new forms but that's a separate issue.

Yes if you are eligible to file an EZ but chose to file a 1 person SF you are not required to file if assets are under $250K. But it only applies to plans eligible to file an EZ not all plans under $250K. You can search the 5500-SF instructions til the cows come home but unless they make changes to the instructions in a future printing, you won't find it.

Only applies to Form 5500-EZ and those eligible to file that form.

I'm guessing there is some contractual language where the custodian of plan assets puts a hold on distributions for "x number of days" when they are notified of transfer to new vendor or complete Plan Termination. I'm guessing this is a large vendor daily valuation platform the OP is referencing as we are running into a similar situation with one of our vendors. I'm wondering what if any leverage the client has with respect to getting distributions processed more timely.

A "couple year later"? Why weren't the paid within a year of the termiantion? Who has been filing the 5500 each year?

$50,000 / 1.0 = $50,000. Therefore the RMD for 2019 is the lessor of $50,000 or 100% of the the current account balance (which would have been the case if the IRA had a loss). Presumably the divisor will be 1 (or lower) for the 2020 RMD which will likely wipe out any remaining balance but you could be in another situation where you wipe out he balance except for the gain between 1/1 and actual RMD next year. Clearly they are paying out under a different method than the one where the divisor caps out at 1.9 at age 115 and above, but nothing wrong with it as long as your are following the rules.

I agree with Kristina. Send him a check and let him know he will be receiving a tax document for the income whether or not he cashes the check. As an aside the participant died in 2016, when did RMDs begin and can you just pay the beneficiary out under the 5 year rule, assuming no distribution have been done since 2016?

Isn't this your answer right here? That is the Plan does not allow it. If the Plan allows for partial distributions the amount above the RMD is subject to 20% withholding assuming it is eligible for rollover. As for taxes owed it would be ordinary income but since it is a death benefit distribution it would not be subject to the 10% penalty on early distribution regardless of the beneficiaries age. I would assume beneficiary could take the whole account and could probably roll to Inherited-IRA.

And the broker doesn't want to go through the hassle of the paperwork for assets that are going to in and out of the plan and for which he's probably not getting paid. But that just goes to Bill's point to maybe find another advisor.

I think technically you could do a 3% safe harbor with maybe notice very other year but as austin notes, good luck with the employee communication and I guess there is a possibility the IRS could rule it abusive. Though it doesn't seem you would not be violating the letter of the law so I'm not sure the IRS would have a leg to stand on, especially if you made sure to dot every i and cross every t with respect to timing of notices, plan amendments and deferral elections.

It needs to run through the trust and he needs to receive a 1099-R. Ask the broker to put it in writing that he'll personally indemnify the Plan Sponsor for any all penalties that may arise from the Plan Sponsor Paying the participant directly outside the Plan. I'm not sure why it's a problem reopening the account but you can open an account in the name of the Plan anywhere and pay it out from there.

Company B has had a 401(k) Plan since October 1, 2019 when they took over sponsorship of Company A Plan.

If Company B did not want a top heavy 401(k) plan it should not have assumed sponsorship of company A's plan, I would have thought that would be part of the due diligence. Rather it should have started a new 401(k) and let Company A wind down the old 401(k) plan. I'm not sure how you get around the successor 401(k) plan rules if you terminate the Plan now.