Lou S.

The correct step is to return the RMD to the IRA because it wasn't eligible for rollover and have him take the RMD from the IRA before 12/31/19. Whether or not the participant and Edward Jones will actually do that is a separate matter.

https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-required-minimum-distributions-rmds In 2019 I think you are limited to single life of beneficiary or single life factor for the participant from the prior year minus 1. If spouse rolls the remainder to an IRA in their name and treats as their own in 2019 (not an inherited IRA) the 2020 RMD would follow the regular rules for RMD of the IRA owner and you can use the longer table for payouts. The one that assumes joint life with beneficiary 10 years younger.

Good advice in the 2 posts above. Short answer is if you own or are deemed to own more than 5% of the company in current or prior year you are an HCE for the current year. If you made more than a certain dollar amount in the prior year you are an HCE for the current year. There is an election you can make that can limit the number of HCEs due to pay to the top 20% of your employees. If you are eligible for the plan for any part of the year you are in the test. There are a host of elections and testing options that can make this much more complicated because the IRS never likes anything to be easy so that's why you hire a TPA firm to do this for you. They should be able to explain most of the basics to you but if you want in depth explanations about how the tax code works be prepared to pay for their time.

Some monies could be made available prior to 59.5, others are restricted. Your understanding seem correct.

What are the consequences of not following the terms of the Plan document?

If you set them up for filing this year on myppa.gov do you get access to past filing history? Or does myppa.gov only store only the history you done from prior years? I haven't been in a situation like yours so unfortunately I can't give you a firm answer.

As to the last question - No.

It is very reasonable to have a vesting schedule for 1 person plan. #1 in case plans change and he hires someone. #2 if the plan is put in at or near age 70.5 to delay first RMD. #3 I'm sure there is a good #3 but I can't think of it.

It's more likely she's trying to exclude 20% of her income from taxes on the qualified business deduction but I Larry said it better than I, she sure sounds like an employee no matter what she wants to be called.

As JAA says if testing passes, noting to correct. If testing fails VCP is likely only option.

Since same sex marriage is now legal, is this an outdated requirement from the the City of San Francisco? I'm not sure how under Federal Law and ERISA you would have a domestic partner considered a spouse with the same rigts, but I am not a lawyer so I could be missing something obvious. Like you point out I doubt there any ability for a domestic partner to roll to an IRA they treat as their own as a spouse could, you would need to roll to an inherited IRA like any other non-spousal beneficiary.

Refer her to the company's employment attorney.

The Plan should be amended to have XYZ, Inc. be the plan sponsor.

And don't forget this will not be a "qualified plan asset" you won't be able to file Form 5500-SF and you have additional requirements to avoid the small plan audit requirements is that's a concern.

If they terminated and are not employed on the last day of the plan year they do not have to receive the TH-minimum, assuming you are passing 410(b). If they are not receiving the allocation because they failed to work 1000 hours but are employed on the the last day of they plan year they need to receive the TH-minimum. The TH-minimum can be off set on a dollar for dollar basis by any matching contributions they received, if the Plan document allows.

You have to follow the terms of the plan. If they were eligible for the SHNE they need to receive it. If this creates a 415 problem, you need to correct.

What does the Plan Document say?

The short answer is yes they can. Loans are not a protected benefit and can be eliminated or restricted at any time. Whether or not they did do that is a separate question you would have to ask your plan administrator as your last documentation seems to contradict what your 401(k) company is saying.

I would start by requesting a copy of the 2019 Safe Harbor notice that you should have received sometime in October or November last year.

I meant last year in the 30-90 day window what notice was given about the current year safe harbor.

Did they give a "maybe" notice for this year? Are they going out of business or faced with a heavy financial loss?

The 401(k) Plan must independently satisfy the the 401(a)(9) minimum distribution rules for 2019. So yes I agree with the accountant.

If it was 2018 - then I don't think there is any thing to correct. If it is 2019 - then the plan should send him the additional $2000 and recover the $2000 withholding from the feds. That may or may not be practical or easy.

You withheld too much, simply report what you withheld and move on. As ESOP guy says it all came out in the wash when they did their taxes. Unless you are recoveing the the extra $2000 in taxes that was sent to to the IRS and sending it to the participant.

There are a number of acceptable ways to do it but it should be coordinated in both documents as to where and how the top-heavy minimum is satisfied. You may find that switching from a SH match to a SH non-elective may be the way to go. Largely due to losing the get out of TH free card and fact that you may need to satisfy the gateway requirements that often (but not always) in small plans works out to a 7.5% of pay contribution to NHCEs in the DC plan. You'll also often find the TH minimum in combo plans is given in the DC plan. If a non-key employee is covered by both plans you typically have the following options 1 - Give TH minimum in both plans 2 - Give 5% minimum in DC plan 3 - Give the 2% minimum accrual in the DB plan 4 - Another method acceptable under the code. If a non-key employee is covered by only one plan, they receive the TH minimum in the plan they are included in.