Lou S.

I think if it's unclear in the document the Plan Adimistrator would resolve in most favorable way to participant which would be 1st day of the quarter following anniversary in the 12 month period where they worked 1,000. If the document cleary switches to Plan year after the first computation period then they would enter first day of the next plan year. As for the 1.88 MT that was referenced in my AA, your AA may reference a different MT section.

Yes but hard to see a scenario where it would fail if you did testing on a contribution basis. I suspose if you had low paid owners or low paid owners kids in the plan you could run into some situations where it would fail but I'd think in most cases you'd pass pretty easy.

Have you read 1.88 of the Master Text? I believe the answer is there in conjunction with how the AA was completed in the "Eligibility Requirements" Section. Also have you tried posing the question to Corbel/FIS directly, I found they are usually very good about giving responses concerning their document.

I doubt that is "a reasonable job classification" and I think excluding NHCEs by name can be problematic but I'm not 100% certain on that. I think you may need to find a workaround like "widget makers are excluded" where he just happens to be the only widget maker employed by the company.

Doing it wrong because it is expedient and "probably" gets the same result isn't really an excuse. I've got no problem with your recharacterization of the in-service, I'm just trying to figure out why the blow back on getting the reporting correct.

Code 7 is eligible for rollover Code 8 is not eligible for rollover

Well his in-service distribution might have been eligible for rollover and he might very well have rolled it over within 60 days but the ACP refund is not eligible for rollover. If he has funds in his account tyo cover the ACP refund I don't see why you don't just issue the refund. If the In-service drained his account to the point where it no longer covers the refund than yeah you need to send him a letter indicating a portion of his in-service in not eligible for rollover and recharacterize his in-service as part in-service and part ACP refund.

They entered the plan on July and became a participant. You state that participants can modify election "on any payroll period" so they can start on the next payroll after they turn in their election subject to admin procedures on when changes need to be made to be implemented. That is payroll might need some time to enter it into the system.

No you misunderstand I was thinking of him taking a hardship to reduce his plan balance under $2,000 to keep medicaid and using that to pay medical bills which he probably has at least a few not fully covered by medicaid. No?

I assume you mean without firing him? I'm not sure there are good options at this point for the Plan even though it stinks for the participant. "Here's a $1,000 for safe harbor, oh by the way it's going to cost you $12K in medicaid benefits annually". Which kind of seems screwed up on may levels. Did they remove the restriction on hardship distributions from safe harbor sources? If so can he take hardships to cover medical costs and drain his account? Can the plan be amended to have an excluded class of employee of which he is in the excluded class? I'm not sure this works in a safe harbor 401(k) but I think it is OK if you pass coverage. Probably doesn't help though until 2020 as he's already eligible in 2019 and the amendment cutting his benefits would be prohibited.

I think you have to go through a lot of hoop show it is not a prohibited transaction if you make "in-kind" contributions. If they really want to go that route have them consult with an ERISA attorney who is familiar with the rules as they can be quite complicated.

I believe for 2018 and 2019 they are key employees since they owned (or are deemed to own) more than 5% of the company in the current year for 2018 and the prior year for 2019. For 2020 and forward they would be former key employees.

My understanding is they would have until the due date of their tax return with extension for the year of loan offset to rollover the loan offset amount. That is if the loan is offset in 2019 you would have up until 10/15/2020 to complete the rollover. If he's trying to roll it over to the Plan you'll want to make sure the Plan will accept it, if he's trying to rollover to IRA should not be a problem.

I was under the impression that defined benefit plans could not have a last day requirement. That you could require more than 1000 hours for accrual but if you did you had to give partial accrual for 1000 hours. Is there an exemption for HCEs?

He needs to satisfy the RMD from his IRA(s) for 2019. I was using the simple case of having just 1 IRA where he would need to take the RMD before rolling into the Plan.

He would need to take his MRD from the IRA for 2019 before rolling the balance in to the Plan. Once rolled into the Plan he would fall under the 401(a)(9) rules for the plan so if he is not a 5% owner and continues to be employed he would not need to take an MRD from the Plan until he separates service. When he separates he would have a MRD for the year he separates due no later than April 1 of the year following separation.

I am not aware of any age restrictions in the code or regs that would prohibit it. Assuming \document allows for after tax and you don't have testing issues. If you did it properly you might be able to make the after tax contributions, do in plan roth conversion, then roll out newly convereted Roth piece to ROTH-IRA before end of year and avoid RMDs enitirely on them as well. essentially doing an end run around around both the ROTH IRA age limit and ROTH IRA dollar limit.

What is your Plan's definition of compensation? Does it exclude pre-participation comp?

C.B. probably hit the nail on the head. You probably have at least one HCE with a high EBAR and no or very few NHCEs in that HCE's rate group. It's often but not always the youngest HCE. Once you've identified the, you can come up with a solution.

I was wondering the same thing. And even if they somehow pass ACP, there is still the issue of 415 limits.

I think Doc Ument has a pretty good summary of the situation and likely IRS position but I'm curious - 1 - Is the trustee who signed the document in December 2016 also an officer, partner, and/or principal of the Employer authorized to execute documents on behalf of the employer? 2 - Is there a resolution, board minutes, or similar document in December indicating intention to adopt the Plan executed in December? 3 - Did the company fund benefits for 2016 and or file a 5500 for the 2016 year?

For what it's worth I agree with your research. Just tell your client you are experts in retirement plan law and IRC section 401(a)(9) requires the plan to process her RMD for 2019 before any rollover. Failure of the Plan to do so could result in Plan Disqualification which would put her whole rollover in jeopardy. Which it sounds like you already did. After that, tell her you are not experts in personal taxation and she should consult with qualified CPA or similar professional on matters of personal taxation and deductibility of charitable contributions. But that your understanding is that charitable contribution such as the one she is describing have to be from an IRA to get the treatment she wants and are not allowed directly from Qualified retirement plans. The charitable contribution as she describes is likely no different than any $10K check she writes to charity. Or as JstnERPA says, tell her to talk to her congress critters.

Process the RMD. Process the rollover. Tell her to discuss tax implications with her accountant. Unless you are also her accountant, in which case, good luck.

Disagree. If she retires in 2019 she has an RMD from the Plan for 2019 which is supposed to be the first monies taken from the Plan and that RMD piece is not eligible for rollover. My understanding is that the Plan should issue one 1099-R for the RMD and one for the balance of the Rollover with instructions to the participant to remove the RMD piece from the IRA as an excess IRA contribution that was not eligible for rollover. But as you say it is late on a Friday so my explanation may or not make logical sense.

Yes you lose the "get out of TH free card" so you need to satisfy TH minimum.