Lou S.

This is a good argument for restating upon plan termination. I really don't know the answer but if it was me I'd show it as a payable and $0 balance at 4/30/16.

1. If it is only NHCEs you can typically draft the amendment to to cover only effected individuals but it could be drafted such that it covers all similar employees. 2. Depends how the amendment is drafted. 3. If using SCP, no.

If their intention was to maximize the HCEs sounds like they did not choose the most efficient path. They simply could have given everyone a 3% SH Given a discretionary match not to exceed 4% of pay and not to match deferrals in excess of 6% of pay. Essentially a 4% match for the HCEs. Then given a cross tested PS and required gateway to top up the HCEs to where they wanted to be. It would have worked in the regulatory framework and been easier to do. I'm still pretty sure can't say "we are giving some folks the SH match and other the SHNEC." Did the VS plan submit for a letter based on this method? Also is it possible the TPA did it the way I describe but the client mistakenly deposited to the wrong sources with the custodian?

No. You do one or the other. You can do something close to what you want by doing a 3% safe harbor non-elective and a fixed of match of say 20% of the first 5% deferred. That way everyone gets the 3% safe harbor and those contributing at 5% would get the extra 1% which is where they would be under a safe harbor match.

We used to get waivers quite a bit back in the days before DFVC but with the programs available I'm not sure how lenient they are these days. If you are filing on 5/15 you are looking a possible $1,900 penalty if the IRS refuses to waive it. $25 x 76 days verse a $750 fee if small plan or $760 if large plan under DFVC $10 x 76 days. I'd present the option to the client explaining that they can file under DFVC for $750 and be done with it or they can file and request a waiver of the penalty when the IRS sends them a letter but there is no guarantee the IRS will waive late filing fees. Also you might want to let them know your cost for requesting the waiver and that might factor into their decision to just file under DFCV.

Just have the Plan Administrator reject it as an invalid QDRO.

Yes. Of the Sponsor terminating the plan.

I think it may be a bit more complicated but I too am going from memory. I believe you can disaggregate the groups for most testing but not 416 if they are in the same plan. However, I believe you can draft the plan such that the collectively bargained employees are excluded from the t-h minimum. I also believe you can only exclude them from the T-H minimum if there are no collectively bargained key-employees employees. All this is to say, I'm not sure but I do believe including the collectively bargained employees in the plan but not giving them the safe harbor contribution will blow your free pass T-H exemption on the plan. You could have a second plan that covered only the union employees but that is a separate issue that I t hink you are trying to avoid. But again I'm going on memory which seems to get worse every year.

Expensively amend the plan to bring in short service NHCEs and give them a QNEC?

Is he really only giving you 2 days to take a distribution? That isn't clear from the facts given so far. That's true, my assumption may be off. They may be hurriedly trying to close a plan before crossing a PYE to avoid and additional 5500 filing, I don't know. Or it could just be the dates on the notice as masteff suggests.

I've never heard of disaggregating a 401(k) test by group, division, location etc. inside a single 401(k) plan.

Is it one plan or does each company have it's own plan?

It is quite possible the prior employer kept the plan open until he determined if any final contributions were need for tax deduction reasons. As others have said, if no money was with held from your pay check then likely the only thing both employers are guilty of is poor communication. If this was an asset sale, and that seems likely in this case, the new employer would not even have authority to withhold 401(k) contributions without establishing a new plan and getting new deferral elections. As for the 2 days notice that is problematic as by law I believe they must give you 30 days before requiring a distribution.

Typically the Plan Sponsor(seller) is responsible for closing out the old plan and filing all required IRS forms, including Form 5500. The buyer might assume responsibility in the buy/sell agreement in some instances, but this is not usually the case in my experience.

My understanding is yes. A conversion is treated just like a contribution for the 5 year clock.

The plan did nothing wrong. The participant has taxable income for 2015. Heck since no payments were even made in 2014 the loan was probably in default back then and a 2014 1099-R should have been issued.

Yes plan needs to stay current with all applicable law including restatements. How is the 5500 being filed if the sponsor no longer around? Why on earth hasn't this plan been terminated if the sponsor is not around and only paying out benefits? Lastly is this a DC or DB plan? They have different restatement deadlines.

Restate with VCP seems like the safest, easiest course of action to recommend.

How does a deceased person change their mind? I'm assuming you mean the beneficiary took the distribution in cash. I'm pretty sure they can still rollover to an Inherited-IRA if they are in the 60 day window.

Seems like a simple amendments that states something like "All participant's actively employed on the date of the sale of __________ to ___________ shall be 100% vesting in their accounts." or something to that effect. but I am not a lawyer.

1) - I believe they can take the greater of (MRC15 + MRC16) or Max404(o)16 2) - They can increase benefits for 2016, just be careful not to run into a "pattern of abusive amendments"

No problem. Use the 2015 Form for both.

The DOL has a calculator where you can calculate lost earnings http://askebsa.dol.gov/VFCPCalculator/WebCalculator.aspx If it was me I'd write a letter to the employer and send it with some sort of tracking asking them to make all missed deposits within 30 days or you will be contacting the Department of Labor. Then if they don't make them, contact your local Department of Labor office. If they can't help you directly, they can point you in the right direction.

I image they want to give a one time immediate entry to the 401(k) feature for folks employed on 1/1/17 while keeping the year of service for the PS and having just one eligibility rule of 1 year of service for both thereafter.

If the plain language of the document says you credit service, then you credit service. If the document was drafted to say yeas of service at "D" prior to 1997 are credited, you would credit service for all years before 1997. If the document says employees of "G" hired in 1997 shall receive service credit for time at "D" prior to 1997 then that's how you apply it. At least that's my understanding but I am not a lawyer.