mphs77

What does the Plan document say, prior year testing or current year testing?

Are you sure they can legally sponsor a 401(k) Plan as you have described?

Is the seller one of the employees who are to receive the $2,500,000 in accrued benefits? If so, how much? Will the benefits going t other Employees exceed the taxes that would have been paid if the transaction was completely cash? Inquiring minds want to know.

Is there any safe harbor contribution which can be made that excludes ACP testing for a Plan which is allowing voluntary after-tax employee contributions? We have an Employer who is making a 3% Safe Harbor non-elective contribution (applied only for ADP purposes) with an HCE making such a voluntary after-tax contribution and it is causing an issue with the potential ACP test. Thanks ahead of time for any guidance you can provide.

Of course, in my much younger days, I believed the quote to be... "I drink, therefore I am...."

Are they passing coverage and non-discrimination testing while excluding non-adopting "members"?

In addendum, a line I have heard all my life.... "I'm from Texas, where we elect our crooks to high office so someone will keep an eye on them."

One thing to note are there minor children involved? If so, the ex spouse could still be considered an HCE during the time the child is a mnor.

When QDROs first came on the scene, I had a plan with a participant who's QDRO was based on a court order. This court order held that the ex-spouse was due 50% of the account balance as of a particular date and the children of the marriage were due the other 50%. So I have seen it happen. For item 2, I would think any difference between the QDRO and the Judgment for Divorce would be another lawsuit waiting to happen.

Disagree here. Since loans can be funded only from deferrals (at least that's how I read the set up), the loan was from the deferral account so of their 10,000 in deferrals they have already received $6,000 of it (remember no gains), leaving only $4,000 left for the hardship.

Sounds like someone is in serious need of some medication..... I just don't know if it is the "Poj" or myself.

I stand corrected. I guess my memory is not what it used to be......due to too many beer nights myself I am sure!

It was not Ten Cent Beer Night in Cleveland on that fateful night in 1974 (against the Texas Rangers) it was Nickel Beer night. And the rest was history......

I believe the Section 179 deduction only applies to General Partners.

I would be tempted to ask if there is a partnership agreement as to the allocation of pension costs for the year.

I am curious as to how a Plan is a PBGC filer and eligible to file a 5500-EZ. Can you elaborate please?

ESOP Guy, You are already a big leaguer. A solid utility infielder, which in modern day baseball, would make you about $6 million per year.

Just remember that all of us who post are not heavy hitters, just that all the heavy hitters post here! I myself try to keep up my average to the vaunted "Mendoza Line".

I don't believe so

If you want to avoid annoying....you are in the wrong business.

If I remember correctly, as it is a Match, it only has to pass the ACP testing for it to be allowable. I had a client many years ago (pre-2000) with such a matching formula, but with about 4 different groups whose match was depending on service

How is it not a continuation of the same trade or business? Did the owner cease to be say a lawyer and become a plumber? Without more information I have to assume (a dangerous thing) they are working in the same filed as before. Therefore it is a continuation of the same trade. I could easily be wrong here, but stop and think...if all it took to gain back large benefits in a Plan, then all small businesses would have terminated their Plans in 1983 after TEFRA kinked in to lower the 415 limit and start a new company and new benefits and I don't recall that happening.

I am not sure that both entities must still be active for the controlled group issue to be settled. But lets look at the possible "predecessor employer" possibility. How would it not be a continuation of all or a portion of the trade or business of the former entity and thus a the new business is a successor entity? Thus the prior plan, while not maintained, would still be considered for 415 maximum purposes. You do agree that as per 1.415(f)-1(a)(1) requires that even a terminated plan, from which benefits have been paid, must be considered when determining whether or not 415 limits have been exceeded?

Bel, I think you need to look at the Controlled Group rules for that info. And as I recall the threshold for 415 limitation is only 50%

I do not know what area of the country you are in, but I would hazard to say any Third Party Administrative firm would provide you adequate service. Look for that kind of firm, not a business of another focus that also provides TPA services as a "benefit to our clients".