401king

IIRC The deferral election must have been in place by 12/31/2018 but the funding date is flexible.

Leave of Absence suspension of payments does not last forever. Only up to one year. Then at the end of the if he is still alive he will have to make up 1 year's worth of payments or else it will default.

Ignoring the fact that they may not have the cash to fund it (because that's a whole different can of worms), they can still fund the 2017 safe harbor with lost earnings and then re-distribute those funds to the employees. At this point, I would say the employer should eat the cost of those distributions since it is past the due date.

FYI Hardship does not mean that you do not pay taxes or penalties. A lot of folks seem to think taht Hardship means it is exempt, but really its purpose is to allow current employees a means of accessing 401k funds while employed.

The document may state how to use QNECs. For instance, ours states to only use them to the extent necessary to pass the ADP test. You are correct RE: Match source.

That makes perfect sense. Thank you.

A client's 401(k) Plan is undergoing an IRS audit and the auditor requests both an Allocation Schedule and a report of 401k contributions for each pay period. Anyone know the difference, or what exactly they're looking for in an allocation schedule?

No. Benefits cannot be reduced; removing True-Up is a reduction in benefits.

As tends to be the case, the facts are coming out slowly. The resolution to terminate the PSP was adopted in 2017. They believed it was terminated due to the adoption but there are still assets in the PSP Plan, which - they did not understand - must be distributed to terminate the Plan.

Company terminated PSP recently and wishes to put in a new 401(k) Plan in its stead. Does the 12-month rule apply to terminated PSPs in the same way that it applies to 401k Plans? That is, are they allowed to setup a 401k within 12 months of terminating a PSP?

Yes, as long as you're not decreasing anyone's safe harbor benefit. But you'll lose top-heavy exemption by having separate eligibility requirements.

Standard procedure when necessary.

Really it sounds like a two common problems - late contributions and a failure to withhold. These are not major problems as long as they are fixed. For the late contributions, calculate the lost earnings using VFCP. For the missed March deferrals, follow the prescribed correction methods set forth by the IRS and avoid penalties. The logistics of getting the money to the 401k or getting payroll fixed are another matter but I'm sure that can be figured out with some help from those providers. Step 1: Breathe Step 2: VFCP for February Step 3: Correct Failure to withhold deferrals for March. Just another day in small business 401k world, really.

Have you contacted the issuing party?

Administrators should not need to contact the lender; the participant providing an executed purchase contract should be sufficient. Repairs required due to unexpected damage are eligible; but, replacing an old roof because of wear & tear isn't.

But these are Safe Harbor non-elective contributions...

Exactly.

Are they not both Key HCEs because the attribution of ownership makes them both 10% owners for determination?

If he doesn't return the money would the proper next step be for the Sponsor to fund that $4k to the Plan (making it 'whole') or to re-run nondiscrimination testing with this owner receiving the extra $4k allocation? Or, both?

Are you certain that you're eligible for a distribution? If you're under age 59-1/2 and not "terminated' then chances are your money is stuck in the Plan anyway.

Thank you, Belgarath. Ours is a pre-approved VS (DATAIR) and provides only a spot to enter the company name, but not a "service from [DATE]" option. Ideally the best option is to edit the "Credit Service" section where the companies would otherwise be listed to add fields for EIN, Credit From [DATE], and Credit Through [Date]. But that assumes that crediting from/to certain dates is allowable.

Is it permissible to include service within a specified period of time from a predecessor employer? For instance, only service completed since a certain date, or through a specific date? In what is a unique scenario for our firm, we have a Plan where the Sponsor is a group of various health practices which have banded together to form one large corporation, where each "original" practice now owns a piece of this new company. When we originally established the Plan we credited all service from each predecessor employer, because those practices no longer employed the Larger group's employees, and these practices wanted the employees to become eligible based on their service with their practice. A new practice is joining the Group. For administrative reasons, we wish to exclude service with that employer prior to a certain date (1/1/2017, for example). This is to save us/the Sponsor from having to review whether or not any of the 500+ employees worked for this new practice at any time since its inception (30+ years). We wouldn't want to recognize all years, having the unintended side effect of resulting in an employee of another practice becoming eligible (and costing that practice owner the Profit Sharing contribution). At the same time, we don't want to ignore all service with the new group, preventing them from becoming eligible for the new plan. So, can we recognize / credit service from a predecessor employer during a specified period of time?

Only if the document has been amended, correct?

Why would the client prepare a 1099-R for themselves when you prepare 1099-R for the Plan on any other distribution? I would stick to business as normal and prepare the 1099-R. If none is produced? Sounds like a pretty big Plan-related problem.

Someone has a $60k balance and borrows $30k, then pays it off one month later. The 10 months later they request a new loan. What is their maximum? $20k. So the $50k limit can come into play with balances less than $100k.