401king

Ah, but they are not the only ones doing something like this. A certain insurance company that I know if will not transfer loans when a plan moves to a new record keeper because the loans are made from insurance company assets. We found this out the hard way after taking over a plan from (un)said insurance company. The loan payments had gone to their new 401k accounts for a few months before the participants began receiving "Overdue" notices from insurance company. I'm still surprised the DOL allows it.

Have you contacted the administrator to determine their requirements? Are you certain that the Plan allows Hardship Distributions?

It's possible that the institution's statements don't meet the quarterly delivery requirements, in which case you would need to send your own statements to meet the requirements.

This is the perfect question to ask your TPA or admin company that works with the institution holding you funds (assuming there is one).

I assume the concern is that he may be making contributions at the new company which may be considered catch-up contributions for the new company's ADP test. While I don't know what you would do if that were the situation, he is a new employee there so he (most likely) is an NHCE so he would not be making catch-up contributions there.

We view the suspension the same way as ceasing deferrals. The compensation is still eligible.

They are marketing this with a term that we normally relate to Uni-K. But they even state that 5500-SF is required if a non-spouse relative participates.

What notice? These statements seem contradictory? We disclose the IRA Custodian's fees (setup and/or recurring) on the 30-day notice to the participant that their account may be forced out to an automatic IRA. The custodian's fees may have an impact on the participant's decision (or lack thereof). The part we leave out of the notice is our normal distribution fee because that has already been disclosed in the SPD.

We disclose just the auto-IRA fees on the notice. Based on the SPD disclosing the distribution processing fee, and assuming the participant has received that, we chose to leave that part out of the auto-IRA notice.

Presumably you're each contributing after-tax. You should definitely be converting these to Roth, assuming you don't' have some older IRAs lying around. And for what it's worth, saving $10k and getting a nearly 100% Match - $19k altogether, is far better than some scenarios I have seen. Just try to put yourself in their shoes - for you to save an additional $8000 I may cost them far more than $8000. And your net gain from saving $8000? About $4000. The math just doesnt check out.

Well, now I'm intrigued. What exactly would you do here?

If it's a discretionary match I see no problem with it. If it's safe harbor then you're out of luck for retro amendments.

Are you referring about a brand new plan for 2015? If it's a current plan for 2014 then it's already too late to amend. If it's a current plan and you're talking about amending for 2015, and the notice (already distributed) included bonuses, then it's too late to amend.

In my opinion, there is a difference between True-Up and a Correction, and I would view your situation with the owners as a Correction because the formula wasn't being accurately applied during the year (and nor could it have been). True-up is a plan provision, normally, and should be in the document as a Yes or No. Corrections are a separate in definition, but similar in process. If you find a match formula was improperly applied during the year then it needs to be corrected for all participants. Corrections are not optional; not a provision. This is what I recall reading years back in the ASPPA books and have stuck with it as our policy.

If the owners' matching contributions are made without respect to their actual compensation, then a true-up is required for them, but it's more of a correction due to an improper calculation (since you didn't have the actual comp). In my understanding, if you have to correct for one, then you correct for all. In essence, it's a true-up and it's for everyone. It may be semantics but I see this as more of a correction.

I think I'm right in believing that after-tax contributions are only for those employee deferrals above the 402(g) limit; an individual cannot have contributions greater than the 415 limit.

One big piece of the puzzle that might change your mind: After-tax contributions are subject to taxes on the gains, just like an after-tax IRA. You'd have to track the cost-basis.

Do you mean late, as in after the 12/31 Safe Harbor Deposit deadline? Or late as in after their tax return? If deposited after their tax return they just have to account for the 25% deductibility limit, assuming it's still deposited before the true deadline of 12/31.

We've taken the firm stance, based on prior Q&A, that we will only amend for Roth, loan and hardships. Originally we thought it was okay if it wouldn't change the safe harbor notice, but have taken a more conservative approach since, based on the IRS' stance.

50% only required at the time of the loan (otherwise you'd have issues when the market falls after a loan). It's common for us to have a participant take a full loan from, say, Match source, then a hardship from their available deferrals.

What Lou is saying is that the plan can salvage its safe harbor status for 2014 if you don't terminate in 2014. Has a resolution already been adopted to terminate? If not, terminate 1/1/2015; then there's no ADP test to worry about for 2014.

Thank you for the answer, Belegarath.

Parents are over age 70.5 and still work for the company. Their son owns 100% of the company. I cannot find any reference to family attribution rules, or mentions of Key employees, in the RMD chapter for 401(a)(9) http://www.irs.gov/pub/irs-tege/epchd603.pdf. In Section 416, the definition of a 5-Percent Owner does not mention attribution (http://www.law.cornell.edu/uscode/text/26/416). You would use attribution to determine who is a Key Employee, based on ownership, but this does not seem to relate to RMD. I read previous posts that say the family attribution rules still apply, but I can't find a source on that. Anyone have something I can show to the client proving they are/aren't subject to the RMD exemption for Non-5%-Owners. Section 416 (B) Percentage owners (i) 5-percent owner For purposes of this paragraph, the term “5-percent owner” means— (I) if the employer is a corporation, any person who owns (or is considered as owning within the meaning of section 318) more than 5 percent of the outstanding stock of the corporation or stock possessing more than 5 percent of the total combined voting power of all stock of the corporation, or (II) if the employer is not a corporation, any person who owns more than 5 percent of the capital or profits interest in the employer.

Is there a part of this formula that does not meet the ACP Test Safe Harbor contribution formula, thereby receiving a 'free pass' on the ACP test? The formula does not exceed 6% of compensation; allocation is not greater than 4% of compensation (max is 2%). I do not believe there are escalator caveats in the ACP Test contribution, but have not had to look that up before.

First option is not possible. The second option is (and may be preferred because it's vested), you just need to run top-heavy test. You'll probably already be meeting TH requirements with the 3% safe harbor contribution.