SMB

I am considering installing a cross-tested Money Purchase Pension Plan for a small employer (an "older" owner and 3 "younger" ees). Plan will have an end-of-year employment requirement, so that contribution is not "accrued" until last day of PY. Plan will initially have a contribution formula of 25% to owner and 8% to ees. Anticipate that the contribution formula may need to be amended "occasionally", depending on revenue and/or changes in ees for a particular PY. Although other threads have indicated that the IRS does not "like" frequent changes to a MPPP contribution formula, is there any statutory prohibition against same? Has anyone had any actual experience with the IRS in this regard?

Am I correct in my understanding that interest on a participant loan to an HCE is never deductible - even if loan is secured by the HCE's home?

Sole-proprietor currently sponsors SEP (via model Form 5305-SEP). Wants to adopt paired MP & PS Plans for 1999. Glitch - has already partially funded SEP for 1999. Rather than transfer SEP to a prototype (to allow a companion QRP) and coordinate the "discretionary" contributionn between the SEP and the PSP for 1999, can client request a refund of his 1999 SEP contribution (plus income) in order to, in effect, "un-do" the SEP contribution?

Employer sponsors a 401(k) Plan with a match of 50% on deferrals up to 3% of compensation. Employees are classified as either "office" or "field". In an effort to avoid unionization of the "field" employees, employer has agreed to give each "field" employee an annual "bonus" equal to 3% of pay - reduced by any match for "field" ees participating in the 401(k) - to be deposited directly into an IRA in the employee's name. Not my client (nor am I getting involved other than this posting!), but was curious as to any comments our learned readers might have...

Any prohibition against using cross-tested class allocations in both paired MPP & PSP (e.g., MPP = 10% to HCEs, 3% to NHCEs ; PSP 15% to HCEs, minimum % to NHCEs to "pass")? I have a situation where I need paired plans to get the owners (2) to their maximum annual additions.