pixmax

Owner over age 50 defers $6,500 and receives a Profit Sharing contribution of $61,000. Does the $6,500 get testing for ADP?

Paychex set up a non profit 401k plan. No employer money, no loans etc. Can they terminate the 401k and start a Non ERISA 403b?

If you are in the New England area, I would be interested in talking with you.

I agree, but in my mind it doesn't seem fair that they are not allowing the other groups of NHCE's to participate.

I have a control group of 10 companies, 1 plan that is excluding 9 companies and all Highly Compensated Employees. Am I correct that at least 70% of NHCE's need to be eligible to pass 410b? If company the total of all of companies NHCE's is 100 and only 7 are allowed to participate doesn't this fail?

Yes, Company D. Company D owner of 35% (owner 3) has signed a Income Interest Repurchase Agreement. I am not aware of a 83b election. Should owner 3 sell his vested percent, the Balance of his interest is forfeited and purchased back by the Company (D). The Same agreement is in place for the additional 5% owners of Company D.

I am trying to verify control group, no family attribution. Company A - has owner 1 and 2 owning 50% each Company B - has same two owners and ownership % Company C - has same two owners and ownership % Company D - has the same two owners above owning 27.5% each. Owner 3 has 35% and Owner 4 and 5 each own 5% each The two owners only receive compensation from Company A but of course are officers of all. I was provided an income interest repurchase agreement from Company 4 which states Owner 3 (35%) has the right to sell his vested portion (there is a vesting schedule and he is currently 0% vested), but it must be sold back to the company. I feel Company D is part of the control group, based on that Owner 1 and 2 have option to repurchase. The client feels differently and instead of seeking Legal Counsel per my request they have asked their Accountant to review. The Accountant is telling them that their is no attribution because Owners 1 and 2 are not family. Am I missing something? Thoughts?

I just picked up a 403b Document for a Tax Exempt entity that excludes employees who work less than 36 hours per week, with a 24 month waiting period (Elapse Time) and a 3 year cliff vesting schedule. Does this sound right? For deferrals this would not meet Universal Availability Requirement. As for the Match, If someone has been there for 24 months and has worked 1000 hours within a 12 month period wouldn't they be eligible? Lastly, with a 2 year wait can they have a vesting schedule?

I would refer to thhttps://www.irs.gov/retirement-plans/401k-plan-fix-it-guide IRS 401k fix it guide.

I found the courses provided through NIPA, National Institute of Pension Administrators work great for my employees.

Plan is Safe Harbor match with a discretionary match and after tax option. If the plan does not put in a discretionary match and employees decide to put in a 4% after tax contribution, does this need to be tested under ACP or can it be avoided?

I am proposing on a plan with St. Thomas Employees. The client is a control group with 1 Company in the US and 2 companies in St. Thomas. They have a 401(k)/SHBM plan and have allowed the St. Thomas employees to adopt the plan. In order to receive certain tax deductions the client must provide a Contribution to the St. Thomas employees and would treat this as a PS contribution. My thought is to separate the plans as long as coverage tests pass as the owner wants to max out his contribution. Any thoughts? Has anyone worked on a plan with St. Thomas employees?

Thanks, just wanted to make sure I had prepared it correctly.

Yes they are both SHNE 3%, not SH match. No Profit Sharing just meant it's discretionary and decided not to fund this year. Question, I understand SHNE is a nonelective contribution, can I test that under 410 other with the Profit Sharing and not alone. I was preparing 4 - 410b tests. 401k, match, SHNE, PS

Looking for guidance or clarification. I have 4 groups with individual plans, they are controlled and no employees overlap. 410b passes for all sources but one group does not pass 410b for PS. Nondiscriminatory Classification passes so I go onto the ABT. As I do not administer all of the groups, I do take care of the coverage testing. 2 of the groups are also now SH and are no longer putting in PS. A - 401k, Disc Match, New Comp PS Benefitting 40 HCE 225 NHCE B - 401k, SHNE No PS, if Benefitted 5 HCE 82 NHCE C- 401K, SHNE PS Benefitting 4 HCE 55 NHCE D - 401k, Disc Match No PS, if Benefitted 3 HCE 16 NHCE The Plan passes AVBT when all are tested together. I just want to make sure that I am doing it correctly by testing them all together even if they are not putting in the PS Contribution.

Eligibility is 6 months with monthly entry.

Client has a 6/30 plan year. As of 1/1/17 ownership will slightly change and they will be closing their facility as of 12/31/16, as it is being moved to another state. Most of the employees will not be relocating and are terminating. Of course this will warrant a partial plan termination. During this time, the client has hired new employees who are from the state in which the new facility will be for training purposes. Client would like to put in a final Profit Sharing Contribution only to those who are part of the original facility and vest them 100%. My thought is to have a short plan year but since the eligibility is 6 months/monthly entry, those who were hired before 7/1 will be eligible. Is there a way we can exclude them? The plan is safe harbor with new comparability.

I have an owner of the company who withdrew $70,000 from a pooled profit sharing account in 2015, no 1099 was prepared and no taxes were withheld. The plan does not allow for inservice withdrawals. The owner is over 59 1/2 and he has enough in his account to take the distribution. Can this be self corrected since it is before the end of the 2nd plan year? What are his options? Insignificant? Significant? He would like to return $50,000 to the plan and pay the remaining amount in installments. He does not want the CPA to prepare a 1099 for 2015 and pay taxes, penalties. There is one other person in the plan and the Owner has maxed out on his loans.

So, if I have 3 plans ending 6/30/16 and the other plan ended 12/31/2015. I would use 1/1/2015-12/31/2015 compensation for the plan that does not have the same plan year? These would both be considered 2015 Plan Year. Or do I use 12/31/16 compensation? Plan years ending in the same plan year.

We actually don't want to aggregate and have to perform the AVBT. One of the plans changed to a safe harbor provision without consulting us. They are with another TPA.

We work on a plan that is a controlled group. Out of the 3 groups we administer two and another TPA takes care of the 3rd Plan. Not a problem, however they acquired another group (4) that has a different Plan Year. We are contracted to take care of the coverage testing for all 4 groups. How do we handle the off calendar plan?

I feel the prior TPA gave them misguided information as they prepared the allocation for them. I feel the plan year should have been a short plan year 1/14-1/30/14 and then moved to a plan year that matched their fiscal year. 2/1/14-1/31/15. Thank you for your insight and I will read more on this.

I finally received a copy of the signed plan document. The Plan is effective 1/1/14 as a safe harbor maybe and signed 11/26/2013. The clients fiscal year is 1/31.

Thank you Austin. Mike I'm not offended and have no problem poking the bear. I've done the research and understand the tax deduction. My concern is that this was a start up plan effective 1/1/2014, I'm just trying to figure out if using prior year compensation before the plan is effective is allowed to allocate contributions. The Plan certainly does not state this fact. Once I get the exact sign date of the document I will come back and get more insight. I thank you and appreciate this board discussion. I don't use the message Board often but sometimes I need to brainstorm with others to gather all of my thoughts.

I understand the 25% limit based on tax-year compensation. I'm assuming that if they signed the Plan Doc prior to 1/31/14, then they could take a 25% deduction based on compensation from 2/1/13-1/31/14. However all compliance tests would be based on plan year compensation (1/1/14-12/31/14) correct? I haven't heard back from the client on date of document signed, I am just trying to be prepared for the conversation. My initial suggestion is to amend the Plan Year to follow with the fiscal year.