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Is there any information on the option of processing an in-plan Roth rollover, when the election is Roth but the deduction/remittance was Pre-Tax? That seems similar but simpler than the plan sponsor adding the amount to the participant's compensation, because if treated as additional compensation, that would need to be added to compensation, but not subject to FICA tax. So it would require a special deduction code on payroll, or a negative 401k deduction, which would alter the participant's current year YTD deferrals. Or a 1099 would have to be issued. I can't find anything on this, but would love to use that option when correcting, if available.

Historically we have coded documents as "Discretionary Match", and have left the formula section blank. We then have the client execute a "resolution" or "minutes" declaring or defining the plan's match formula and time period (true up or no true up). The resolution states that this declared match formula will continue until changed or suspended with a more recent resolution. Any opinion on whether this process would satisfy the "Rigid Discretionary Match" requirement, so long as it is apply universally for that year? Thanks Alan

Per this discussion, what if Company A sponsors a Simple and Company B sponsors a QACA. In mid plan year (3/2017) Company A acquires Company B (stock purchase) can Company A terminate or freeze the simple and take sponsorship of Company B's QACA plan, or would they need to run separate plans until 12/31/2017? Additional info: At time of merger the total eligible participants would then exceed the allowable number of eligible employees for a Simple.

I've got a client that is in the process of acquiring two entities but doesn't want to wait until year end to merge. Facts: Unrelated Company A acquires Companies B & C (also both unrelated to A and unrelated to each other). All run calendar year plans. A wants to merge both into A as of 5/1/15. A is a traditional 401k plan B is a traditional 401k plan C is a safe harbor match plan Does B test it's plan from 1/1 - 3/31? Does A include B's participant contributions from 4/1 to 12/31 or full year? Does C lose the safe harbor test exemption for contributions made from 1/1 - 3/31 Does A include C's participant contributions from 4/1 to 12/31 or full year? Also if A's plan allows for predecessor service with B & C for eligibility and vesting, how does A treat B and C's HCE's in the first year (2015) they are in A's plan? Lastly, Assume the following: B's plan had a 3 month wait and A's had a 12 month wait. A's plan allows for predecessor service with B for elig and vesting Sam is a participant in B's plan with 8 months of service. With these assumptions, even with predecessor service Sam has not met the waiting period for A's plan. But because Sam was already eligible for B, does he become eligible for A's plan immediately or can A require him to meet the waiting period for A's plan before Sam can enroll? I'd appreciate any input you might have.

Similar circumstances above but the acquiring company doesn't want to wait until year end to merge. Facts: Unrelated Company A acquires Companies B & C (also both unrelated to A and unrelated to each other). All run calendar year plans. A wants to merge both into A as of 5/1/15. A is a traditional 401k plan B is a traditional 401k plan C is a safe harbor match plan Does B test it's plan from 1/1 - 3/31? Does A include B's participant contributions from 4/1 to 12/31 or full year? Does C lose the safe harbor test exemption for contributions made from 1/1 - 3/31 Does A include C's participant contributions from 4/1 to 12/31 or full year? Also if A's plan allows for predecessor service with B & C for eligibility and vesting, how does A treat B and C's HCE's in the first year (2015) they are in A's plan? Lastly, Assume the following: B's plan had a 3 month wait and A's had a 12 month wait. A's plan allows for predecessor service with B for elig and vesting Sam is a participant in B's plan with 8 months of service. With these assumptions, even with predecessor service Sam has not met the waiting period for A's plan. But because Sam was already eligible for B, does he become eligible for A's plan immediately or can A require him to meet the waiting period for A's plan before Sam can enroll?

I agree that waiting until the annv date is best, but I'm curious as to the answer if the employer doesn't or can't wait until annv to merge. Facts: Unrelated Company A acquires Company B. Both run calendar year plans. A wants to merge B into A as of 4/1/15. Does B test it's plan from 1/1 - 3/31? Does A include B's participant contributions from 4/1 to 12/31 or full year? Also if A's plan allows for predecessor service with B, for eligibility and vesting, how does A treat B's HCE's in the first year (2015) they are in A's plan? Lastly, Assume the following: B's plan had a 3 month wait and A's had a 12 month wait. A's plan allows for predecessor service with B for elig and vesting Sam is a participant in B's plan with 8 months of service. Even with predecessor service, Sam has not met the waiting period for A's plan. But because Sam was already eligible for B, does he become eligible for A's plan immediately or can A require him to meet the waiting period for A's plan?

What if they had incurred 5 consecutive one-year breaks in service then would the participant lose vesting or vesting and eligibility? In other words does a participant that incurs 5 consec one year breaks have to start over on eligibility, if rehired or are they immediately eligible to participate but simply have to start the vesting process over (only on contributions made after rehire)? For example, an employee works 5 years and is 80% vested under a 6 year graded vesting schedule. They then incur 5 one year breaks and the are hired back in the 6th year. I know that they are 80% vested in their prior balance but forfeit the 20% but are they eligible to participate immediately upon rehire (assuming plan has 1 year, 1,000 hour elig condition) or do they have to meet the elig conditions again?

Ok, Can someone confirm or deny the following: Assume I'm an S-Corp owner and I receive $50,000 in W-2 wages and then I also take an additional $50,000 in taxable shareholder distributions then it is my understanding that I can defer up to the max (2009 $16,500 or $22,000) from my W-2 income and then I can also make a profit sharing contribution equal to 25% of K1 income.

Let me correct my initial statement, they did not amend the plan for a zero match instead the plan doc has always been coded for a "Discretionary Match". The plan sponsor declared, in a board resolution, a zero match for 2009 so they could declare a new match formula via a new resolution. I guess my real question is, if they declare a match formula then does it need to be a certain percentage of deferral or is it the plan sponsor's choice? And does it need to be unlimited cap on match to insure that all current forfeitures are allocated? Thanks for your assistance!

I have a plan that stopped employer matching (amended the plan's match formula to zero) effective 1/1/2009. There are 2008 match forfeitures in the trust's cash account and the plan document is coded for match forfeitures to pay plan expenses and/or reduce future match contributions. I understand that a plan cannot carry forward forfeitures and instead must be used up, so my question is: How should the forfeitures be allocated in a plan that has a zero match formula? Should the plan sponsor select a percentage of deferral with no cap to allow all forfeitures to be used or is there a regulation that specify a formula?