cpc0506

Can a plan that had a J&S option remove that options from its provisions? Plan number is 002, but the only money in the plan right now is Profit Sharing, Salary Deferrl and match.

What about the two different tiers of match for the NHCEs based on company? Is this a concern?

Company A, Company B and Company C are a controlled group as Company A owns 100% of Company B and Company C. Client would like to off the following: 1. 401(k) to all employees of companies A, B, C 2. One tier of Match to only all NHCE employees of Company A, another tier of Match to only NHCE employees of Company B and nothing to Company C. Will this work? We should pass coverage on the match since coverage is automatically satisfied if NO HCEs are allowed to participate. Is my reasoning correct? What am I missing? Thanks.

Family Trust X is the majority owner of Company A. (We have asked for exact ownership.) Family Trust X is also 19.5% owner of Company B. (We have asked for remaining ownership information.) My question is: how is a trust handled when determining if a Control Group exists?

Let me ask the question another way. The client has a non-standardized prototype plan that is on the Sungard Corbel platform, which is the same document platform we use. The client does not want to restate the document until the next required restatement period. In the meantime, if the client wants to amend the plan for any reason, or if there are interim amendments that need to be adopted, can we make these changes since the document platforms are the same?

The old TPA has told us that they will no longer sponsor the document for a client who has left their service.

Document/Adoption Agreement was drafted by prior TPA. It was on a non-standarized 401(k) prototype. I have two questions: 1. Client comes to us, the new TPA, to administer the plan. I would suggest the plan be restated onto our prototype document. Client wants to wait until the new restatement that will be required in 2014. What does this do to their document? I believe it is now an Individually Designed Plan. Does that mean they need to apply for a determination letter? 2. Adoption Agreement lists the client as an Corporation. Client tells us that their business entity is an PLLC. Should the AA be corrected?

Can one use gross compensation for Salary deferral purposes and a different defintion of compensation that excludes overtime and bonuses and commissions as the basis for the safe harbor match?

Chose a date that the plan will end. Use compensation to that date to determine top heavy minimum due.

Now I learned that the two HCE's in my test are 2% owners (so they would be considered key under the 1% owner with comp greater than the limit rule). But the top paid group election still only looks at HCE's due to comp and 5% owners, right? It does not look at 1% owners?

That is the HCE for 2011. There are no new owners in 2012 so I have the same three employees

Interesting... I haven't found a reference, but I've always thought that the top 20% was always the next highest percent, and that's what I've been doing. So in your case, it would be 3 in the top paid group. Sal Tripoli states in the EOB that you can round up or down, you just have to be consistent.

The greater than 5% owner made more money than the other two HCEs.

Client has 11 employees and utilizes top paid group election. Top paid election would be 2 (rounding down) which is what the Relius system is showing. There are three HCEs. One is a greater than 5% owner and the other two are HCEs based on compensation. Plan uses prior year testing. My question: The Relius system is showing all three in the top of the ADP Test even though there is a top paid election in plan. Can anyone tell me why this is happening?

There is a difference between 6 consecutive months of service and 6 months of service. The Adoption Agreement states 6 months of service.

Dental Practice B is still being called that. It has not taken on the name of Dental Practice A. The employees are still employed by Hollymead. Dental Practice B still has its own EIN. Does that make a differnce.

Dental Practice A purchases another dental practice B in 2011. Dental Practice A established a 401(k) plan in 2010. Dental Practice B does not have a 401(k) Plan. Dental Practice A does not amend its plan to indicate that there is a controlled group and as such does not cover Dental Practice B in 2011 or 2012. Now Dental Practice A wants to amend the plan to allow for the other Practice to join the plan. I know that due to transition rules, Dental Practice A's plan is deemed to pass coverage during the transition period. I also know that the plan which is eligible for the coverage transition rule must still satisfy the ADP and ACP Tests. What I am not sure of is if employees of Dental Practice B are included in the ADP and ACP Tests for Dental Practice A with 0% or are excluded from the test altogether. Please advise.

The adoption agreement is 6 months of service, not 6 consecutive months of service. So his entry date should be his rehire date of 1/25/12.

Plan document's eligibility is 6 months of service. Entry is 1/1 and 7/1 Employee A has has following employrment history: 1. hired 1/7/2008 2. terminates 3/31/2008 3. rehired 6/9/2008 4. terminates again 9/28/2008 5. rehired 1/25/2012 6. terminated 6/22/2012 Has this person met the eligibilty requirements for the plan? I don't believe so, but the software system is giving him an entry date of 1/1/12. Any thoughts...

Amendment to change top paid group status must be adopted before the plan year ends.

Employer A is a Dentist’s Office which acquired another dental practice, Employer B in 2011. They are being operated as two separate businesses. It is now 2013 and Employer A has learned that he needs to either cover Employer B or run the risk of failing coverage. Now Employer A would like to add a safe harbor plan ASAP. Employer A currently has a calendar year 401k plan. Are there any options to get a safe harbor plan sooner than 2014? From my research, in the 2012 EOB, page 11.557 states that an employer might consider changing its plan year for the plan and start using safe harbor for the first 12-month plan year that starts after the amendment. Has anyone done this? What are the consequences/pitfalls of doing this?

I have a new start up plan that was profit sharing only for 2012 and added salary deferral with ACA effective 1/1/13. Document was signed 12/20/12. We learned today that there have been no enrollment meetings as the open platform alliance and advisor have dropped the ball. The client would like to change the document to have the ACA and deferral be effective 4/1/13. Can this be done? If no change is made to the document, how does the 'brief period of exclusion provision' apply to this plan?

Why do you think that making a change to the plan provisions results in 'not safe harbor' for 2013? Is this because you are not allowed to amend a safe harbor plan mid year? The plan is not safe harbor yet.....

A plan provided a safe harbor maybe notice for 2013. Can the plan make changes, such as add a loan provision and addtional hardship withdrawals mid year? The plan document does not currently allow for safe harbor. It would need to be amended by December 1, 2013 if it elects to be save harbor for 2013. I know that current safe harbor plans do not allow for mid year amendments, but does this follow for safe harbor maybes?

What do you mean by 'seasoned' money? Does that include earnings or just contributions? Also, the plan is a KSOP. So I would think that the only funds available for purchase of the policy would be everything except the compnay stock 'owned' by the partcipant. Also in your first response to me, you stated "The plan would write a check to the participant for the fair market value of the policy." Do you mean that they would write a check to the employer as the employer holds the policy for the participant?