EBDI

Thanks for all of your helpful responses. I ran the numbers both ways using 2014 comp as an example and of course the NHCE's benefited better under the old formula.

Would the answer change if there wasn't an employer contribution in the prior year? In this case, they did not make a profit share contribution nor a match in 2014.

Why would each NHCE receive 6.3% under the old formula? Wouldn't it be 5.7%? None of the NHCE's will exceed the SSTWB.

The current allocation condition is 1000 hours, no last day requirement. So anyone who has worked 1000 hours, can't have a contribution for 2015 below 5.7%, correct?

This plan is a 401k (not a safe harbor). The plan document is being restated in July 2015 and the plan sponsor wants to change from an Integrated profit sharing contribution to a New Comparability contribution effective 1/1/2015. Would this cut back the participant's benefits and rights? I read that the new formula needs to be equal to or better than the original allocation when amending back to the first of the current year. The plan sponsor did not make an employer contribution in the prior year. Would the employees need to receive at least 5.7% since that was the integrated formula?

I have used Save Daily.

I would be interested in knowing whether you succeed in convincing the DOL investigator that the contribution was deposited timely.

401k plan is subject to QJSA. A former employee wants to take a distribution. His account balance is $4,000, but he has an outstanding loan balance of $3,000. Since the amount of cash he will get is under $5,000, do I need to get spousal consent? Do I include the amount of the outstanding loan balance in determining whether his balance is over $5,000?

Does the universal availability also carry over to the 401k plan if the 403b plan is a non ERISA 403b plan?

Couldn't both the 401k and 403b have a 1 year/1000 hours eligibility?

They did make an employer match at the same time they deposited the employee deferrals. Thank you so much for your advise. I will treat it as an employer profit share for 2013.

Should I have the mistaken Jan. deposit forfeited since it can't be returned?

The funds are still there because he did not realize he had deposited it twice until I discovered it this week. Thanks for your opinion. That is what I thought too.

Plan Sponsor of a calendar year 401k plan deposits employee deferrals from the Dec. 2012 payroll once in Dec. 2012 and then again in Jan. 2013. In March 2013, he fails to deposit the employee deferrals which still haven't been paid. When determining the lost earnings, can I calculate it on the net amount due after subtracting the duplicate Dec. 2012 deposit from the missing March 2013 deposit? Would it be preferable to calculate the lost earnings on the entire amount that should have been deposited in March 2013?

Lou, you are so right! I meant to type Owner C has 48%. Thanks to both of you.

I believe these two LLC's are a control group. Owner A and Owner B each own 50% of LLC #1. Owner A owns 26% of LLC #2 and Owner B also owns 26% of LLC #2. Owner C owns 49% of LLC #2. None of the owners are related. There are 5 or fewer individuals who own 80% or more of LLC #1 and 5 or fewer who own more than 50% of LLC #2. This would be a brother sister control group, correct? LLC #1 has a safe harbor non elective 401k plan. LLC #2 does not have a retirement plan. LLC #2 has one employee. I have read that a safe harbor plan and a non safe harbor plan cannot be aggregated for testing. How about a safe harbor plan and no retirement plan situation? Do I have to include the employee of LLC #2 if she met eligibility in the 410B coverage testing?

Thanks for the input. Excellent suggestion to make sure the participants sign acknowledging that they have the option for twice a month deferrals, but they are okay with once a month deferrals. Also explaining the burden to the employer to do it twice a month.

I also have a plan sponsor that wants to restrict participant deferrals to the last payroll of the month. Their plan is a safe harbor non elective. Would this cause problems with a safe harbor plan? It is a small group of 5 employees (3 HCE's) and all are okay with deferring from one payroll a month instead of 2.

The more I think about it, I agree they should not be included. Thanks for the reply.

They are well over 100 employees and do have an audit. I am trying to get it right to avoid having the auditor call me on it!

They were not included in the ADP test because they did not have any compensation. I wasn't sure if for the same reason they would not be included in the active count for the 5500. Also, including them would not impact the ADP test as the ADP test always passes. This is a non profit with no HCE.

This is a 401k plan that allows immediate eligibility for 401k deferrals and a 1 year wait for the employer profit share. Two employees were hired in Dec. 2012 and received their first compensation in Jan. 2013. For the 2012 form 5500 are they considered active participants since they are eligible, even though they could not have deferred due no compensation received? I think they are included as active participants, but the software I use is not including them.

That is correct, he would receive the value from the prior year, which isn't fair to the others in a down market and not fair to him in an upswing. Have you looked into amending the plan document to restrict distributions to once a year after the plan year ends? Would the plan sponsor agree to a special valuation whenever someone needs a distribution? Some plan documents allow for interim valuations.

Perfect! Thanks so much for the hidden explanation!

I have the same situation with a safe harbor non elective, integrated plan. There is no profit share to terminated employees and those who work less than 1000 hours. I have been told by the software admin people that I shouldn't give the 5% gateway to those who are only receiving the 3% safe harbor because they said it isn't a cross tested plan. I have tried to research the question through the IRS website and I haven't found anything. Does anyone have a suggestion on where I can find the answer?