rcline46

If the union bargained in good faith for retirement benefits, then you can exclude union from testing as if they never existed.

I would suggest contacting the DOL abandoned plan program (EBSA office) where the plan is located and providing them with the informaiton. Let the DOL contact the trustee.

Most documents since GUST exclude affiliated employers unless they adopt the plan - check your document carefully. Even if excluded, it does not solve the 410(b) problem. Once you check 401(k)(10) on the merger and acquisition rules for timing of compliance (don't forget the other owners of the surgery group!), then you get to give the good news of the plan changes.

That certainly smacks of an ASG! I think 401(k)(10) will buy you a year here (end of year following year of acquistion) because I think it applies to ASGs also (without looking it up again). However you are (will be) certainly subject to the 410(b) test across the group. Changes will have to be made to the plans to get into compliance.

You have not described why you believe you have an ASG here.

Then the OP plan REALLY wont work with a 10% ratio!

Even if you do component plan testing, each component must pass Non-discrimination rules. How do you pass with .05/.5 or 10% ratio in plan 2? need at least 40.5% and the plan must pass ABPT.

How do the owners show that the funds were deducted from their pay? That is a requirement for a 401(k) contribution.

Get the legal opinion they must have obtained to do that. Yeah sure. They are wrong, and if they ask you to prove it, have them call EBSA or IRS to see if what they are doing is wrong. Its cases like this that makes me wish for an anonymous reporting capability.

Jim - that's why I like this board. It is hard to remember EVERYTHING, things they are a changin'. Someone remembers that little piece you overlooked/forgot/never knew and helps you out. I for one admit to having those 'OH MY GOSH' moments.

Sieve is correct, of course. But in the OP only the owners (which are (most likely) HCEs) take compensation from both companies.

If each plan passes 410(b) separately, you can test separately. HOWEVER, for the owners, you must use their pay AND DEFERRALS from both companies in each test.

The purpose of the insurance is if the executive should die prematurely, the bank gets tax free income to pay the deductible benefits. whattadeal!

Now you know why they are the 'prior TPA'. Seems to be client to watch. Most TPAs that I know will complete the 5500 based and information in hand and send it to the client with a letter stating such. An amended 5500 can be submitted later.

Just to match it to testing requirements and nothing else.

It is my belief that the -11(g) amendment will take the plan out of prototype status, but this will be 'fixed' with the EGTRRA restatement. I am also assuming, cuz I don't remember if discussed, that the plan does not have the 'fail safe' language in it to fix the more expensive way. You can name the three with the specific amounts needed. I would word the amendment to identify it as being done to satisfy gateway.

The document probably does not have the cross testing language (because it was not a cross tested plan) and an 11(g) is necessary (hope it is not a 12/31 year end, cuz you are late). If it were a cross tested plan the gateway language would cover you.

If the son does not own stock on his own - yes. Unless the company meets one of the special exemptions on its own - dr, lawyer, accountant, certain professionals, etc.

Not for deferrals, but could for all other monies, including earnings.

The owner needs to amend the plan so that he/she can take a taxable distribution/loan/hardship, give the money to the company to pay the Top Heavy.

Under PPA there is almost always a range of deductible contributions. No reputable actuary would provide a range which includes non-deductible amounts. However, only the accountant can determine if the amount is actually deductible. For instance, you cannot deduct more than the net earned income for the sole prop. Therefore, under the plan the law would allow a contribution of $150,000 which could be deducted. If the net earned income (before contribution of course) were only $95,000, then the sole prop could only deduct the $95,000, and should not deposit more than $95,000.

This has been argued in many threads. Both items. 401a4-11g nowhere states it is used ONLY for correction of testing failures. (Oct 15 is deadline). Many of us believe, after a presentation at ASPPA a few years ago, that you really can include accrued contributions in Top Heavy. And since the 11g amendment is now a required contribution, although not a true 412 contribution, sort of like a SH contribution, it should be counted. Be Brave!

It may be too late, but if NOT a prototype, do an -11(g) amendment and give some non-Key(s) a contribution to get 60% or less! It is usually cheaper than a Top Heavy contribution next year!

If there is employer funds in the plan, it will ALWAYS be an ERISA plan. I believe that 401(a)(4) non-discrimination issues only arise starting in 2002 due to EGTRRA. Checking should not be terribly difficult. 5500 issues - will take some time, but the filings are actually quite simplistic and can be done going all the way back using the 2008 forms, and only $1,500 to the feds if the plan is small enough.

The new vendor has a very poor document if this is the case. Get a copy of their adoption agreement (I will bet it is a standarized prototype) and read it. Who is the new vendor, maybe someone on the board has experience with the document they are providing and can help you.