AJ North

Thank you to all that responded. It turned out there was a misunderstanding on a coworkers part that while age 65 is generally the max age permitted for NRA, you can add a max 5 year service or participation requirement. That has been resolved.

We have a plan amending to add the profit sharing/nonelective contribution account as eligible for in plan Roth Rollovers. This will apply to both distributable and non-distributable amounts. The plan only permits a participant to withdraw this money in service if they have reached the plans NRA, which is 65 plus 5 years of participation. This in service withdrawal provision should be carried over for any profit sharing amount that is covered to a Roth Rollover. I am being told that for amendment purposes, we can only have age 65 and not the 5 year requirement as the inservice withdrawal provision. I am not seeing this restriction in the plan document. Is this a regulatory restriction on in plan Roth Rollovers? Any insight is greatly appreciated.

Again, thank you all for responding. No this is not a class year vesting situation, class year vesting has not been permitted for 30 years or more. Whether you are 100% immediately vested all the QACA match allocated to your account, or whether you are subject to a 2 year cliff for all the QACA match allocated to your account; is determined by the date you were hired. This is the first time I have seen a SH plan with different vesting for different groups of participants where permissive disaggregation is not a factor. The QACA formula is the same for both groups. But from what I am finding out, there appears nothing to prevent it.....yet. Definitely a BRF situation that may become an issue down the road.

First, thank you to all that responded. Bri has it correct. The plan has a QACA, however, depending on your date of hire, you would be either 100% immediately vested or subject to a 2-year cliff. I do not believe I have ever seen a SH plan with two different vesting schedules and yes it appears to be a separate BRF issue. Since this does not fall under any of the permissible exclusions, can you do this in a SH plan. I understand you can do this with a non SH vesting schedule, but with a SH vesting schedule?

I am working on a plan that has a QACA. The plan has one group of participants hired before a certain date as 100% vested in the QACA match. The group of participants hired after that same date is subject to a 2 year cliff schedule for the QACA match. Is this permissible? The two groups do not fall under the permissible disaggregation rules as the difference is based on hire date only. Any thoughts?

Good afternoon. We have a safe harbor 401(k) plan that uses the top-heavy exemption due to the fact that the only employer contributions to the plan are safe harbor contribution. They are merging with a non-safe harbor plan January 1, 2023, that is going to be deemed (more than likely) top heavy on December 31, 2022. The question is if the top-heavy contribution is going to be made to the surviving safe harbor plan sometime in 2023, does the safe harbor plan loose it's top-heavy testing exemption? Both plans are calendar year. I am understanding because the non-safe harbor plan is considered terminated, they should make the final top-heavy contribution. Any comments are greatly appreciated.

I understand that a safe harbor contribution can be made to plan other than the plan where the 401(k) salary deferral was made. Is a money purchase plan considered an eligible plan to receive a safe harbor contribution? I guess I am getting hung up on the pension aspect and minimum funding standard of a money purchase plan.

Is this executive still an employee of the plan sponsor? If no, then they would most likely not be eligible to contribute to the the plan and the definition of comp may end up being a moot point. Is this individual still eligible for other employer sponsored benefits? Complex topic.

Thank you for responding, Larry. That was my understanding as well and the answer I always give. If you come across the citation, please post. If the employer wants a different answer, they can pay the cost of obtaining one. I am sure that there is an attorney out there that will have a different answer. Thanks again.

We have a plan that experienced a partial plan termination that resulted in some participants being made 100% vested. The employer has since rehired one of those participants made 100% vested. The question is does that rehire remain 100% vested in contributions going forward, even though the accrued years of service to calculate vesting does not add up to enough to be 100% vested? I cannot find anything that specifically addresses this situation. Comments would be most welcome.

Thank you for responding.

I have a client that did not remit some salary deferral contributions deducted from participant paychecks on a timely basis to the plan. The excise tax was calculated, Form 5330 filed and the excise tax was paid. It was subsequently discovered that the excise tax paid to the IRS was over stated by several thousand dollars. Apparently close to half the late contributions were actually allocated to the plan on time. Has anyone dealt with this issue before? Can the excise tax over payment be recovered from the IRS? Thank you.

If the plan language is specific stating the "maximum" is up to the 402(g) Limit only; would you have an potential effective availability issue? Depending on the employee population, would only HCEs practically be able to take advantage of this kind of provision?

The SH plan in question will be increasing their match at some point during the 2020 plan year (plan year is calendar year). The match is calculated on a per payroll basis and that will not change. The plan will need to apply the new matching formula back to the first day of the plan year and re-distribute an updated SH notice. If the increase happens after the first quarter of the plan year, will the plan also need to consider providing earnings as not all of the match would be deposited on a timely basis (i.e. quarterly)? I believe that this is the EPCRS fix for late SH contributions when they are calculated on a per payroll basis but not allocated in a timely manner. I would greatly appreciate any commentary on this. Thank you.

Thank you, that would also be my understanding that refinancing and re-amortization are two different transactions.