ETA Consulting LLC

I agree with you. There are some designs to get around this. For instance, you can make eligibility 1000 hours during the first 6 month (or 1 year of service in the event you miss the 1000 hours during that time). Based on what you're saying, elapsed time appears to be the only requirement for eligibility (and the service spanning rules would apply). Good Luck!

No. Good Luck!

Probably not. There is no rollover of amounts to another plan when there is no 'distributable event' under the plan. Since you are still employed (and possibly not eligible for a distribution from the plan), you are not likely allowed a rollover. As far as a plan to plan transfer, we know there are mandatory disaggregation rules that apply to union and non-union plans. These rules apply to many areas of compliance (with limited exceptions). So, it is probably best to keep those amounts separated (without conducting a detailed analysis of everything that would be accounted for when those assets are commingled). Other members would have the additional insight, but I cannot remember off-hand how Top-Heavy would be impacted in the instance of Union and Non-Union with respect to the mandatory disaggregation rules. Good Luck!

Yeah, I mis-read the question :-) I read 5 to 1; not 1 to 5.

This is correct. A transfer is still a transfer; and those are unlimited. It becomes an issue when you take constructive receipt of the funds. Good Luck!

This is purely an interpretation issue. Some "Plan Administrators" may interpret "Owners" to mean direct owners and place the son in the group with all others. Some "Plan Administrators" may, instead, interpret Owners to include owners by attribution. They key here is that any Plan Administrator is not required to have the best interpretation, but merely a reasonable interpretation; and I'm assuming the plan's provisions have authorized the Plan Administrator as the authority in interpreting the plan's provisions. In the IRS's eyes, they don't what such interpretation to be arbitrary and capricious. Good Luck!

You are thinking correctly. You have to obtain the information necessary in order to perform the analysis. Good Luck!

Generally, you would compare two situations: 1) What should've happened and 2) What actually happened. On the surface, it appears as if each participant's account balance is exactly what it should be had things occurred the way they should have. The difference would be in how the W2 forms (which are technically accurate) are reported. In looking for a reasonable (and perhaps VERY conservative) approach, you could reclassify the amounts received as deferrals as "Qualified Employer Contributions" and move on. When you look at it, a Qualified Employer Contribution (whether it's a QNEC, QMAC, SHNEC, or SHMAC) is the exact same thing after the funds hit the trust. Their only distinction is at the point they are calculated. Once in, they have the same vesting requirements and distribution restrictions. This should keep the plan compliant with respect to operational error and reasonable correction (and should be achievable through SCP); meaning no VCP submission would be necessary. When it comes to whether the Employer seeks financial remedy from the Payroll Provider, that may be an entirely different issue. Nonetheless, it would be a civil issue (or service issue) that would fall outside of the actual plan compliance at this point. This is merely one of potentially unlimited 'reasonable' approaches to explore. Good Luck!

I would attempt to amend the one that has already been submitted in order to avoid the additional fee. When it gets assigned, reach out to the agent with the revised package. Good Luck!

It appear as if you have it figured correctly. The "ONLY" option to get a little closer (adding additional contributions without invoking Top Heavy) would be to allocate additional matching contributions under the ACP safe harbor. This will give a contribution to only those employees who actually deferred, but will keep you under the TH exemption. Good Luck!

I "liked" this comment earlier. So, I'll ask.... Are they partners in the partnership?

I agree, but for a different reason. They ARE rehired because they are back at work. I think your terminology meant that they simply failed to meet the 1000 hour accrual requirement for the year. Also, to your point, the plan may have contained a provision requiring a year of service upon rehire with retroactive entry to date of rehire. Even then, they would still have failed to meet the accrual requirements for receiving a contribution. The only issue would seem to be when would you include them in the test as not excluded and not benefiting. Good Luck!

If it's nonERISA, then no Form 5500 is needed. That wouldn't change when the plan is terminating. Good Luck!

Not sure if this was sarcasm, but ownership from Corporations or Partnerships to individuals only apply if the individuals owns at least 5% of the company. As you know, a 5% owner is defined as owning 'more than' 5%. So, it's not "5% Owner" where the attribution applies, but merely owning at least 5%. I just thought that was worth emphasizing when attempting to provide an answer. Good Luck!

It's 5%; not more than, but just 5%.

Sure, you can! A "restatement" is merely drafting the plan onto a new adoption agreement (which now incorporates all the previous good-faith amendment language into the core of the document and has now received a favorable determination letter). An "amendment" is merely a change in the actual terms of the plan. You can 1) RESTATE and 2) AMEND at the same time; one has nothing to do with the other. You are REQUIRED to restate while you have the option of amending during that process. Good Luck!

Please ensure that the surviving spouse understands that if she is not 59.5, then she would be effectively moving the assets FROM a vehicle that is exempted from the 10% penalty (due to death) INTO a vehicle that is not exempted. Another option may be to simply roll in into an inherited IRA set up with her as the beneficiary (which effectively operates as her own IRA, but ensures she retains the exemption to the 10% penalty that she's entitles to). I've seen this happen too many times in my career. Sometimes, they need someone to shed a little light so they can make informed decisions. Good Luck!

A checking account may be a plan asset. The checking account should be set up in the name of the plan (e.g. XYZ solo (k) Plan); not merely the company. You, generally, must contain a Chinese wall between the plan's assets and any other assets of the Company. A checking account that is properly set up by the plan can accomplish that. Good Luck!

In which case, the plan is immune since is error is covered under the VCP submission. Good Luck

A late interim amendment should be $375 regardless since this would be the only failure included in the submission. The 50% reduction is not needed, but could be used for ANY nonamender failure that is "SUBMITTED" within one year. So, to your original question, the one year period is driven by when the package is submitted (implying no signature is actually required by then). However, since the failure pertains on only interim amendments, then you qualify for the $375 fee regardless. Also worth mentioning, the $375 fee and the 50% fee is equal only when there are 20 or fewer participants. If the plan is larger, then the 50% fee may change. However, the $375 fee is fixed under it's applicable circumstances. Good Luck!

Understood. I don't think it needs to be executed prior to submission. I say this because the nature of VCP. When you submit VCP, you are immune from all "failures" that are included in the submission. So, it should have the effect of a quarantine of this particular issue. Good Luck!

Sometimes, when addressing an issue, you would forego a technically correct answer and ask the question, 'What are you trying to accomplish'. I do it a lot. Many times, a single answer, while technically correct, only leads to an endless series of additional questions that fail to resolve the underlying issue. Not saying that this is the case here, but it justifies an approach of asking the question. Good Luck!

This, to me, sounds like a fringe benefit. Good Luck!

What are you trying to accomplish?

It's not a major show stopper; especially since the EIN has not changed. Can't think of why they wouldn't want to change it. Consistency is good. What are they basing their objection on? Good Luck!