R. Butler

Plan is a safe harbor plan meeting safe harbor a 100% match on the first 4% of deferrals. Plan has a flexible discretionary match that would generally meet ACP safe harbor requirements except that plan sponsor only wants to match pre-tax deferrals. Two NHCEs make Roth contributions, no HCEs make Roth. I think that is a problem because the ratio of matching would be higher for HCEs than NHCEs. Plan would pass ACP testing, but I still don't think they can exclude Roth deferrals from the discretionary because they specifically elected that both the "ADP and ACP test safe harbor" provisions will be used for any Plan Year in which any type of matching contribution is made. Since they've elected that ACP safe harbor provisions will be used, I think that they have to use the safe harbor provisions and can't revert to ACP testing. Am I missing something? This is a takeover plan for us and in prior years the service provider did allow the discretionary match to be made only on pre-tax deferrals. Thank you for any guidance.

Plan sponsor declared a profit-sharing contribution for 2022 and communicated to participants the exact amount that they would receive. The plan sponsor changed their mind and decided not to remit. Is that permissible once communicated or did the benefit accrue? Thanks for nay guidance.

Thank you.

401(k) plan is closed MEP. Two employers share common ownership, but not sufficient to be related group. A 401(k) is not a pension plan. I don't see that the Schedule MEP should be filed for a 401(k) plan. I assume that plan sponsor should attached the same schedule that applied prior to 2023. Am I missing something? Thank you for any guidance.

Plan sponsor currently wants to have a service requirement for match of 250 hours in 12 months. If employee works more than 250 hours, but less than a 1,000 hours during the eligibility period, can we still disaggregate because they didn't complete 1,000 hours of service? Thanks for any guidance.

I should know this, but I am having a brain freeze. Since partners deduct their own profit-sharing contributions on their own personal returns, is the funding deadline for a partner the due of the personal return or is it the due date of the partnership return? Thanks for any guidance.

Plan has different eligibility requirements for deferrals and safe harbor match. If a participant is eligible for deferrals, but not the safe harbor portion, must that participant receive a safe harbor notice? Generally the notice requirement is satisfied if notice is given to each employee eligible to participate, but I can't determine if that means eligible for safe harbor or for the plan in general. Thanks for any guidance.

Sole owner dies in 2022. Business had participants other than the owner so 5500-SF had been filed in all years. By the end of 2022 all assets had been distributed except for the deceased owner's. They have a final filing for 2023, do they file a 5500-EZ or continue with the 5500-SF? Thanks for any guidance.

Since the DOL will now provide that whether or not IQPA annual audit is required will be based on the number of participants with account balances, this becomes a more relevant question. Is there a consensus about whether plan sponsors who file the 5500 using the cash basis also determine the number of participants with an account balance on a cash basis? Thanks for any guidance.

Participant dies without a beneficiary. Estate is the beney under the plan document. CA has a small estate affidavit to help small estates avoid probate court. By using the small estate affidavit the death proceeds could be made payable directly to the beneficiary of the estate rather than the estate. Should the plan sponsor be concerned that creditors might have a claim? Creditor claims do not appear to be specifically addressed in the small claims affividavit. Thank you for any guidance.

Plan defines compensation as 3401(a) wages. Participant receives payment under a state paid leave law. Payment is actually made by the insurance company, but the income will be reported to employee on a W-2. It is my understanding that this would generally count as compensation under the plan even if paid by the insurance company. Does that sound correct? Plan does contain 414(s) exclusions, but I don't see that a paid leave program is a fringe or welfare benefit. Does that sound correct? Thanks for any guidance.

Thank you

Okay. So just so I understand. The ratio percentages for the rate groups are not calculated using just the HCEs and NHCEs for just the component plan, but by still using all employees of all component plans. I know that is true for the ABPT, but I thought the ratio % test looks just to the employees in the component plan. Let say plan has 2 HCEs & 19 NHCES. Rate group for one of the HCEs has a ratio % of 68% (2/2 & 13/19). If I move 5 of the NHCEs with lower EBARS to component plan 2. I still calculate the ration % for the one HCE group using all 19 employees instead of just using the 14 remaining in component plan 1?

Yes, but I have no HCEs in that component. All of my HCEs, I left in the other component. That is the question, can I do that to avoid ABPT? Component plan one has all 12 HCES and 14 NHCEs. Component plan 2 has 5 NHCEs. Each component passes coverage. Component plan one can pass each Rate Group at 70% with just the 12 HCEs & 14 NHCEs. It would not pass ratio with all 19 NHCEs. I move 5 NHCEs to component plan 2 with no HCEs. Is that permissible?

There are several NHCEs that are not in any rate group. Pulling those NHCEs out and putting them in their own component plan brings the rate group %'s up an avoids the ABPT. That was the reason for the 2nd question. Thank you