Bri

Combos with testing, or just the DB/CB calculations themselves?

I've seen plan documents that say if the person's going to share in the allocation, they don't actually forfeit the nonvested portion yet....so maybe just spot-check your section there, too.

The failure is the test itself, not the timing for that one particular option you could use to correct it.

Does the plan provide for forceouts after NRA? That could eliminate future problems for the sponsor, at least. (Still hoping someone suggests a sack of nickels with a big $ on the front, left on the guy's doorstep every December.)

"No partial year interest" is great, until it's not. Which is when you have to explain to the sponsor why only the post-NRA guy gets extra gain on his prior year-end "balance." And why it's not at the plan's ICR of 4% but rather the AE of 5.5%.

Getting the match doesn't guarantee a full THM. (You're not mis-aligning this with the gateway rule, perhaps?)

Look at it as... Yes, they're subject to the THM every year. Now, do they have an exception they can apply? Wouldn't someone brand new be an otherwise excludable employee and therefore possibly excludable for THM purposes as well on those grounds?

W2 income triggers FICA in the Roth mandate rules, SE income doesn't. (Ha, this is where we all come up with contingencies like the IRS is gonna go after the CPA not assigning any reasonable wages for the S-corp. officer. But in a vacuum, no problem.)

Right, if coverage is above 70% (regardless of class formula) then all you're really testing is nondiscrimination.

Feels like the same argument you'd use as to whether the plan gets to file a 5500-EZ for 2026, no?

That sounds right, they get 5 if they have to, but in this case the guy isn't subject to duplication of THM benefits. And yes, the PS would have been "the rest" of the THM. I have a combo client where one HCE gets a 4% SHM and therefore only a 1% PS to get her all the way to five.

Well, is your SECURE 2.0 amendment going to operationally reflect the no THMs for otherwise excludables? If not, then you'll want to review exactly how that 5% is spelled out. Is it 5 because the document says everyone gets 5, or is it because the plan says anyone who needs to get 5 will get 5? That first HCE in theory should only need a 3% THM, already covered by the match they got. But the document might have been written to force the 5 upon the guy. Kinda would need to see more of how much the THM is written as an override to the other provisions.

....and don't be cutting back any allocations of the forfeitures where you might come to realize language was always on the books!

The trustees should move ALL the funds to the pool, or none of them. For their own 404(c) protection, and because what's less easy than individual accounts? Having BOTH the individual accounts *and* a pool. They said it was complicated!

That's a no. Your deferrals (even catchups) can't exceed your wages.