Bri

I kept it straight by realizing the same new early-eligible people who are dropping the TH ratio from 61% to 59% get absolutely no thanks for it from anyone other than the owners. "You cost us a top heavy minimum even though you weren't qualified to even get it in the first place."

First thought is, why ask the actuary's office rather than the accountant's?

I'm wondering if there's a way to claim MDO as 0% for the NHCEs and just take it all back as an ADP test failure.

"By the way, a lady in a bar told me I had a mistake of face once. No respect!"

Do the other companies have existing 401(k) plans?

I've had an attorney bless its use for the TH minimum. Didn't need a gateway test, though.

Isn't that only if it's using the IRS Model SEP, that it then has to be the exclusive plan for the year?

First question is the plan's allocation formula and requirements to share as indicated in the plan document.

That was a good article, and it went into a lot of the what-ifs with the 415 limits per year....I wish it had addressed what happens if the 2023 SH deposit is indeed made 12/31/24 (as in one of its examples) and it's for someone with a $0 annual additions limit at all for 2024 because they had terminated employment in 2023.

The excess to the rollover contribution has to be corrected with earnings or else it's only partially corrected. Plan's okay, but the IRA wouldn't be.

Peter - I'd say that the "owner/trustee" only realizes there might have been a missed/late payroll deposit when the TPA notices it as part of the year-end reconciliation.

If I've had more than 15 plans in 25+ years where the trustees weren't just the owners or an executive committee (small businesses almost exclusively), I'd be surprised.

First thought was the potential loss of a TH exemption, but if everyone's part time that sounds perhaps unlikely. And the eligibility cutoff doesn't align with who'd you be able to segregate out as otherwise excludable employees for ADP testing purposes.

I would think (and I will freely admit I haven't done MEPs in years) that if the NHCE testing population consisted of 0 NHCEs for 2022 that 2023's ADP prior-year test will automatically pass.

What if the sponsor plans to update spousal consent from 5k to 7k with the SECURE 2 amendment?

sounds right, aside from the usual caveats (like I pretend you would have deliberately omitted whether there was a profit sharing component to this as well, or if there's no real way to prove the employees actually chose their 0% rates)

I know what you mean - as an allocation, owner might get 96%. As excess assets pro rata, she might get 98%. I am getting the suspicion there aren't "established guidelines," huh?

It was "may" in the text, and it did just occur to me, as long as it's not allocated as a new accrual, then the excess can go in proportion to the summation of benefits which I suppose were already deemed nondiscriminatory in past years. Ha, actually the BPD for the Cycle 3 differs from our BPD for the PPA document. The C3 "may" allow the reversion, but it's not been adopted yet - the PPA (original) version still is set to reversion but that WILL be amended.

It sounds as though you have non-resident aliens earning no U.S. source income. As long as your plan affirmatively excludes people like this, you can exclude them from coverage/nondiscrimination testing.

So, what counts a non-discriminatory basis? I've got a CB plan terminating at year end (owner retiring, so no QRP possibility) and have to think it through as well. The document allows for reallocation of excess if nondiscriminatory, and it looks like there will be some. Pro rata to CB account balances? Pro rata to accrued monthly benefits as of plan termination? How about as of the plan's NRA? And what if the plan only passes 401a4 when combined with a DC plan? Include "some version" of the value of the benefits from the DC plan when prorating? Someone's gotta have done this before, curious what they did....thanks!

1.415(a)-1 and go from there? 402(g) is a "per person" limit, 415 is a "per employer" limit.

I agree with Paul, you'll have anti-cutback issues. As justanotheradmin had brought up, is changing the comp definition in an "individual allocation class" plan, actually "going to do much"? Especially if the gateway happens to be 5% of 415 pay anyway. It "feels" like maybe you'd be reducing how much counts as SH, versus PS, out of the same overall floor total allocation for folks.

So a midyear change to a safe harbor plan that only is going to affect how much of their gateway minimum has to be fully vested?

So, HCEs such that the plan can't just amend via -11g to increase the allocation? (Was it 415, or just the wrong comp being used for a pro rata allocation?)

It wouldn't be forced to an outside IRA in that case? Is it under $1,000?