Bri

I suppose there's always the opportunity to elect X% of pay not to exceed $Y. Might not really get you what you want but illustrates some flexibility perhaps.

I would at least double-check to see if the BPD says anything about how deferral elections may or may not apply to "imputed income" rather than a straight wage payment to the employee.

Well heck, if we're getting semantic/pedantic, let's go further and say it's the 5th anniversary of the first day of the plan year in which participation commenced.

Or, if it's not too late, allocate a QNEC to last year's NHCEs?

And of course, I overlooked that it's still the 2024 minimum being paid based off 2023, so I do think they're going to have to recoup some of that IRA rollover to satisfy the RMD. (And adjust the amount coming out of the IRA for earnings since it was an ineligible rollover contribution. Hmmm, thinking out loud has me presuming only the "principal" amount coming from the IRA satisfies the RMD for the plan, like you couldn't count some of the earnings towards the RMD.)

If the termination is 12/15/24, isn't the RBD 4/1/2025 so that the 2023 balance is out of the equation?

I like Lou's idea. but wonder...... Is there any thought that because the payroll-period SH match on the commissions would not have been deposited quarterly as is typically required, that somehow the adjustment now also has to include earnings from what would have been those "end of following quarter" deadlines?

Not the ones who roll over their balances. But the exception is for termination of employment, not termination of the plan. 72(t)(2)(A): (v) made to an employee after separation from service after attainment of age 55,

I can't *imagine* your plan document requires it to be tested for nondiscrimination solely on a benefits basis. Do your rate groups on an allocations basis, and all the rate groups will pass > 70%. And then (except for the random possible exceptions which we as a pension community will remind you of in subsequent comments) you should be good.

It includes plans terminated in the last five years, not currently active ones.

if they hire enough monkeys and buy enough typewriters, sure.....

(and hopefully the plan's document "guarantees gateway" as needed for those with only the SH allocation prescribed)

Nope....controlled group....

Also in play are going to be whether or not the plan document is a standardized type that automatically extends plan coverage to all related group members. Depending on full census demographics, the laundry business might be okay not having to adopt the plan, but that would take far more detailed analysis.

As long as (a) document defines the compensation that way by source, and (b) the compensation definition isn't discriminatory (414(s) testing) Then this should be fine. Maybe a suggestion to make sure the SPD spells that out well enough so people aren't leaving match money on the table for only doing 6% of the base pay, but otherwise folks just need to think it through and maybe sign up for more than 6% so that they still clear 6% of their entire "match compensation" figure.

It does look like you'll have 7 HCEs and 1 NHCE (when she meets eligibility). The NHCE essentially has to end up in everybody's rate group, if you're cross-testing.

Can an -11g amendment only favor HCEs as this would? But anyway, the amendment itself will and should detail which specific employees get to accrue which specific additional benefits, however the fix is going to play out.

Sure, but a plan set up as late as October 15 will have some sort of a problem, since the minimum funding was due September 15.

Yeah, nobody wants to make the participant surrender two weeks' worth of ill-gotten gains! 🤪

True, but even if there were NHCEs, that doesn't meant the other HCEs get 5, they'd still only get 3.

Is this for a 2023 plan year filing where it's not actually late yet?

For a VCP application, you can suggest what you'd like and hope the IRS takes the bait. Why not suggest a 1-to-1 correction based on just the one guy who got missed, and only applying it to the "main test people"? If the IRS says no you're back where you started, but see what they might go for....

Technically, this #2 guy is a statutory exclusion, like let's say the guy termed on 9-15-2024. But the IRS allows for multiple interpretations for plan sponsors to take on how they sort out these people. They'd be okay if you didn't consider them excludable, since the plan's entry date for the person would have passed on 7/1. They also permit the interpretation to say the employee stops being excludable right at the 1-year anniversary date in March. (I've used software that lets you choose the interpretation your sponsor wants.)

Not quite, if the first day of the next plan year comes up sooner, that takes precedence over the 6 months. See 410(a)(4).

Agree with Lou - you might want to try VCP and suggest something where only those with balances (EPCRS does let you restrict it to "only those still actively employed" in self-correction) get the corrective contribution. Can't say whether the "going off-script" might require some juicing of the corrective allocations.