Bri

People who waive participation like that are still included in your coverage testing, just as not benefiting. That's what you want if the guy's an HCE. As to whether the daughters are HCEs also, I suppose that depends on why the first guy was deemed an HCE in the first place.

Dig deep into the document's definition of an hour of service - there may be language stating the Plan Administrator's records may be allowed to be kept in such a way that they track it pay period to pay period based on the dates paid, rather than actually worked as a matter of uniformly-applied convenience. But absent anything like that, you should make a claim for benefits as your SPD allows you to based on your records.

In for a penny (3%), in for a pound (gateway rate)

So recordkeeper 1 decided that since the check went stale, they wouldn't do the 1099-R? If the check had been written in December would they still be waiting for it to clear before deciding to issue the 1099 for last year?

yes, at least according to every Derrin Watson seminar I've attended on it.

Maybe plan sponsors will no longer list their spouses with 1000 hours every year only to justify their deferring. Put them in at 501 and it's more believable, too. I'm sure we've all seen the spouse deferring 92.35% of pay and attempting to ruin a perfectly good average benefits percentage test.

None of these people meet the statutory eligibility of 410(a). So test them separately.

Do your actual testing with a definition that does pass 414(s) then, even if the allocations were done with the comp definition you were given. If you can pass with gross 415 pay, for instance since that passes 414(s), then you should be in the clear.

The funds were distributed, which they should have been, regardless if they were an actual benefit payment, or as an ADP refund. The plan just has to do two 1099-R forms bifurcating how much counts as what, and then since the IRA has money it shouldn't in there, the IRA owner will need to get it out or face the penalty for an ineligible rollover contribution.

So the coverage ratio is 70% or more, and the contributions are a uniform 3% (a safe harbor uniform percentage of compensation) for those who do get them? That'd be fine.

Way more than the minimum contribution, or way more than the maximum deductible?

They can start another PS plan for 2024 with new comparability, and merge them next year.

What do the plan's document and procedures for in-service distributions say?

Plan B shouldn't be issuing a 1099 for this. They're just fixing an inappropriate rollover CONtribution.

whoa, wait.....If she gets paid in 2024, she gets a 1099-R for 2024. Why would or should this be retroactive in any circumstance?

I'd make sure nobody's match amount exceeded the amount a annual formula would have come up with, too. If it's 50 on 4 every week, how did this one guy end up with 2.05% for the whole year - that kind of thing...

Grrrr, either go with a pay period calculation or don't, but stop trying to be cute? 😜

And if the HCEs get their 3% as profit sharing rather than as the safe harbor nonelective, you get to impute disparity on it when general testing with other benefits. You'll appreciate that difference exactly once in your career but it'll be worth it!

those IRS statements are what I'd call "necessary but NOT sufficient"

That doesn't sound right, as an EPCRS correction like this is all taxable in the year of payout. Answer would change if this were a 402(g) excess, though.

Why couldn't they have a multiple employer plan?

Do you, in your software, utilize separate line-item accounting for the hard assets versus the receivable? If so, you can probably check a box in the software to exclude the receivable sub-account from the calculations. Like if account #201 is the mutual funds and account 202 is the receivable, only account 201 gets included.

(and if loans are automatically due/payable upon termination of employment, you're looking directly at 6/30 even if the guy tried to make some partial repayments now thinking following the schedule buys him into a future quarter.)

Aren't top heavy values done on a cash basis in a PS plan after the first year?

The problems are (1) a SIMPLE can be a company's only retirement plan for the year (save for the new SECURE 2 language letting companies convert midyear specifically to a safe harbor 401k plan) so having a SEP for the same year would run afoul, and (2) if you own both businesses, the IRS will look at the companies under common control as though they were one single employer for benefits testing. In other words, just having a second plan (for the sole prop) would require you to consider the LLC's employees in terms of the overall who-can-get-what