Bri

Agree with Belgarath - use already-plan money to pay the premiums as an "investment transfer."

It's not just fixable as 415(c) excess?

Isn't the easiest technical fix just to allow Roth as a benefit for NHCEs only? Adjust the "universal availability" to make it easier for sponsors.

Hey, that top heavy paragraph (ii) hints that you can include (not electing to exclude) the LTPT balances in the top heavy ratio, but wouldn't have to make a THM or increase vesting if applicable for them. Seems best of both there - maybe the LTPT drop you from 61 to 59% and nobody gets a THM. But if they still leave you at 61 while including them, they don't get their 3%.

Will small employers' advisors drive their sponsor clients to these pooled arrangements? Wouldn't they prefer more of a finger in the pie, teaming with a local TPA/advisory firm to something more tailored?

I would think it's okay - I mean, you'd typically budget a normal cost for someone who then doesn't hit 1000 hours in the upcoming year, but it was the actuary's best guess as of the val date. You could consider a turnover decrement for people scheduled to hit 7/1/23 that "might end up turning out differently" as well, right? I realize this is just my gut but it "feels" acceptable.

Might they be able to get the -11g amendment executed prior to 3/15/24 rather than 10/15/24, and then they could do a 412(d)(2) election for it?

My "7-10 Split Plan" is just to roll it hard and hope for a bounce across the lane.

If the contribution is that onerous, though, they could always reduce their 2023 deferrals so that the business can afford it before 12/31/23.

Thanks, Lou - That was my thought as well, to have other assets outside that recordkeeper, so their version of the prepared 5500 would be wrong, but that's fine if the sponsor only actually files our replacement version instead. As it's not my plan, I was actually more curious about the legal argument, than how my colleague's gotta deal with it 🤪

So, here's 1.401(k)-1(d)(4) from the Cornell Law website folks The fact pattern a co-worker gave me was interesting DB/DC combo, plan needs to make DC allocations for 2022. Plan sponsor's assets were sold/employees terminated in 2022. DC plan has been already terminated, though, and everyone's paid out, maybe except for one straggler. There's concern their big former DC separate recordkeeper would balk about opening the plan back up after termination/payouts. Anyway, the "interesting part" concerns whether or not the sponsor can just start up a separate DC plan, retroactive to 2022, to receive these allocations for the testing. This regulation seems to preclude distribution upon the termination of a plan when the sponsor's going to set up another plan within 12 months. The thing is, in this case, all the employees' distributions are contingent upon their termination of employment with the Seller. And the owner has a distributable event upon age 59½. So none of these distributions seem to have the plan termination as the distributable event - does that mean a successor DC plan is going to be okay after all? --bri

I did just look to see what 8/30 would convert to as 6 months later and it came to 2/28. Starting with 10/31, though, it came up as 4/29. (This was straight plan entry-date calculations as opposed to benefit-eligibility calculation. Maybe Relius does those calculations identically, but I can't say for sure.) Interesting....

Yeah, I always chuckled at the basic concept of "the plan sponsor has the option to file the same version of the 5500 as last year" when they're in the 80-120 range. As in, why pay for the audit you don't have to get, now that you've come in under 100 for the first time in ages? Not like anyone jumps at the chance to do the audit at 101, they always wait until 121.... (don't they??)

Peter - I just took a quick peek at how Relius sets up distribution definitions, and it's looking for a minimum age of years/months. I don't have a dummy plan to test it on, but that sounds like they'll simply add the number of months to the birthdate day number.

Hopefully they aren't also staring at their 415 max lump sum on the other end of the calculations....

This will be easier once the calendar goes metric.

What about the exception for disability?

the SH is due within 12 months after the plan year ends, regardless of what year's tax return they deduct it on (although, subject to 404 limitations if they tried to deduct it in a short tax year)

I also wondered what that statement was about when I saw it. (good for BL newsletter Nielsen ratings)

I think I recall being at a seminar where the speaker (respected and known on these forums) mentioned it's okay for a plan to change its under-5000 rules without it being a cutback. (DC setting, though.) I'd think this is similar - but that guy was the attorney, not me.

Following back up with Peter, the DOL annual fee disclosure provided to participants would typically list a larger "distribution processing fee" (compared to a normal termination withdrawal) assigned to the participant's account, and then the parties at hand can argue about who will actually take that hit. (But not an hourly fee, which makes me wonder about addressing that line item on the disclosure!)

I've had to spend hours calculating gains back to 2009 for a 2014 QDRO. It's not fun even when the recordkeeper spits out the participant's full transaction history. The market loss cost the AP $1,000 due to some lousy trading by the participant. It's not a bad idea to let the lawyers know how much of a processing fee it might take to split this stuff perfectly, and perhaps they instead agree to a round number unadjusted and say, close enough.

Exactly, which is why the "100% uncapped" match won't pass the ACP safe harbor. My point was that passing the ACP test if necessary might not be that difficult, if the owner's pay makes his own match amount a relatively low percentage.

Another thing to keep in mind here is that if the match is 100%, uncapped....you might not have a problem with the ACP test. At least not if the owner's at max pay anyway so that his match rate ends up only around 6.82%

Don't forget this rule, though....page 105 of 140 in Rev. Proc. 2021-30 (it's what BG5150 looks to be asking about): (F)Special Rule for Brief Exclusion from Elective Deferrals and After-Tax Employee Contributions. An Plan Sponsor is not required to make a corrective contribution with respect to elective deferrals (including designated Roth contributions)or after-tax employee contributions, as provided in sections 2.02(1)(a)(ii)(B) and (C), but is required to make a corrective contribution with respect to any matching contributions, as provided in section 2.02(1)(a)(ii)(D), for an employee for a plan year if the employee has been provided the opportunity to make elective deferrals or after-tax employee contributions under the plan for a period of at least the last 9 months in that plan year and during that period the employee had the opportunity to make elective deferrals or after-tax employee contributions in an amount not less than the maximum amount that would have been permitted if no failure had occurred. (See Examples 6 and 7.)