Bri

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.)

The safe harbor match rules limit how much you can apply the match to (i.e. deferrals past 6% of pay) so I don't think it would work fully.

And then a rank and file guy says, hey, use 5,000 of my account balance towards your 500,000 investment.

Sounds like you should check the plan's definition for compensation. It's probably just like when someone new starts being eligible for a plan on July 1, the document may or may not to include pre-participation compensation for plan purposes. This is similar inasmuch as the employee's job classification makes him ineligible at various points, so the document will tell you whether to include "only as a participant" wages or not.

Sounds absolutely smart to set it up with a 2-year wait. And it buys you time if there's someone later hired to replace whoever that other person was. I suppose, make sure the owner has 2 years herself in this enterprise.

If she had a deferral election in place when she was still unincorporated, that should still carry over after the change in tax structure. And since unincorporateds are allowed to pre-fund deferrals before the EOY "income declaration day", I think that it would still be reasonable for the funds to stay in the plan as subject to the (if it does exist) proper election. Of course, I'm no lawyer....

Well they could take the rest of the deduction on the 2023 return (if depositing after year end) and hopefully fix the problem so they can still get the rest of their 2023 allocations to fit under their deduction limit for 2023.

That language is ignoring any prior loans in determining the maximum. If I have a 100,000 account balance, I could borrow 50,000 and then borrow 50,000 immediately again since that's half the account balance. As for why loans are done as dollar amounts, that's because the dollar amount needs to be certain in the actual promissory note and fixing that eliminates the need to update paperwork on the fly if the alternative 50% value fluctuates. Plus I would borrow 8,000 if I knew I needed 8,000 - I wouldn't back into a request for 7.193% of my account balance.

so it's already out of blackout?

Because 72(t) doesn't authorize it. Let him enjoy a warm freshly-printed page or two of Code and regulations. (or have him take the last bit of these needed funds as a loan which I'm suspecting may not be readily doable either...)

It's the actual asset value as of the beginning of the year, most likely nonzero.

No, there are separate 401(a)(4) tests for nonelective contributions such as profit sharing. Your text suggests you want to throw safe harbor and profit sharing contributions into your ADP/ACP tests.

Will the asset providers receive more than $1,000 in compensation from the plan cumulatively during the arrangement?

Well, different 5330 reasons have different filing deadlines, and you're instructed to report all those with the same due date for the same plan on one form. But as each year of the pyramid gives rise to a new PT, you might indeed submit a filing with "the new PTs for 2022" along with the "carried over (new) PTs as of 1/1/22 from 2021" on the same 2022 form.

No, the "highest in the last 12 months" only reduces the 50,000 branch of the either-or tree, the 50% branch is unadjusted.

agreed - the document language may allow the HCEs to be SOL, so to speak.

I was going to suggest there was Schrödinger's prohibited transaction in play. As of 12/31, they are still within the 7-business-day safe harbor to make the deposit. But once January comes with that 7th day, it then becomes a prohibited transaction back to the regularly-scheduled deposit date (since you don't count late earnings only back to the end of the safe harbor period).