Bri

First thought is whether or not any distribution was actually permitted under the terms of the plan. If that's a no, then the proceeds have to go back to the plan and the flowchart for the fix-it process ends up completely different.

*especially* if it's a uniform allocation formula for the 5% (as opposed to individual allocation classes, where everyone might be assigned an identical 5% but only if that's the way the sponsor wants it)

How are they still receiving the cash if that option was eliminated? What are the normal allocation conditions in the PS plan and are the folks getting cash now NOT getting PS? Feels pretty facts and circumstances as to whether or not this is still hiding as a deemed CODA.

Actually it's getting to 1000 hours, rather than the last day, to qualify for a DB plan's top heavy minimum. Even if they don't work enough to automatically qualify for a THM, they might end up needing something that large, anyway, to pass the 401a4, depending on what the owner is getting.

Failure to distribute the related match ends up as a 401a4 issue, though, right? It's not really a corrective distribution occurring when it's simply the match being forfeited. Not sure if that buys you any extra time beyond 3/15 though.

Only the 50,000 statutory maximum gets reduced by the highest balance in the previous 12 months. You don't do that same lookback with smaller loan amounts. Those just have the usual 50% limitation.

Does the document spell out what to use? If the document gives you the leeway to use any 414s compensation, then sure, you MAY limit 414s to only periods of participation. (You don't have to, but you have to be uniform for all employees.) If you have separate participation comps (and a hearty "Blam!" to anyone who's forced that upon you) then I suppose you'd use the participation comp relevant to exactly what you're testing for. If you're testing the gateway then you're measuring nonelective contributions by the employer, so use the participation date applicable to getting nonelective contributions under the plan.

I think that's in reference to a missed participant, not a missed change by an existing participant.

Sounds like a reasonable correction method....

I think that's fine, actually. Lord knows, we always talk here about how they want a 5500 even when there were no participants or assets the ENTIRE year. It's their sandbox and if you have less than 100 on day 1, you get a pass on the audit. If they wanted the audit requirement based on the EOY head count, they should have said so.

That seems crazy, like you're just giving the guy an extra $1,000 because of the data entry error.

Did the form itself indicate its effective date? Did the employee indicate when submitting the form when it was meant to take effect? Does the Plan Administrator otherwise enact elections upon receipt? (Kinda hoping you can find a way that this was an improperly executed/processed form.)

When is the sponsor's tax return due, and will they go on extension? That will determine a lot of the answers.

I think the carve-out rule is technically separate from the normal disaggregation rules. So if you're willing to throw any otherwise-excludable HCEs in to your statutory ADP test, then you technically haven't disaggregated for coverage, nor discrimination testing.

Nope, those are 415(c)-induced catchup contributions. Which then excludes them from the test.

and if they want a true-up, it's easy enough to code software to do it on a recurring basis every week using "year-to-date minus prior" or your system's equivalent language.

all related CG/ASG entities, or just a multiple employer plan? That affects some of the consequences obviously....

Isn't there a spot in the ASC software to program the "meaningfulness" at whatever level you want, with it defaulting as 0.5%

Is that just for Subchapter S, or could a C-corp. legitimately pay its owners $0 ?

maybe just Secure 2.1, currently in beta....

You can forfeit them, they weren't supposed to have those allocations in the first place. Put the plan in the position it would have been if it had been done correctly, and so those ineligible folks still end up with $0.

The ADP test measures for discrimination the deferrals for everyone eligible to defer. The lack of compensation made these people ineligible to defer, so I leave them out.

7.5% is usually the highest the gateway has to go, but your testing numbers will determine if a lower gateway applies.

I think it counts in the testing, unless you can also show it's also a 415 excess because of extra-large profit sharing. But it would take me an hour to dig to find where I got that from.

That's right - think about if this were really two separate plans, the same methodology applies. It might even be a little more obvious because those 5 NHCEs really would be zeros in "plan A" rather than just treated as being part of "component B".