Bri

They do have to clear their minimum funding requirement for the year determined as of the valuation date, which could be changing as a result of the termination. If they do that, then the plan document itself may address what occurs in a termination with insufficient assets. (Possibly the plan says to pro-rate, or perhaps if one of them is the majority owner then that person alone forgoes receipt.)

Oh I gotcha - I misread that the rule of parity provided there was from a Basic Plan Document (illustrating what "could" be chosen) as opposed to being the actual text of a document (so inserted as a result of an election to include said provision), one not coordinated on an adoption agreement.

My web browser (Safari on my non-work laptop) tells me "The password for your 'benefitslink.com' account has appeared in a data leak, putting your account at high risk of compromise." I'm not super worried because A) I don't use the password for anywhere else B) I've used the same password since 2000 with no issues C) You'd have to put forth at least some effort in digging to figure out who I am from my profile D) Who would want to come on here and pretend to be me anyway? Being me is not a profitable endeavor. But anyway, seeing the message today for the first time was a bit surprising.

Aren't 2017-2021 5 Breaks, though?

Plan document might have a section regarding folks with 5 consecutive breaks in service for eligibility purposes such that the person gets treated as a rehire. But your document may vary on that.

Wasn't that option officially kiboshed a few years ago, with a default IRA the alternative?

Ooh, just in time for everyone's 2 hours of Ethics CE for the year! "The fact that you're even asking...."

One thought I had was to double-check your plan document to see if it has any leeway on the HCEs, like if the plan says the sponsor may make an additional SH for the HCEs up to the same level the NHCEs are getting.

I threw a comment out on the regulations site pointing that out - A missed deferral from March won't get caught until year-end work starts 10 months later, especially if it's a 5 salaried person company where the 401(k) total every week is the exact same $1,200 so that you can't easily match up your bank records, either, if one week is missing.

It's right in the regulations, A-11 (ii) Option for different section 204(h) notices. If a section 204(h) amendment affects different classes of applicable individuals differently, the plan administrator may provide to differently affected classes of applicable individuals a section 204(h) notice appropriate to those individuals. Such section 204(h) notice may omit information that does not apply to the applicable individuals to whom it is furnished, but must identify the class or classes of applicable individuals to whom it is provided.

Yes, attributed stock counts.

hey, if she was living out of her car..... (How far has the IRS ruled, relative to what constitutes a principal residence along those lines? Can a principal residence be a van down by the river?)

Isn't the 180 days technically measured from the date the participant gets the 402(f) notice?

I'm mildly curious as to who authorized the payment of the plan expense from the forfeiture account, acknowledging it may have already been built into the service contract for the recordkeeper.

Amend the plan before those people enter on 1/1, and those folks can be subject to the new schedule.

Without a QDRO, is there any other sort of distributable event allowing the participant's distribution to be paid from the plan (and now we're talking PAID rather than TRANSFERRED to the alternate payee) ?

Nuclear war is a concern that never use forfeiture account. Huh? 🤪 Seriously though, if your concern is a plan never using its forfeiture account, then I bet it's failing to follow the terms of its written document. The document should say when/how to use them. (Including an emphasis on when.) So yes, there should be concerns - if the plan was supposed to allocate its forfeitures, then numerous participants don't have the full amount in their accounts as they should. Or perhaps the company took a deduction for a contribution which was supposed to be offset by the forfeitures. Anything they didn't do right is something the IRS certainly would scrutinize upon examination.

but zero current HCEs would be covered, so no big deal if a handful of now-they're-NHCEs don't benefit.....

"HCEs and Former HCEs" seems a reasonable classification to define excluded employees.

And maybe the document has a "If the allocation would cause the participant to exceed the annual additions limit, then...." type of paragraph that would indeed eliminate the need to fund the rest of the match. But yeah, if so, you gotta find it in the text.

The thing I don't get in this - a plan isn't allowed to ONLY permit Roth contributions. Was Ameritrade charging you twice as much to have two plans?

And remember, if it's not REQUIRED, the distribution may be rollover-eligible and subject to mandatory 20% withholding rather than a waivable 10%.

...right, the problem is compounded if an ADP refund turns non-catchups into catchups even though they're below 6% of salary. Now the previously matched amounts are ineligible to be matched as a result of the re-characterization.

Does the participation agreement for each sponsor address it? That feels like something where any discretion you might have, may already have been addressed within the tiny print.

As of his rehire date, there is no loan. Let the guy do a QPLO makeup by his tax deadline, perhaps?