Bri

May a plan indicate that one particular employee gets his own definition of AE separate from everyone else's? I suppose another thought would be to increase the guy's benefit via -11g so that the 2023 lump sum of the new benefit equals the previously-calculated amount on the old benefit. Then that could be an extra accrual for the guy which who knows, might help your testing.

By the way, did they flesh out the timing rules on that? Company match could go in as late as 10/15 the following year, but participants aren't going to wait to see how it affects their tax returns they filed for 4/15. I'm suspecting it's the date of deposit, rather than the as-of date of the allocation, so that 10/15 match deposit the following year doesn't count as something for the previous 12/31.

Sounds like 267 is the right answer. Either use Box 1 plus the salary deferrals or use Box 5 plus the S-corp. medical

Wow, this topic wasn't so popular! Anyway, what if I mentioned that the document for the plan covering 10 of the 11 controlled group members has the TPG election. Then maybe the other plan for the other entity simply has an improperly-completed AA document error?

Nah, once you blow past 20,500 any deferrals start filling that catchup bucket.

Does your software back-calculate the total number of years each time you process the eligibility? Or does it potentially just increment by one, on top of the prior year's calculated total? If the participant was in between 800-1000, then the software may have kept her with 0 years of eligibility service as of 12/31/2021, and then not given her a year for 2022 either because of the <800.

So, it's known that if a client makes an election to use the top-paid group for HCE determinations, it needs to use the same election across all plans of the employer for the determination year. But what happens if separate plans from related employers have conflicting elections? I would suspect that since not all plans actually include the election, then the election is invalid and everyone over the pay threshold will count as HCEs. But it'd be nice to have something to point to. Does anyone have anything reliable for that? Thanks. --bri

The 6,500 in catchups don't count towards the 415(c) annual additions limit. So that total is really just the 20,500 plus 1,100.

I'd also surmise that the change in sponsorship comes with assuming all the plan's assets AND liabilities (meaning, the pending receivable contributions).

Well the VCP fix might be just to merge the plans back together (hopefully they weren't simply avoiding an audit requirement this way, too). Sounds like they only really meant to change the investments available for participants.

...and it's probably, as CBZ indicated, *immediate* upon rehire. (As opposed to waiting for the plan's next normal entry date for newly eligible folks.)

What should be the pro-rated limits on a one or two day long plan "year"? Or, a "plan day" as opposed to plan year!

One provision indicates what you need to qualify for a contribution (0 hours). The other provision tells you how much you'll actually get if you qualify (167 a month, essentially). It's easier than defining 12 different groups getting 1/12, 2/12, 3/12, etc., for groups of employees contingent on their month of termination. But I don't see a disconnect in their logic.

My wife got that email as well, since I actually prep her 5500 on the iFile site every year for her to sign.

Plan participants need (or at least, are required to receive) that information regarding the investment of their benefit funds, so I'd say yes.

A line parallel to y = 4x + 6 must be of the form y = 4x + C for some constant C as parallel lines have identical slopes. Since (5,10) is on this line, C is clearly -10 as the line must be y = 4x - 10 to get that ordered pair to work. And the line crosses the y-axis when x = 0, so y = 4(0) - 10, or at y = -10 *beep*

Safe harbor is required by statute within 12 months of the plan year end. So 2021 SH amounts may be deposited currently. Tax deductible deposits are due by the extended corporate tax deadline. So a contribution now for the 2021 SH can't be deducted on the 2021 return. Annual additions for the prior year are due within 30 days of the extended tax deadline. So if these SH amounts are going in now, they can't be 2021 annual additions, either. But hey, maybe having 2 years' worth of SH amounts in your annual additions helps this year. (And good luck if it was meant to be there as 2021 annual additions for that year's testing.) And I punt on the issue of someone not having any 2022 415 comp but needing a 2021 SH amount to post as a 2022 annual addition. Punting works better than a schoolyard lateral play.

It's normally done when the new plan year is made, it'll typically fill in the end date as 12 months forward. If you're too late (you've been posting stuff all year and find out later it'll only be a 9-month year), then I think you have to go into the change system IDs under utilities.

Are there any NHCEs getting the squeeze here?

They're great to include in the testing with an allocation/accrual rate of infinity. Hard to fail with that kind of math!

It will depend on the allocation formulas in the cash balance plan. If they're a "safe harbor" methodology (as opposed to different groups getting different amounts) in each plan then a straightforward 410(b) test should suffice. Of course they might WANT separate CB formulas, which could then lead to preferring to making employer contributions to the 401(k) after all.

I'll be interested to hear how the resolution to this suggestion might parallel the typical advisor office's voicemail message saying that trades left on voicemail can not be acted upon.

I suppose this looks different if the person's filing unincorporatedly, as opposed to an S-corp where he sets his own reasonable compensation number for his W-2. Was just thinking about a prospect whose Schedule C is jumping from 40k to 240k but we have no sense yet what the person expects in future years. Thanks!

Maybe just figure out a good minimum CB principal credit rate based on the age of the sole proprietor (3% if young-ish with a 5% ICR) and apply that to all the compensation. At least that way it's probably easier to squeeze the text into a checklist!

I'd be worried that if one suggests they only get the vested portion, that would hint at perhaps the plan didn't do something with the forfeitures earlier, when it perhaps should have by now. But the plan document can confirm that - the timing of, and directed use of nonvested amounts.