Bri

I don't believe the "last day" part affects eligibility so much as allocating contributions, but if they never even became plan participants, then you're okay. (As opposed to, they did become eligible but didn't get a contribution because of that last day rule in the plan.)

There's no true-up required. I have seen documents that give the sponsor the option to true up (nondiscirminatorily) but since the allocation period is specifically each payroll, no true-up would come into play normally.

Sorry about your Mets after this weekend.... Truing up the match depends on: a) What does the plan document say about the calculation of the match? If THAT says it's a payroll by payroll calculation, then there's no truing up. If the plan says it's an annual calculation, but it just happens that the client funds it ongoing week to week, then a true-up will be necessary. b) Is the person opting to contribute partway through the year someone who was already eligible all year long, or is the midyear point their actual plan entry date? This only matters if the answer to (a) is that you have to true up, and then if so, you'd go back to the later of 1/1 or their actual plan entry date. c) Whether the plan defines compensation as the full year's worth, or just from after the participant's entry date. As for the compensation, it's not unheard of to adjust like that, but you obviously have to run a 414(s) compensation inclusion ratio test. Who, besides sales staff, would have commissions, though? You have to sell something to get a commission

Ignore the pay beyond the 401(a)(17) limit in every single year. His formula will be based on 290. But his 415 limit will be based on an average of 280+285+290, so depending on if this is a max accrual formula there could be an override in play. Does your plan document's definition of Compensation or Average Compensation have language referencing 401(a)(17)?

They're talking about Title I of ERISA, meaning it covers actual legal employees rather than only a sole proprietor or partners. This basically means it's under the umbrella of the IRS only, and the IRS's penalty relief program is the "comparable" to the DOL's program for late 5500-SF and 5500 filings (plans covered under Title I, with employee participants). A Title I (or, as you might, "ERISA") plan with missed 5500s has a DOL-run program for missed filings. This IRS version is specifically for the solos, since they're outside the DOL's jurisdiction in this case.

Tom, that's true. It's just that there aren't any 2021 supplemental schedules for the 401(k) plan's return to include with the first 2022 plan year's filing.

I was thinking out loud, if she were in an ineligible class, the plan still wouldn't have a 410(b) issue without any contributions being allocated. And then there would legitimately be only one owner-only participant covered under the plan. I might want to do extra reading on the idea of the plan preserving benefits for a select group of HCEs simply because I can't remember off the top of my head whether that description arises in a situation similar/identical to this.

The CB plan will need two Schedule SBs for 2022's filing, but otherwise, the SECURE act does let you skip the first year's filing on a post-year-end adoption.

The freezing of the plan would have had to freeze eligibility for participation, too, as opposed to just new contributions. I think you've got an actual participant there in the employee. Did newly freezing the plan also put the employee into an ineligible class?

So, we all know the SAR is typically due 2 months after the 5500 deadline. But is that 2 months from the "real" deadline of 7/31, or is it 2 months from the 8/1 date that came about from 7/31 being a Sunday? And hey, 10/1 is a Saturday so now can we go up to the following Monday 10/3? 💣 (blow your mind!)

I'm peeking at the instructions, and I am deducing that they don't go on 4a, because that is for participant contributions. But 4d looks like the right call, since it's still the same kind of prohibited transaction when the employer is holding onto plan money. And if that's the case, I think you do a 5330 very similarly to one for late deferrals.

He probably should, even, just to avoid the successor plan issue. If he's 100% owner of both entities they're clearly related.

Come to think of it, does "consistently" in the 5500 instructions imply that the method stay consistent from year to year? Or do they just mean to be consistent within each single year, not reporting some assets one way and some the other.....

I always thought you should be able to make a QNEC on 12-29 if your YTD payroll is done, you test using prior year, and you know you're about to fail.

This might be simplistic, but I look at the "standard" determination as being under the 417 lump sum segment rates, and the "alternative" as being under the "maximum deduction" 404 segment rates. The PBGC sets the month for you on the standard calculation, while the month under the alternative calculation depends on the funding lookback month you might be using.

Yeah, if that last six percent is going to be offered in March for the CODA election, then that's going to be 2023 wages and so that year's W-2 to report any deferrals on.

Well, I'd start with figuring out what year's test has failed 🙂

I would suspect the rest of the backdoor Roth conversion would be for the 25% profit sharing contribution.

I see this in the instructions (2021 SF): Part III – Financial Information Note. The cash, modified cash, or accrual basis may be used for recognition of transactions in Part III, as long as you use one method consistently. So......do you even GET to change if you start off with a cash basis?

Possibly. But your plan document can't have any overriding failsafe language, where if you end up less than 70% then the terminee automatically gets swept in for a contribution. And it's not that everyone's in their own group, but just you would use the amounts the "normal allocation formula" (integrated) would give everyone, and do the cross-testing from those.

Because he's not excludable under the coverage and nondiscrimination regulations, I suppose. But seriously, though - Does your plan allow 410(b) to be passed via the average benefits test instead of the ratio percentage test? I'm getting the vibe that you've got 2/3 NHCEs against 1 HCE. Although that's less than 70%, you could potentially be okay perhaps with a cross-tested rate group.

I'd make sure your plan allows assigning individual expenses against individual participants, but if so, you'll just assign that fee to everyone affected, see what that does to their account balances - seems like it would zero many out - and then since you have a pool, you can compare these adjusted (after the fee) balances against the assets to figure out whether the trust has a net gain or loss to then spread across the remaining balances. Of course, if you're assessing a fee, you actually have to pay that fee out of the trust assets. You can't just "say" there's a fee to drop the balance to $0 if no such actual transaction was levied against the trust, I suppose.

What part of "we" are you? The TPA, the sponsor, etc.?

Who sang that. (not a question)

Well, you used to be able to file one-participant plans on an SF, though. Checking the "one-participant plan" box was supposed to prevent it from showing up on the public disclosure site. In which case maybe the plans shouldn't be viewable, but probably that doesn't rise to a real "issue". Under penalties of perjury, the sponsor didn't say it was a one-participant plan on the return. Gasp!