Bri

I'd think that'd be enough - the last thing you want is to file a 5500-EZ for a 002 and make the IRS inquire as to why there has never been (not even a final filing) a 001.

To be fair, the original poster liked having those PS amounts in his testing - seemed like he was happy to run just one test rather than disaggregating.

If anything, you'd only multiply the FT by the 1.5, not all of the terms there. Of course there are other factors that can be involved, but in a simple case those might be all zero.

I bet the plan's document itself also is going to prohibit this. I wonder if the attorneys are thinking DB plan reversion....

Nah, that's not *too* different from a standardized prototype's "500 hours OR last day" provision. But sure, why "almost" guarantee 410(b) will pass, but require the 1000 instead?

I don't think there's a difference in that case. If the match formula applies to regular plus catchup deferrals, then you still determine if there's "related" match on the overall amount, not the amount that was the net number in the ADP test itself.

415 limits for DB plans are discussed at 1.415(b)-1 (This won't help illustrate the calculation turning their pay credit into the accruing benefit to compare it to one's limit, though.)

Yes, you'd include everyone, and so it sounds like everyone'll be getting gateway.

You have to pass your testing after the plan amendment, based on whatever the lowest eligibility was that let those three people in early. If they were let in immediately on hire, then the one HCE and 8 NHCEs from group B who weren't let in are non-benefiting but non-excludable. If you let the three folks in early after, say, 6 months and age 19, then those are the parameters for your coverage testing. And some from group B may not be benefiting (we know of three who are) but you no longer can exclude those from the testing itself. But some even-more-newly-hired folks from group B may be just as excludable now, too, because they wouldn't have met the more lenient parameters you let those three slide on.

If you throw your numbers out here, one of us can probably spot-check and find your discrepancy.

That's okay to do. DB plan still shows it as a code G rather than H since it didn't start as a Roth account when it left.

Here's a clip from 1.410(b)-7: (3) Plans benefiting otherwise excludable employees. If an employer applies section 410(b) separately to the portion of a plan that benefits only employees who satisfy age and service conditions under the plan that are lower than the greatest minimum age and service conditions permissible under section 410(a), the plan is treated as comprising separate plans, one benefiting the employees who have satisfied the lower minimum age and service conditions but not the greatest minimum age and service conditions permitted under section 410(a) and one benefiting employees who have satisfied the greatest minimum age and service conditions permitted under section 410(a). See § 410(b)-6(b)(3)(ii) for rules about testing otherwise excludable employees. Since elapsed time doesn't require the 1000 hours, your plan doesn't use the greatest minimum age and service conditions permitted, and so I think you've got an excludable there.

It's not that you would have to let "everyone else" into the plan, it's just that you have to use the most liberal eligibility provisions in your coverage tests, so suddenly you'd potentially be facing several other non-benefiting folks if they were indeed not also let in. (But then hey all these folks might be tested as otherwise excludables, too....)

There's a "paper's okay" exception if the sponsoring company doesn't file more than 250 returns of any kind, I believe.

Does the short plan year affect anything that's trying to be accomplished - does the plan define the limitation year as the plan year, or as the calendar year, for instance?

The statutory definition in 410(a)(3) references 1000 hours in the 12 months. I think he's still excludable if you can prove he hasn't done that. The plan's definition of a year of service isn't relevant for testing, other than who's a participant or not.

I'd say yes, he's in your test and needs gateway. But if you test otherwise excludables separately, then perhaps he's not in a test with HCEs. No gateway needed in that scenario, just a one-plan THM.

Is it related (or "orphan") match, perhaps? An example is a plan that matches 50% on the first 6%. If your ADP test refunds brought someone's deferrals down below 6%, then they don't get to have the match associated with the refunded 401(k). That's different than an ACP refund, though, where you're supposed to apply the vesting percentage. In this case it's a forfeiture meant to prevent the HCE from having a net higher rate of match than anyone else.

1. Confirm plan was actually terminated by company action, like a resolution. So that 2019 is really the last year of the plan, rather than it continuing to exist with $0 assets. 2. https://www.irs.gov/retirement-plans/penalty-relief-program-for-form-5500-ez-late-filers has the steps for what/how to file and pay the much cheaper penalty.

The basic gist explained in that Sal section (including crossing plan years) is how and for what year you count the compensation as 415 earnings. If that's 415 compensation for 2021 then you'd include her in your 2021 test.

Was it a matter of there being no such question they *could* have answered as "individual groups", or did they just not find that question and tried to replicate that type of provision elsewhere in the AA?

I've wondered, too, why nobody's brought this up for confirmation via public comments to the IRS. Seems like plans offering both would have to pay double compared to those that only allow pre-tax.

And then I suppose it becomes a reportable issue on Form 5500, as a failure to provide a benefit payment when due (10f on the 5500-SF)

I'm just spitballing here, feel free to shake me out of the tree. If the plan holds all the stock to the sponsoring company, then if late deferrals are still commingled with the sponsor's general assets.....

If they later turn out to be a 415 violation, correct them thusly.