Bri

I was trying to skim through my EOB, and I thought it was suggesting you can get away with no gateway, if the cross-testing is specifically just to pass the rate groups, rather than the overall average benefits test.

Right, you pass coverage but not necessarily nondiscrimination because it's a different nonelective contribution rate for different folks. Failsafe language in the document wouldn't help because you're not failing 410(b). So if your ABPT is a nonstarter in terms of hoping to pass, you're going to need to fix the rate groups for the HCEs by increasing the profit sharing for those NHCEs who got zero. Basically each HCE's rate group is 1/3 NHCE and 2/2 HCE based on their total nonelective contribution amounts. And yes you can impute disparity, so I think it should just mean a 7.38% PS rate for the zeros so that you get to 3/3 NHCEs. (2/3 NHCEs would have been okay if you could pass the ABPT but it sounded like those spousal deferrals are killing you.) Or, for another tack, you could try to cross-test the nonelective contribution amounts by themselves and hope you can pass both rate groups at 3/3. If all the rate groups are at 70% then you don't need to pass the ABPT.

It's not uncommon for a TPA to give a sponsor options - plain 3% SH, a "3 + 9" where it's exactly as you describe, and then a "5 + max" for small, medium, and large contributions.

One thing on this topic I never had fully spelled out - Let's say the guy has a 250,000 account balance and the RMD would be 10,000. If the plan is subject to QJSA and there's no consent, does the plan then take 10,000 and buy a taxable annuity? So the participant gets a 1099 for 10,000 in taxable income up front, but the annuity provider will then return to him some smaller monthly amount, maybe 100 a month, for the rest of his+spouse's lifetimes? (With those subsequent payments then no longer subject to further taxes since they were part of the annuity purchase.) The plan can't self-insure the QJSA so what's an alternate process for this situation?

If he has a W-2, that's the amount to multiply by 25% (not 20%). Should be 6,375. Of course, since that would be a 415 problem, he should limit the PS to 6,000. You definitely don't do self-employed calculations for an S-corp. shareholder as you would a Schedule C filer.

If the two firms didn't form a controlled group (including the laxer criteria for 415 purposes) then this would be fine to do. My old firm once had a client where a guy owned several restaurants but had a different partner for each one and it allowed him the 415c limit several times over.

In. Especially if you said he's actually receiving a 2021 allocation. Which he should, as that's still "415 compensation" for 2021 under your plan's definition. Definitely not excludable, since there are no allocation requirements to receive a contribution.

I think you're fine - "It's not discriminatory to stop discriminating."

Probably, if it's being issued under Code E for an EPCRS-related correction.

Thanks, Luke - That's what I was finding as well, that it only seems to get "mentioned" relating to 415. Was hoping indeed I just wasn't missing something.

Hi folks. Doctor does some 403(b) deferrals at the hospital. But he also has his own practice. (No deferrals for him there.) I know that the 403(b) deferrals count against the 415(c) limit under the practice's profit sharing plan. But would they also get included in the 401(a)(4) average benefits percentage test for the practice's cash balance and 401(k)/profit sharing plans? Thanks. --Bri

Part VI, #13 on the premium filing form allows you to indicate a final filing, with a checkbox to indicate why. I would assume some filing's due for the part of the year for the time it wasn't governmentally sponsored, right?

I suggest skimming EPCRS for the specifics on getting an Overpayment returned back to a DC plan. If that too was rolled over to the IRA it's an ineligible rollover contribution, so the participant has a reason to at least fix *that* part of it.

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.