Bri

The 204(h) notice is certainly an important part of the process. Are you using a document provider? You might have access to some boilerplate language for the changeover, but specifically referencing the required grandfathering of protect benefits.

I can imagine "the worst part" being, you check the balance every day, but because it's in mutual funds or pooled separate accounts, the first day it shows as $6998 and the sponsor tries to force it out then they'll find at the close of business they're back to $7004. But that's because I ascribe to the idea that the value when it actually occurs is the value that matters. I remember when the 3,500 law used to say that once you crossed it, it is deemed to always be crossed regardless of market drops. I wouldn't mind a ruling clarifying that if it were under the limit within the last 30 days or something.....

Details seem scarce here, but if you don't agree with what they put, don't sign it until/unless they can explain it. Because the DOL won't go after *them* if there are errors.

Thanks, guys - I think the better reference actually ended up 1.401(a)(4)-4(e)(3) for the BRF details under the nondiscrimination regulations rather than the coverage ones.

Hey, could that be interpreted as a new-fangled amendment increasing benefits, because it helps the ADP Test?

LTPT doesn't have the same grandfathering rule as the auto-enrollment.

I suppose it would depend on which way they transfer, if any of them indeed do! Anyway, I'm not involved with the client, this was the boss's request to check on, as I was really wondering if having one plan with MAE suddenly suggests the need to test that against a grandfathered plan. In theory that "might" (ha!) be the only real practical difference between the plans. (I also have no idea why they'd balk at just sweeping them up into the existing plan, to be fair.)

They bought a group of stores they want to keep separate from their primary line, I guess - I got the question from top management as to how the 410b6C was going to come into play, whether they wanted to keep the acquired employees separate, so when he mentioned they wanted to give them a separate plan but mirror the provisions to make 410b easy, the question of the auto-enrollment and whether that would count as a BRF sorta bubbled up.

Client wants to set up a separate plan from its current existing 401(k) plan, in order to cover separately a new group of employees whose employer they'd purchased. Twin plans, so to speak, they'll have all the same contributions options/investments, etc. But, as a new plan, this one's going to be subject to mandatory enrollment, right? The other plan's grandfathered as not to have it, and they don't plan to change that. I don't recall auto-enrollment being something subject to BRF testing. But can anyone confirm/refute that for me? (Leaving aside for now what would actually be tested - there could be new owner HCEs right away, before we suggest these will all be NHCEs off the jump.) Thanks. -bri

I was short a few the last time I renewed, they told me just to make it up in the next cycle, so I think I ended up with like 40 hours just in calendar 2022 or something like that.

The amount of annuity room "used up" in the conversion is done at the 415 rates, not the 417 rates. Otherwise someone could bifurcate and suggest they get the lump sum for an annuity portion (calculating under 417 to the same number as the full 415 limit would have) and then also expect an annuity stream for the difference.

The SMM might technically only need to go to the one person let in early, but as a part of the full plan document, a very ambitious employee could of course request access to it. (Likely? No, until it happens.)

Well that's a fantastic "out" for your situation, then!

Although you have a uniform formula, it's based on a "non-compliant for 414(s) purposes" definition of pay. The usual parallel would be with a pro rata PS allocation that fails 414(s), no?

Aren't fees just negative gains in the grand scheme of things? (I'd net them out.)

I'm the type that would say, despite the CPA deducting it, this is the real pay that's supposed to be used for 2024, and then you'll end up with a similar issue when you calculate the plan-pay for 2025 as you'd have to deduct both. If those "what they really should have been" numbers don't give you adverse plan issues (underfunding, running out of deduction room for 2025, revised 415 limits affecting the formula, etc.) then stick with your own calculations? Clearly under audit the IRS would make you re-calculate it to remove the deduction, anyway.

I suppose you have update his net wages for the AAC to not include the deduction - does that flow through to the MRC?

Plan document may also spell out some finer points regarding how the measurement period is defined, at least in terms of whether there's "discretion" for the employer in how it will set its hours-counting procedures (specific to the crossing-plan-years topic)

I'd guess they'd interpret that you get the 7900 plus the specific gain/loss on that 7900 in the last two years. Some intricate trust accounting, perhaps. And probably equivalent to saying it's the 10000 minus the (1500 plus its separate gains)

Should be, especially if these weren't brand new HCEs (like the owner's kid, since no pay in the lookback year) getting an accelerated benefit like that.

The second company certainly could become a participating employer to the plan. There'll be arguments for/against separate plans, but it's "easy enough" to do.

The hassle, of course, will arise when either LTPT (long time, part time) employee becomes eligible for deferrals only, and you have to set up the account for him/her.

They owe it to you one way or another, although most sponsors will throw it as plan benefits where possible to avoid running payroll taxes on it. If it's not going to be a match as you're not signing up to do 401(k) from your paychecks, for you they potentially could make it your "profit sharing contributions" for the year. Again, it avoids the related social security/medicare taxes, but you'd get your prevailing wage obligation through the plan that way.

There is, although I don't have a copy myself. It basically parrots the language in question 33a of the EFAST FAQs. Someone here should have a Word version or something readily shareable.

It's listed as 2024 Applicable, 2025 Applicable, etc., with a separate table for each year.