Bri

Man, that’s brilliant and abusive all in one 😁

Or, throw it in early for next year.

The key, obviously, is to make the HCE actually ineligible by job title or other mechanism, as opposed to having him be eligible but just in a group accruing $0 benefits.

This had me thinking - if someone's changed from NHCE to HCE, they lose the right to extra gateway. (2 plan CB/PS combo with safe harbor 3%) They'd still get a 5% THM in the DC plan either way, but if gateway was 7.5% less the CB accrual piece, has the right to that been accrued right at the 1-hour mark since safe harbor triggers gateway? The plan doesn't technically HAVE to cross-test if other ways to pass 401a4 can be found. Not that it wouldn't be cross-tested, but it seems like gateway's not absolute, and therefore could be not so much of a cutback.

Oh, so you get 2020's entire income included in the benefit limit calculation, since it's too late to deduct anything for that year. And then you go forward with the 1/31/2021's funding amount getting deducted on the 2021 return? I suppose if you're using calendar-year-within-plan-year compensation, why go Feb. to Jan. and cut it close now, when you could probably get the same basic result with more than just the one month difference between the year-ends...

It's the company's tax year that governs the timing rule.

Maybe there's something in the Contributions/Salary Deferrals section of the document that would address any timing of contributions rule inherent to the document itself, as opposed to an "outside" DOL rule?

So hey, what if there's a first, vested, accrual (in my case, a cash balance credit) as of 12/31/2020 for the owner and no money's been put in the plan by his RBD of 4-1-2021? And does the answer change if the plan was adopted before the RBD, such that "we knew this would be due...." (I expect the RMD to be paid via an in-service distribution of his entire benefit so that he can use the DC method, too, and roll the rest to his IRA. That's got me thinking about an interest adjustment for the late payment, too.) Any thoughts appreciated. thanks. Oh wait, am I okay since the 4-1 date would have been the 2020 RMD which was based on $0 accrued benefits, and then at some point in 2021 we adjust for the new 2020 accrual? Getting my DB/DC RMDs swirling in my brain. -bri

I actually thought you were asking how they were deducted from payroll, which is doable but not actually mandatory.

Legally fine. Any "issue" is HR's problem 😁

The CB plan has an actuarial equivalence definition to determine the monthly benefit. If the plan writes it own monthly checks, there ya go. Otherwise, an outside insurer would charge its own proprietary amount to make those monthly payments. (Higher or lower than the theoretical balance.)

Code 3H is how you indicate a controlled group, similar to how you put 2J for the 401(k) arrangement. And a controlled group is still a single-employer plan, indeed. You may want both of your entities to adopt the plan, though, if they haven't already. Fidelity should have a supplemental page to list adopting employers. I suppose it's your choice which you wish to have be the primary.

Doesn't the plan have to buy a taxable annuity (with survivor benefits) with the single payment otherwise due?

Surprised nobody bothered to confirm that J&S does not apply to the plan.

How about going in under VCP?

If a plan wants to amend its rule for crediting interest to folks taking a lump sum (before: pro rata credit up through payment date, after: no such partial year credit), is that deemed a cutback even if done only prospectively on future distributions? I could argue that my annuity value drops if I won't get that extra interest credit from 1/1 of the year I turn 65 up through the actual NRA and take my dough. But if anyone knows of an exception or if there's been any IRS guidance, that'd be cool to learn. Thanks. --bri

I suppose this ties into the argument as to whether or not to go back to get a designation that's newer but already superseded. I had the QPA before the QKA came along, so what does that really "add on"? (Is it a daily-val section, or something like that?) At least the CPC felt like adding on to the QPA.

I think that in the past, our place's "distribution department" has set up taxable (non-IRAs) accounts for the zero to a thousand folks. (As I recall, we contract with Penchecks for our auto-IRAs, but they could set up non-IRAs for the under-1000 amounts.) So it's basically the same admin process but with a different tax flavor.

Using the carve-out rule, the NHCE is excluded from the test, and you pass by default.

Define the payment timing to be the earlier of NRA or following a one-year-break?

Doesn't EPCRS say to assume the highest deferral rate that gets matched at 100% (so 3% under a SH basic match, or possibly 4% if enhanced.) (Haven't dove in deep to the new version.)

I have one plan we took over with cash basis accounting. One thing that stuck out to me is the "number of participants with account balances" question. Since on a cash basis, that new person with only a first safe harbor amount "on its way in January" doesn't actually factor in to the count on 12/31. Which is at least weird, since safe harbor plans usually match up "number of participants" with "number of balances".

I had an actuary mention to me that her firm's Datair document has the provision that the 110% rule won't apply if the plan has only ever covered HCEs.

But the "amount involved" is the interest accrued on the use of the money from the impermissible loan from the plan to the sponsor. That shouldn't be zero even when the RoR on the late deposits was zero or negative.

As a proud Gen-Xer, I gotta take issue with the daily digest directing me here with a headline that this was affecting "millennials".... 😁