Bri

And of course, an optional in-service withdrawal would be an eligible rollover distribution with 20% withholding. A real RMD would not be.

Is "prime plus one" hard-coded into the loan procedures (or document) for the plan? Or is that just "what you normally do"? (I'm thinking of a "failure to follow the plan terms" operational error.)

Does everyone bring the dollar amount of the bond out to the nearest 10% dollar, then? I always wondered if the DOL looks and says, "Wow, a bond for $185,234...."

Sounds like vendor/platform issues, perhaps? I usually tell them what they've got coded wrong in their systems, when explaining if they're doing it wrong.

I recall at the first ERPA conference in Chicago in 2010, that we indeed did get an hour of credit for learning about how to get more CE. The woman from the IRS (I think it was Deborah Lorning, but not sure) mentioned she's not sure she would have approved such a class after the fact.

And if it IS a controlled group, the DB plan MUST cover both of them (for 401a26 purposes, presuming no other employees to consider)

I usually find that box 5 includes the 401(k) but not the SubS health, while box 1 has the SubS but not the 401(k). So it ends up being neither number.

Exactly. I think he's stuck until age 70½ or he re-retires. I suppose he could get creative and borrow half....

Is the sole prop the only key employee? If so, then if no Key is getting any annual additions....

They can apply a contribution as annual additions for 2017 as long as it's made with 30 days after their tax filing deadline. (415 rules) If so, they could take both contributions as a 2018 deduction, but I believe both amounts would be combined for the 404 calculation on the maximum.

I'd like to examine that "half a month" concept further. Does an 11/30 plan year end only have until February 14th? What if the checks are written before noon on the 16th? Having a plan checking account would have at least let the plan issue checks on the 15th, and worry about truing everything up with the custodian later....since I'm sure that's what the IRS would want to see under examination.

If you're missing only a handful of people, does the "feature" of early contributions nevertheless pass 410(b)?

I would have done this, with A1 = deferrals and B1 = pay =MIN(A1*0.3334,B1*0.023338)+MIN(A1*0.6666,B1*0.026664) Similar to how I code basic safe harbor match calculations. Here, it's a 33.34% match on the first 7% deferred, plus a 66.66% match on the first 4% deferred. No if/then needed.

To Tom's point - I suspect they were "needed" to satisfy the safe harbor requirement because for the first month-plus, the plan was still operating under the safe harbor rules. So I might be a little more leery about suggesting no safe harbor rules needed to be followed for the plan year....which, sure, then would open up their use.

I've got a plan that is not top heavy. In year 2, the owner realized the safe harbor 3% contribution was going to be too much of an expense. The notice had the usual "we'll warn you at least 30 days out if we suspend the contribution" language in it, and indeed we amended in January 2017 to eliminate the SH, and the employer made the 3% deposits up through mid-February. So now - I haven't run my ADP test yet, but I'm curious if the plan does fail, would I be able to use the seven weeks of safe harbor contributions in my ADP test? Since safe harbor contributions are technically qualified, I suppose there's a shot of dumping them into the test. Anyone try this before? (I haven't thought this out completely yet, but I presume I'll have the owner's own 3% amount working against me.) The safe harbor was the only 2017 contribution beyond the 401(k). (So I definitely don't want the owner having any QNEC outside the 401(k) test.) If there's no regulatory hangup to it, I'll then double-check my plan document to make sure there's not further restrictive language. (So at this point, I'm looking for at least theoretical justification.) Thanks.. -bri

That's one of the good results a "safe harbor contributions only" gets you, though. Only 3% of half the year's pay. Or a $0 match because the participant made no deferrals. (And yes, sure, there could be other circumstances that cause this not to hold, but if it's a single employer's only plan, and as "plain" as you're representing it, you should be good.)

Make sure you play where you auction off any properties the die-roller chooses not to buy. The first time my dad got a property for $1 was the last time I missed that rule.

I just looked at the Code, hoping that it would say something like a plan where "the only EMPLOYER contributions are...." but it doesn't say that. (Meaning, EMPLOYEE contributions might have been a loophole. But, apparently not, indeed.)

I was going to say, I was the Relius guru in my prior jobs. Started at an ASC firm 3 years ago. ASC is a lot like using PENTABS, the old DOS precursor to Quantech/Relius. But I don't have any inkling on the cost differences. Especially if you have to factor in re-training everyone on a new system. If I started my own firm I'd choose Relius, though.

Isn't there THEN usually something where the TPA or custodian being abandoned states that they will no longer sponsor your prototype, thus making it (as of the date of termination of service) into an IDP? So the plan sponsor needs an 8905 right away....so they're not on IDP restatement rules. (Haven't thought about it in the context of the no-more-5-year-cycles)

Is the "account balance" the PVAB regardless of whether it's fully funded or not?

Our prototypes have always said each participant is his/her own group. So if I want 35 different rates for all 35 different employees, I say I'm good....assuming I pass the usual testing.

Can I please just have everyone agree with this statement so that I can link to it to show the non-believers in my office? The restriction on the number of allocation rates in a cross-tested plan was specifically dictated by LRM #94 and was solely applicable to get a prototype document approved during the EGTRRA cycle. This has been removed for the PPA cycle. And nothing in the 401(a)(4) regulations themselves even make mention of this, thus meaning PPA documents are not limited to the number of groups or rates available, nor are plans operating under them expected to comply with such a restriction when running 401(a)(4) tests. Thanks --bri

I find the more appropriate question - how about an SAR for someone who was a participant but terminated and took their money? I terminate and roll my money out in January 2016. Now it's December 14, 2017, and the plan sponsor owes an SAR to all plan participants for 2016. Hopefully I haven't moved twice. I wish we could apply the idea that if someone's already paid out by the time you'd report them on an 8955-SSA, they don't need to be listed - apply that same logic to the distribution of the SAR.

Is the contribution non-deductible specifically, because it's over the 404 limit, or is it just non-allocable to the participant in question? Could the amount be re-allocated to other participants in one form or another?