Bri

Well, you don't have a case where money was withheld from a participant's pay and held onto by the plan sponsor. But rather the money wasn't withheld from pay at all. So I think that takes it outside the range of that question, since they're not so much "participant contributions".

I would probably review the plan document, just to shore up the wording of "payroll period" or "per paycheck" basis, how it exactly states that the match gets calculated. I could see an argument for either answer. And then if it's still open-ended, the Plan Administrator has to make the call, and stick with it as it might affect each individual participant going forward.

I, as an ERPA, get to pick the beer for the office on Fridays. But really, I think it's just stuff like that....VCP applications, determination letters, and audits of plans other than any actuarial calculations.

So the amounts being used to repay the loans aren't being included in their taxable income each week? (Either fringe or not)

What's the actual problem? Starting the successor plan too soon? Plan 1's termination at least provided a distributable event for the rollover.

Good point, Tom - I was still thinking in my head of a plan where there was going to be extra HCE PS anyway (like a "3 and 9" setup).

I'm not sure why you'd give any "little bit extra" as safe harbor rather than just profit sharing. At least as PS, you could impute disparity on the rate in any potential 401a4 testing

Then the excess portion represents an ineligible IRA contribution - get it out of the IRA with its allocable earnings

Personally, I think of GTR. When the heart rules the mind....

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.)