Bri

And if it's a brand new company, too, then all the non-HCEs are carved out of the ADP test, leaving you with just the owners/spouses, possibly, to square off against the zero NHCEs in the ADP arena.

They probably do, although we're not privy to the details. We're just local to this one business that eventually got swallowed up the merger/acquisition ladder years ago - US headquarters are hundreds of miles away. Assets are fine, they just now had their first minimum due in years. (Only about 125,000 in assets, annuities have run around 20-25k each when retirees do hit 65.) So they shouldn't have to worry about having leftover funds.

I've got a plan that's been frozen "forever" - the plan sponsor was taken over by a multinational corporation long after the plan was frozen. Everyone's been terminated since the late 1980s, I believe. The plan has no lump sum feature, and payouts (commercial annuities purchased from trust assets) start at NRA of age 65. Or, early retirement (.5% reduction per month) starting at 55. At this point the last 5 folks are all in their late 50s / early 60s and could elect to begin payments if they want. Unless the plan sponsor elects to terminate the plan sooner, they could potentially keep the plan open until the last person turns 65 in a few years. If they wait, what's the typical reaction of the PBGC when you file to terminate a plan with 0 participants left? Will they want to see X number of previous payments to participants not connected to the plan termination? Or are they more likely to figure with no participants or assets, and the final premium payment in good order, that their file would quickly and easily be closed with the plan just going away after the final 5500? Thanks....

I'm just here waiting for Larry's tone when he just tells you to get a payroll provider who will accommodate both! ?

I think excess GTL (gym, tan, laundry?) is the usual "obvious" difference between 3401(a) and W-2 wages. If your plan's using 3401(a) I'd suspect you exclude it then.

1. For all reasonable purposes, yeah - if the balance is less than 100,000 then the 50,000 loan maximum isn't going to apply. 2. The IRS had a minor announcement last year that either way is acceptable to calculate it. Since the Plan Administrator gets the final call as to what's permitted, then they need to tell the recordkeeper that the plan will use the "highest loan balance on any one day in the last 365" method.

The plan shouldn't care what the employee is doing with the distributed funds (other than trying to roll them over). My hunch is this is gonna be okay, but I'll see how others chime in. The yellow highlighted text references the next sentence about not worrying whether or not there's any basis in the RMD payment. Even though it's not a basis issue, the plan is paying what it needs to. (Does the 1099-R even go and reflect nontaxability? The nontaxability of it comes outside the norm.)

Not for nothing, but the RMD delay might be the only reason I'd see setting up an owner-only plan with a vesting schedule at all. I mean, when he terminates the plan it's going to make him fully vested anyway if he hadn't hit 100% by then.

Ah, indeed that's not so obvious from the instructions. I would probably enter 0000000 to try to get around any validation issues, but that's nothing I'd stand behind as "correct" certainly.

It's last year's number they want, though, right? Like, for my 2017 Form 5500s I'm using the PBGC number for the 2017 filing that was due 10-15-2017, not the one due this Monday.

Yeah - it's the VFCP that gets you out of the penalty tax.

I took a quick peek at my Sal Tripodi books, and there's an argument made (in the section on safe harbor plan document requirements) that this simply expands the coverage of an already-existing safe harbor plan, and that this might be interpreted as being similar to a case where a bunch of employees suddenly have a December 1 plan entry date through a plan amendment, for instance. (This was the 2012 version, though.)

Just wondering how everyone out here would view this: Plan is a large employer. There's a 50-on-5 match, payroll period basis. Not safe harbor, and they do choose, operationally, to make the match deposits each week. Everyone's deposits for 2017 were fine except somehow, an owner's missing one week's worth. $375 in 401(k) deferrals and a $187.50 match. (He's salaried and these amounts were consistent every week.) If this were a small plan, they'd have the 7 business day safe harbor. Since they are prompt with their deposits, there's at least some sort of argument that, "Hey, we *could* say one deposit was 30 weeks late. Or we could say that the next 29 deposits were all 1 week late - but within 7 business days." Anyway, that's not exactly where I'm going with this one - I would like to at least suggest that the fact that the guy's been getting match contributions all along, that those almost serve to "cover" the 401(k) amount due by the deadline for the deposit. At no point during 2017, was his account underfunded relative to his payroll withholdings. The plan sponsor has a requirement to keep pace with the funding of the deferrals, and not the match (which could be deposited up until tax filing day in 2018). I suppose a potential snag is that if this "early money" went in before the paycheck that was missed, then it could be construed as accelerating funding of the plan. Can you tell I'm trying to avoid reporting $375 on the 5500 and preparing a 5330? :) Thanks.

I'm going off on a tangent here, but the instructions do later say that if there are still assets and participants, then you don't mark the box as the final return - such as the case if you've got a plan that has become eligible to file a 5500-EZ instead in the future (like a sole prop who previously had employees in his plan but there are none anymore).

Nobody's going for the "change the definition of compensation for 401(k) purposes to exclude paycheck three in a month" argument? :) Inclusion ratio and all!

Can an -11g amendment be used here? Increases benefits....you could do it in a nondiscriminatory manner (only pick NHCEs who already have balances? is that a contingent benefit issue?) spitballin' out loud to myself on a Friday afternoon.

I got the QPA (QKA didn't exist yet), and then got my CPC at my next job within a couple of years. Testing setup was definitely different, though, back when there was just one C-3 and C-4 exam to take instead of any modules, plus getting letters of recommendation (from my prior job!)

I've seen docs (ASC, not FTW) that provide for an optional true-up at the employer's discretion. So it may come down to your specific text, as to whether or not the plan would allow it, (as opposed to it having to fall under the scope of any additional match contribution rules in your document)

If you hurry!!!!!! you can still have it be a safe harbor plan :)

To Appleby's point - the document itself may have language in it that "cancels" benefit accruals if common law employees meet the eligibility....but not necessarily so it's definitely worth a look.

When in doubt, have the payroll company transfer the withholdings to a plan-named checking account. At least that way you're around the lateness issue with the prohibited transaction, dealing only with (only!) the fiduciary issues of the trustee having the funds but not having them in the participants' accounts. I would suspect then that the delays with the platform are more "forgivable"....

Well.....same filing, different version. 5500-EZ version 1.1 rather than 2.0!

I don't think that's true, because if you have employees past NRA, the actual table affects how much the succeeding APRs decrease after that age. It's not like a 66 year old's APR would be always, say, 97% of the age 65 APR. Which, if we're splitting hairs on EBARs out to five decimal places (thousandths of a percent), can make a difference.

If you have a short plan year, too, then you can get 5500 Bingo if you later amend the return. (Extra points if on extension.)

I think 1 is easy, not particularly different from showing that a DC plan contribution does a similar thing. And for 2, a parallel could be drawn to a DC plan with an NRA payout policy, too. (Sure, nobody's plan has that any more, but it could). It's a construction company, so turnover's pretty common. I suppose we'd let terminees (of course we'd use 100% vesting since we'd be using D-B money) take their lump sum or equivalent annuity sooner than NRA. (Maybe not too readily, since the seasonal nature of the industry tends to lead to rehires.)