Bri

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?

Is it enough for the plan's trustee to allow the participant's fund choices (on technically-not-yet-allocated-to-them money), under presumption that the balance would indeed be theirs eventually, and therefore it's "prudent" to agree to that particular participant's fund lineup?

Occasionally you can wind up with a poorly-drafted document in a government plan that left the J&S rules in place for the plan, even though they weren't needed.

I would presume 210 days after the year the PPA restatement was effective for. In fact, I'm eagerly awaiting my former TPA employer to send me an SPD for the first time since 2000.

Since I think the amount isn't part of the account balance until it's actually "allocated", you should be able to fall back on the plan's definition of the allocation date. A $600 profit sharing contribution sounds much more discretionary than, say, a safe harbor contribution for the year, where you know that 3% is really due - but if the plan says it's allocated 12/31, then I'd think you could still get away with forcing out the first $4,700 first, before the amount is "officially" part of the account balance.

I'd say yes, the plan has to pay the RMD "first" rather than letting the destination (IRA, you say?) handle it. But if it is indeed an IRA, would the plan document permit him to compute the RMD on a DC basis since everything else would be going to the IRA?

right - if the plan allows distributions beyond a stated age (such as 59.5 or NRA), then defaulting on the loan "should" trigger a benefit offset, which could satisfy the RMD.

I believe you also have to have no minor children with your husband, in addition to what Mike listed above. If the child is deemed to own both the businesses through the family attribution rules, then that also removes the potential exemption to the usual controlled group rules, as well.

My guess is that it's okay as long as you have a document that spells it out properly. A typical prototype might say that all the non-elective contributions are subject to one vesting schedule. And you shouldn't be able to amend later to un-vest the folks who may already have been swept in with full vesting. But I'd think new participants could be put on a 6 year schedule going forward.

As for the document, the definition of a YoP (computed to fractional parts of a year) basically mirrors the treasury regulation - The accrual computation period is defined as the plan year, and the participant has both the hours and is eligible for at least one day during the period, and therefore "The portion of a YoP credited...shall equal the amount of benefit accrual service credited to the Participant for such accrual computation period." I hadn't really skipped the "check the document" step - because I still got the same question. Is it a full year of participation as long as the hours are hit within the period? I'm starting to think, though, that if we terminate on Sept. 30, for example, that just makes it a 9 month accrual period, so that even with 1000 hours, it's definitely only 9.75 years rather than 10. thanks again....

Got a quick one - Doctor has had a DB plan for his one-man consulting business since 1/1/2008, and he earns well over any limits to worry about. So 2017 is going to be his tenth year of participation (nominally defined as 1000 hours), and so once he gets his full 415 limit, the idea is to terminate and have him roll over a lump sum. The 415 regulations define a year of participation as calculated to fractions of a year. But they also say the year is credited if the hours are worked. Should I be interpreting that to say it's a full tenth year of participation as of the moment he gets to 1000 hours? Or does it mean he has to actually have the twelve months in the bank? He might get to 1000 hours in June, but if we terminate the plan right at that point, I don't want the surprise that he would only get 9.5/10ths of the $215,000 limit. He'd obviously rather go for the full limit, and so if it's legitimate to count 2017 as a full year 10 before the end of the year, he could terminate and distribute before December 31, thus avoiding any 2018 plan year with its additional costs. Thanks... --Brian Gordon

Anyone get this issue, where the accountant is throwing the 2014 staff contributions on line 19 of the 2015 Schedule C before sending it our way to finish the pension calculations? (Amounts deposited in 2015 but FOR 2014.) I didn't think it was a legitimate option, but would be willing to hear comments on it. I've typically grossed the net earnings back up by that prior-year number and started from there, providing them with the contributions for 2015 as what really should go on line 19. But if there is indeed flexibility on that, then I suppose it's okay. (Although I'd be more likely to frown if he tries to deduct the 2014 employee amounts with his 2015 owner amounts on his 2015 return.) Thanks. -bri

Hey yeah, thanks - I forgot that he could go back to "regular" (non-catchup) deferrals in Q4. (Good thing, too, when I get an email like, "he's not going to take a refund"!)