Bri

yeah, you kinda missed the part where you explained who the employer is here.... But, if I am to assume this is some sort of ASG where these plans all have to be tested together, the fact that you've made them retroactively eligible for a new plan with a different allocation method than the others is not a problem. But again, what specifically is making this NHCE ineligible for ANY of the other plans to begin with? And why wouldn't you test the guy separately as otherwise excludable by himself?

Hey, until the rules change, a Y2K spreadsheet is just as good as anything! (I still x-test PS plans from something I built in my 20s, a decade I no longer am in.)

I thought Belgarath had it right - since the EIN is different you'd start over with 001 and go from there.

^^^if plans are identified specifically as a combo of EIN plus PN, that seems logical....

And hey, as someone who does controlled group tests....I suppose you're going to have to assume that everyone on the census reports you receive actually was offered the relevant plan when appropriate. I can't even imagine testing this where people who "actually were eligible" weren't picked up by the plan administrator. It's a completely different issue, but in theory could affect your results if corrective QNECs aren't made. (Insert scariest face emoji here. 🤬)

I would suspect it's indeed the 415 issue, if the plan's aggressively maxing the owner out anyway.

I presume you mean beyond "make all the plans have identical provisions" and are interested in how you're going to tabulate results. Maybe a big spreadsheet with rows for each plan, columns for excludable/nonexcludable benefiting/nonbenefiting. At least that way you'll have your denominators ready to go when you copy formulas in making each ratio. Might also help if you're going to need to permissively aggregate any of the plans.

and of course, try to avoid having a smaller BOY count the following year compared to the prior year's EOY without something really obvious as to why.

The 204(h) notice is certainly an important part of the process. Are you using a document provider? You might have access to some boilerplate language for the changeover, but specifically referencing the required grandfathering of protect benefits.

I can imagine "the worst part" being, you check the balance every day, but because it's in mutual funds or pooled separate accounts, the first day it shows as $6998 and the sponsor tries to force it out then they'll find at the close of business they're back to $7004. But that's because I ascribe to the idea that the value when it actually occurs is the value that matters. I remember when the 3,500 law used to say that once you crossed it, it is deemed to always be crossed regardless of market drops. I wouldn't mind a ruling clarifying that if it were under the limit within the last 30 days or something.....

Details seem scarce here, but if you don't agree with what they put, don't sign it until/unless they can explain it. Because the DOL won't go after *them* if there are errors.

Thanks, guys - I think the better reference actually ended up 1.401(a)(4)-4(e)(3) for the BRF details under the nondiscrimination regulations rather than the coverage ones.

Hey, could that be interpreted as a new-fangled amendment increasing benefits, because it helps the ADP Test?

LTPT doesn't have the same grandfathering rule as the auto-enrollment.

I suppose it would depend on which way they transfer, if any of them indeed do! Anyway, I'm not involved with the client, this was the boss's request to check on, as I was really wondering if having one plan with MAE suddenly suggests the need to test that against a grandfathered plan. In theory that "might" (ha!) be the only real practical difference between the plans. (I also have no idea why they'd balk at just sweeping them up into the existing plan, to be fair.)

They bought a group of stores they want to keep separate from their primary line, I guess - I got the question from top management as to how the 410b6C was going to come into play, whether they wanted to keep the acquired employees separate, so when he mentioned they wanted to give them a separate plan but mirror the provisions to make 410b easy, the question of the auto-enrollment and whether that would count as a BRF sorta bubbled up.

Client wants to set up a separate plan from its current existing 401(k) plan, in order to cover separately a new group of employees whose employer they'd purchased. Twin plans, so to speak, they'll have all the same contributions options/investments, etc. But, as a new plan, this one's going to be subject to mandatory enrollment, right? The other plan's grandfathered as not to have it, and they don't plan to change that. I don't recall auto-enrollment being something subject to BRF testing. But can anyone confirm/refute that for me? (Leaving aside for now what would actually be tested - there could be new owner HCEs right away, before we suggest these will all be NHCEs off the jump.) Thanks. -bri

I was short a few the last time I renewed, they told me just to make it up in the next cycle, so I think I ended up with like 40 hours just in calendar 2022 or something like that.

The amount of annuity room "used up" in the conversion is done at the 415 rates, not the 417 rates. Otherwise someone could bifurcate and suggest they get the lump sum for an annuity portion (calculating under 417 to the same number as the full 415 limit would have) and then also expect an annuity stream for the difference.

The SMM might technically only need to go to the one person let in early, but as a part of the full plan document, a very ambitious employee could of course request access to it. (Likely? No, until it happens.)

Well that's a fantastic "out" for your situation, then!

Although you have a uniform formula, it's based on a "non-compliant for 414(s) purposes" definition of pay. The usual parallel would be with a pro rata PS allocation that fails 414(s), no?

Aren't fees just negative gains in the grand scheme of things? (I'd net them out.)

I'm the type that would say, despite the CPA deducting it, this is the real pay that's supposed to be used for 2024, and then you'll end up with a similar issue when you calculate the plan-pay for 2025 as you'd have to deduct both. If those "what they really should have been" numbers don't give you adverse plan issues (underfunding, running out of deduction room for 2025, revised 415 limits affecting the formula, etc.) then stick with your own calculations? Clearly under audit the IRS would make you re-calculate it to remove the deduction, anyway.

I suppose you have update his net wages for the AAC to not include the deduction - does that flow through to the MRC?