WhoLetTheDogsOut

WTH didn't they buy this stock in a DC plan?????? I know it's an unrelated (and somewhat rhetorical) question but that would have been a sweet result if that had been done.

If an employer qualifies for the hurricane Irma tax relief extension until 1/31/2018 for 2016 returns, do they also have until that date to adopt a SEP for 2016?

An employer adopts an amendment to cease the safe harbor nonelective provision with the appropriate 30 day notice. Less than a week later, after speaking with the financial advisor, the sponsor wants to rescind that amendment. Is that possible? The amendment was executed and the notice distributed but is not yet effective.

Check out WonScore from Wonderlic. www.wonderlic.com

How about this variation on the subject. A participant and her husband are purchasing their primary residence. Due to a bank requirement (or for some reason to obtain the optimal interest rate) the home will be in the husband's name only. Can the wife still get a hardship for this purchase?

An employer has 5 employees, all of whom are officers earning over the 416 compensation requirement and none of whom are owners. Therefore, only 3 of them would be key employees due to the limit on number of officers that are treated as key employees (greater of 10% of employees or 3). Those 3 would be determined by ranking them by compensation for the determination year in question and selected the highest paid. These employees are all equal in decision making & responsibilities regarding the operation of the business. Also, all of them are highly compensated employees. They have a safe harbor 401k and are exempt from the top heavy requirements. However, if they wanted to allow after-tax employee contributions, the would lose that exemption. If any of the employees made such a contribution, it appears the two non-key employees would be required to receive a top heavy minimum. Unless my analysis is wrong, this is a crazy result that would preclude the employees from making such after-tax contributions without requiring a top heavy minimum for the two non-key employees. Anyone disagree or have any comments? Thanks.

I don't think I would file a 5500-EZ either. If there were plan assets involved, then, yes I probably would. However, I would make sure the document is current.

Ring, ring. "Hello." "Hello, Mr. HCE. Our 401k plan is now top heavy so we are going to implement a safe harbor match. However, since you make as much as Mitt Romney, we don't have to give it to you. However, we will give you a 4% match if you will take a 3% pay cut. How about it?"

Yep, the plan is top heavy. Hence, my problem. I am wondering about the compensation limit idea. Would that be a document issue or could it just be stated in the notice. My document does not allow for such a provision.

Can a plan provide a limited safe harbor contribution to HCEs as long as the full safe harbor contriburtion is made for NHCEs? For example, the plan provides a 3% safe harbor nonelective to NHCEs but HCEs only receive a 1% safe harbor contribuiton. Or for a safe harbor matching contribution plan, the plan provides a basic safe harbor match to NHCEs but provides a lesser match to HCEs.

We have seen about three of these recently. One common factor is that the extension requests were for two plans. However, the notice appears to be for the plan listed as the second plan on the 5558. In at least one case, an acknowledgement of the extension request was received for the plan listed as the first plan on the 5558 and a notice of a proposed penalty was recevied for the second plan listed. We have faxed a copy of the notice of proposed penalty along with the 5558 that included both plans. Still waiting for a response.

Yes, I meant cross testing on a benefits basis. The plan satisfies 410(b) as a whole by the ratio % test, all NHCEs get the gateway (5%) and all non-keys get a top heavy minimum. Does that make more sense? Thank you.

An employer has a safe harbor (3% nonelective) 401(k) which allocates additional nonelective contributions utlizing a grouping methodology. There are 3 HCEs and 6 NHCEs. All NHCEs receive the 3% SH nonelective plus an additional 2% of pay allocation. If I put 1 HCE and 2 NHCEs in Component Plan A and the remaining 2 HCEs and 4 remaining NHCEs in Component Plan B, both component plans satisfy the 410(b) ratio % test. Component Plan A satisfies the 401(a)(4) Average Benefits Test and Component Plan B satisfies 401(a)(4) on a contributions basis - the two HCEs in that Component Plan receive NO nonelective contributions -- only deferrals are allocated to their accounts. Am I missing anything?