tghooper

A plan made a profit sharing contribution and failed the compensation ratio test. The allocation is comp/comp per the plan doc. I believe I can still run a rate group using test using 415 compensation without having the cross test language in the plan document. Am I correct on this? Thanks

We have a plan document that excludes a class of employees (hygienists) that are not "excludable" with fail safe language. Plan also has last day/Y of S requirement as allocation conditions. Needed to add back the employees that don't meet the allocation conditions but ratio test is still not satisfied. My inclination is to add back some hygienists to pass ratio test. However, it seems that ABT is still an option without having to add back the hygienists. Not entirely comfortable given that doc has the fail safe language.

Correct...2015-27 didn't modify the definition of "overpayment"...sorry. Unfortunately, an amendment would not fix our problem. The amount in question is quite large and it's an HCE, which makes it worse.

I'm curious too as we have the same situation. I don't believe this would fall under EPCRS overpayment under rev proc 2015-27 since it doesn't meet the definition. Curious what others have done, other then to notify the participant this need to be put back.

I have a similar situation except our plan didn't have the cash. The plan is leveraged and has only been in existence for 3 years. In our situation, the sponsor paid these individuals because the plan did not have the cash. Can the company leave these shares that were "distributed" in the plan and allocated with the other share contributed? Does the document have to allow for this?

My proposal is for discussion only. The plan document is not specific and only states that it will comply with USERRA. There are no special provision for a special allocation so it would not be possible to make an additional contribution. As you stated QDROphile, it would distort the allocation. I wanted to see what other practitioners are doing. At this point, we may have the client discuss this with counsel.

Suppose you have an 100% leverage esop in which the same number of shares are released and allocated each year; there are no forfeitures available and there are no shares available for purchase. If USERRA doesn't apply until the employee returns from leave, would it appropriate to allocate the shares on the imputed compensation and placed into a suspense account? The employee would then be credited with the shares upon return. Or do you have multiple years of imputed compensation in the year of rehire?

ESOP Guy - that's correct. We're looking at all options at this point, including VCP. Thanks

Thanks for the responses. Yes, the plan will be amended (I forgot to mention that). There's no issue with discrimination. Mostly a timing issue that resulted in going beyond the QEP.

We have a plan (non leveraged) that allowed some participants to diversify beyond the statutory six years. We use the Corbel plan document. Are there any pitfalls or any considerations that we need to consider?

I forgot to mention that this is an S Corporation. Thanks ESOP guy.

We have a similar situation. The plan had a loan in place as of 12/31/2013 and first payment due in January 2014 (per note/amortization schedule). The sponsor elected to prepay a portion of the loan payments and allocated that to participants at 12/31/2013. My question: Is that amount deductible on the 2013 corporate tax return since it was not applied to the loan until 2014?