Belgarath

Yeah, BG's comment on the 15% was what I was getting at, only he stated it better! When typing in a hurry, sometimes the thoughts don't translate to words on the page. So yes, what I was trying to say was it might be more than 3% - if HC gets more than 9%. And of course, could be up to 5% as BG says, if HC gets 15% or more. Sorry for any confusion.

As you describe it, shouldn't be a problem. Since getting no allocation, former employee isn't "benefiting" and therefore doesn't have to receive gateway. One other question, since you specified that owner wants the maximum - is this maximum more than 9%? If so, then your gateway may be more than 1/3.

Curious - these days there is usually a lot of talk about merging public schools or school districts to save money. How does this work for their 403(b) plans? I mean, in private employer qualified plan situations, the plans are often merged, so there is an assumption of assets and liabilities, etc. But in a public school situation, there isn't any "trust" to be merged. So does the new school or school district just set up a totally new plan, and the old plans are "terminated" - which is another headache altogether, or are the plans in fact "merged" into a new plan of the new sponsoring school or school district? Many of these plans have individual annuity contracts titled to the employee, so a new school/district can't really "force" them to do anything. If there are employer contributions subject to a vesting schedule, then it seems like this could get very messy. What would typically (if there is such a thing as typically) happen in these situations?

I'm sure you've considered this, but since the universal availability requirement applies only to deferrals, it isn't necessarily that big a deal anyway. And if a governmental (public school) 403(b), you can be as discriminatory as you want to be on the employer contributions (obviously not race, religion, gender, etc...) I'm so conditioned to being paranoid about nondiscrimination in "regular" plans that I sometimes have to take a step back and reset my thinking when a governmental plan question is involved.

Take a look at 1/401(k)-1(d)(3)(iv)(D). this may help you out. Essentially, a loan doesn't have to be taken first if the loan increases the need.

I also missed it, but at least I have a valid excuse (not a note from my Mother) - we were in the midst of getting 30+ inches of snow. Fortunately all of the light and fluffy variety. Way better than the hurricanes that Tom has to worry about!

We don't do these, so I'm not familiar with document details. But it seems to me like a "regular" 401(k) or PS document could be used for a ROBS plan, as long as the document allows essentially unlimited portion of the assets to be invested in the employer (must be a c-corp) stock. Is that true, or is a special document necessary? I know these have become more popular in recent years. Years ago, the IRS REALLY didn't like them, but it seems like for plans with no NHC, and a stock that is properly valued by an independent appraisal each year, that FILES 5500 FORMS, that they have dropped some of their previous objections. Anyone work with these? https://www.irs.gov/retirement-plans/employee-plans-compliance-unit-epcu-completed-projects-project-with-summary-reports-rollovers-as-business-start-ups-robs

I neither agree nor disagree. There is such a universe of facts and circumstances that could affect the final outcome that I wouldn't dare to generalize. (How's that for a non-answer?)

"Economic Analysis" - reminds me of a line in "Pretty Woman" where Richard Gere asks Julia Roberts what her name is. Her answer was, "What do you want it to be?" Seems like economic analysis usually has the same approach to an answer - "What do you want it to be?" This is obviously somewhat tongue in cheek, but by no means entirely in jest.

I've never looked for any regs or guidance on this, but I would treat the plan, for all practical purposes, as having a plan year end as of the last day of February. If leap year, then February 29th. Other years, February 28th. Until someone convinces me otherwise. I have a hard time imagining that an IRS auditor would give you trouble on this.

So how do you deal with this? According to Sal, these guaranteed payments, under some circumstances, ARE taken into account in computing net earnings from self-employment. Most calculations I've ever seen just use the K-1 Line 14 amount, minus 179, unreimbursed partnership expenses, oil & gas depletion. Because these amounts are "taken into account" - does that mean the CPA has factored them in already, if applicable, when arriving at the Line 14 number? These are often pretty large amounts.

https://www.irs.gov/retirement-plans/how-much-salary-can-you-defer-if-you-re-eligible-for-more-than-one-retirement-plan

Just curious as to how people generally handle this in real life. Suppose you have Corporation A, which sponsors a plan. Plan passes all testing just fine, and employer doesn't want any changes whatsoever. Owner is also 100% owner of Corporation B. No employees other than the owner. No Plan, and doesn't want to adopt Plan of Corporation A as a participating employer. Assume document properly reflects existence of CG, but related employer (Corp B) doesn't adopt the Plan of Corp A as a participating employer. Although you technically have to consider compensation for the owner from Corporation B for 415 comp, nondiscrimination testing, etc. - would you bother to ask for it, particularly if the employer doesn't really want to give it? Since it could only HELP passing testing, which already passes, would you ignore?

Thank you! Yours must be the IDP formatted. Ours is the Defined Contribution Prototype/Volume Submitter Plan (and uses an Adoption Agreement) and it has nothing like that. I'll have to look into the IDP on a pay-per-plan basis if such a situation ever comes up!

BG - at your leisure (as TPA's, we all have lots of that) could you confirm document provider, and if Relius (now FIS) can you confirm which document? We mostly use their PPA 401(k) VS with Adoption Agreement, and I can't find anything like the language you posted. I can see that it would be very handy in certain rare situations. Thanks!

6.07(2)(a) refers to a correction under 6.07(3), and specifically uses an example a loan failure caused by employer inaction. So you use one of the correction methods in 6.07(3), and submit that through VCP.

BG - if Relius, which document (IDP, whatever)? The basic prototype/VS doesn't have this language.

Remind me never to attend one of your parties... Yes, I know you were kidding.

Yup. BG, who is your document provider? That's a nice feature - ours doesn't have this flexibility, although even if we had it, we'd probably use it about as often as something productive coming from Congress.

Well, just because you pass gateway doesn't mean you necessarily pass nondiscrimination. Gateway is just the price of admission. I agree that you don't have to do prorated limits if you use the full plan year.

I agree with Mike. But maybe this will make you feel better. Note that it does NOT say that assets must be distributed. https://www.irs.gov/retirement-plans/terminating-a-simple-ira-plan

So assume you read "Bored of the Rings" at one time in your life? I didn't care for it (being a huge Tolkien fan) but I did think that "Goodgulf" was a clever play on words.

T'isn't even a plan. A broker who does some 401(k) business with us asked this question, so I was just looking to help out the broker with some sort of reasonable answer. My thanks to you all for your input!

I think you are confusing 415 limits with employer deduction limits. 415 limit is the lesser of the maximum dollar amount (53,000 for 2016, 54,000 for 2017) or 100% of compensation. P.S. - I purposely didn't get into any of the possible quirks - catch-ups, compensation, etc. - just the basic.

Thanks KJ. Let's assume that the plan document allows it. It SEEMS like it qualifies as an excepted benefit. Yes, there would be plan document, SPD, etc. What is the argument for possibly considering that this is part of a group policy? The whole point of this is that the employer doesn't offer dental coverage, so employee would purchase an individual policy - they would just want to offer the option to have this on a pre-tax basis for premiums through a cafeteria plan, if allowable. I haven't really found one thing directly on point for this specific question. This makes me nervous, because it seems like I can't be the only person in the world who has asked this question. Anyway, thanks again for your response!!