Hokielady

Doesn't require a short plan year of 03/01/2016 -12/31/2016 which means pro rating limits. Would prefer the plan year be 01/01/2016-12/31/2016

If the Employer began in March of 2016 1- can their new plan have an effective date of 01/01/2016 for a calendar year? 2-does it matter what type of entity they are- ie corporation; sole prop etc I know IRS said at 1997 ASPPA it's ok- but I am getting push back from my company's doc dept

There is no last day requirement or hours requirement- if someone defers they get the match With they way the formula is written - technically if an HCE and NHCE had the same years of service their match would be the same.

ADP Safe Harbor Enhanced Match- $1 for $1 up to 6% of pay Fixed Match-Based on Year of Service- $1 for $1 up to- Years 1 and 2= 1% of pay Year 3=2% of pay Year 4=3% of pay Year 5 and higher =4% of pay Will the Fixed Match fit into ACP safe harbor? Since all employees have the ability to grow into years of service will this meet the nondiscrimination test IRC 401(m)(11)(B)(iii)?

Looks to me like a form 5310-A would need to be filed prior to the testing year. I am working with our pension software folks to get the files coded correctly so I can check ABT

Company B was recently purchased and while the transition period gives them passage no matter what until the plan year that begins 07/01/2016 the client wants to get out ahead of this to determine is there will be a problem in the future. I know it's such a novel concept- the client wants to get ahead of a potential problem! Another question- if we have to aggregate plans then the ACP test will be computed with all eligible employees of Plan A and B- I am concerned that may result in a huge failure- ADP is ok since plan A is very large. What do you think? Also- I am wondering if the SLOB rules may help- since Company A is mainly manufacturing and Company B is software tech company

The Profit Sharing in Plan has a last day rule to receive a contribution, the 60 were eligible but terminated during the year and worked more than 501 hours; so I believe they will be counted. Profit Sharing- if test plans separately Plan A- NHCE 587/766=76.63% HCE- 23/53= 43.39% Ratio percentage= 176.58% Plan B- NHCE 119/766=15.53% HCE 30/53=56.60% Ratio percentage= 27.45% fail 766(NHCE)/819(Total ees)= 93.53% and Safe Harbor % is 25.25 so if I can pass the second part of AVB I am good. Combined Testing result is the same as Plan A The match has the same eligibility requirement- 12 months so testing should be like the PS above.

Plan A Coverage Group-total 670 NHCE -647 HCE -23 No match in this plan; but Profit Sharing and 401k- eligibility is 12 months on both sources Benefiting Group for PS and 401k NHCE-587 HCE-23 Plan B Coverage Group-total 149 NHCE-119 HCE-30 No profit Sharing but Match all ees in this plan are eligible for match and deferral; immediate SD entry and 1 year wait on Match I didn't run ABT yet since I am having trouble getting software to recognize both groups. BTW-I also thought you didn't combine the non similar money types, but software provider told me I had to aggregate both in testing- they said Plan B ees would be treated as non benefitting.

I have two Employers part of a controlled group; both have 06/30 year end Plan A- 401k and Profit Sharing Money source Plan B-401k and discretionary Matching 401k Coverage Plan A can pass 401k coverage on its own (176%) Plan B fails 401k coverage on its own (27.44%) therefore it must be permissively aggregated with Plan A in order to pass- and it does 401m Coverage Fails when calculated separately by each plan and on a combined basis since Plan A has no Match. Profit Sharing Coverage Plan A can pass on its own Plan B fails on its own since there is no Profit Sharing Combined testing passes. So does this mean Plan A has to have a match and fund it?

I have a client who has a DB plan and put in a SEP for 2011- I am trying to figure out if the excise tax applies under 4972 (c ) (7). Other facts- it is a one man plan and his pay has always exceed the dollar limit The Deduction limit for SEP and DB is the greater of 1-25% of pay- capped at the dollar limit for the year or 2-the minimum funding requirement for the DB Plan 3-When computing this calculation there is a 6% of pay “freebie” given to the SEP that is permitted before the maximum deductible calculation is performed under steps 1 and 2 So if $49,000 SEP deposit was made in 2012: 1-The deduction for the 2011 contributions would be: a-DB $250,000-contribution determined by actuary b-SEP- $14,700- this is the 6% freebie (245,000 times 6%) the deductible is met since the DB contribution is greater than 25% of $245,000 and there is no SEP beyond the “freebie” 2-The deduction for the 2012 contribution would be: a-DB- minimum $50,317 calculated by actuary b-SEP-$27,183; total which is made up of $15,000 freebie (6% of $250,000 dollar limit) plus SEP Balance $12,183 (25% of $250,000 minus the DB contribution of $50,317) The total SEP deposit in 2012 is $49,000 of which $14,700 is attributable to 2011 and $27,183 is attributable to 2012; therefore $7,117 is a nondeductible contribution The $7,117 can be carried forward and used and deducted in 2013 to help fund the 6% freebie. If participant's total compensation is at least $255,000 the freebie would be $15,300 Question: 1-Can we apply 4972 ©(7) and say there is no nondeductible contribution and therefore there would be no excise tax?