cheersmate

To continue using this thread... For those eligible for only the 401k portion (since have less than the 1YOS), are their deferrals tested via ADP testing (since not part of the SH contribution)? Assuming no new HCEs in this category, ADP would pass. But if have a new HCE and NHCE, do you test via ADP? If Plan is TH, how does the employer satisfy TH for those eligible for only the 401k portion (since have less than the 1YOS), assuming still employed on last day of plan year (assuming plan requires LD for THMin)? Thank you!

Thank you Kevin C. All parties feel the same way regarding term one and adopting a new plan...I thought I had read somewhere the IRS basically said to make a good faith effort in cases such as this. The VS used also says same regarding changes to Name Address and EIN. Any suggestions wrt the Notice to Participants? Thank you again.

Company A is a professional corporation with a Safe Harbor 401k Plan. The son of Company A's owner is interested in buying the practice via an asset sale, mid-year, and he would like to acquire the 401kSH Plan with the purchase, as all employees will continue on with the "new company" or successor employer. It is my understanding the transfer of the Plan should be addressed in the buy / sell agreement, including service to be credited, contributions/deductions for year of purchase. Questions/Concerns: With it being a "401k Safe Harbor" plan is there any problem with the new company amending the Plan to reflect the successor Plan Sponsor's Name, EIN mid-year, coincident with the buy/sell? The new company does not intend to "change" any of the Plan's provisions -- simply wants to become the successor plan sponsor. I am not familiar with any "mid-year" Safe Harbor Notice provisions. Other than providing an SMM to participants, is there any other Notice requirement? My concern here is the SHMatch -- Company A will fund the SHM for all payroll through Company A; the successor Company will fund the SHM for all of its payroll -- is this considered an impermissible change mid-year. They do not anticipate a PS contribution for this year. Assuming the new company is permitted to Amend the Plan mid-year to reflect its successor sponsorship, Name and EIN (no other changes are intended), is there anything further necessary to affect this transfer of Plan from old sponsor to new sponsor? Thank you

Thank you everyone for your input. Very much appreciated.

Thank you. I do hope someone will comment further regarding PT and UBIT.

An IRA Owner would like to direct investment into a newly forming privately held US Business, whereby he would have an equity interest of less than 10% (probably less than 5%). It should be noted the IRA Owner would be a member of the advisory board as a recognized professional with immeasurable experience and knowledge as it relates the product the company is developing and will ultimately be marketing. Would this be a Prohibited Transaction? If the IRA Owner is not a member of the advisory board would the answer change? Would being a member of the advisory board raise self dealing issues? The business is developing and ultimately will market an implantable prosthetic. Would this trigger Unrelated Business Income issues? The company is expected to be quite successful and the IRA Owner would like the investment growth to occur in his tax deferred IRA rather than his personal asset portfolio for tax reasons. Could this person who has a non-Title I DBP make the same investment using the DBP assets? The issue of liquidity is understood. The need for annual valuation of the privately held investment for plan valuation purposes is also recognized. Thank you

This is for a cross tested 401k Safe Harbor plan that provides: 1 year eligibility for 401k, employer SHM, optional/discretionary ACP SHM and PS Immediate eligibility for Davis Bacon/Prevailing Wage type contribution Vesting is 2/20 for PS and optional ACP SHM 100% immediate Vesting for 401k, SHM and DB/PW type contributions The DB/PW provision states (N/S VS doc): "The Employer will make a Prevailing Wage Contribution on behalf of each Participant who performs services subject to the Service Contract Act, Davis-Bacon Act or similar... The Prevailing Wage Contribution shall be an amount equal to the balance [emphasis mine] of the fringe benefit payment for health and welfare for each Participant (after deducting the cost of cash differential payments for the Participant) based on the hourly contribution rate for the Participant's employment classification as designated on Schedule A as attached to this [Plan] The PW contribution is defined as non-elective (but specifically not a QNEC) and shall be used to offset the employer's contributions (other than ADP test SH contributions) The employer has a DB/PW job coming up and would like to contribute the fringe portion (or at least a portion of it) to the plan. It should be noted there have been other jobs subject to DB/PW completed in the past (while plan has been in place) whereby the basic wage and fringe were both paid in cash (i.e. wages). Will it be sufficient for the employer to provide advance notice to the affected employees that on Job X, $#.## per hour will be contributed to the Plan in lieu of cash payment in accordance with DB/PW? These contributions/hours will be tracked within payroll and plan record kept separately (i.e. own source bucket). It is okay for the employer to choose whether or not to contribute the DB/PW amounts from job to job, and how much of the fringe portion amount from job to job, in a discretionary manner so long as advance notice is provided to affected employees and the hours/contributions are tracked/record kept accordingly? It would appear to be permissible since the Plan's wording states the contribution to the Plan is the "balance"... (see above). Apologies for the length of this post. Thank you

Thank you Lou. Just wanted confirmation to ensure I wasnt have a senior moment... This particular case is having a good year and isnt certain what the next will hold for them. It is a SH plan therefore not subject to ADP testing.

Can a participant in a fiscal year 401k plan have deferrals within a fiscal year that exceed the 402g limit? Plan Year: 7/1/2014 - 6/30/2015 Plan permits special election for bonus pay Participant is age 50+ Compensation exceeds $100k + bonus Deferrals 7/1-12/31/2014 $6,000 Proposed Deferrals + Catch-Up to be deposited 1/1-6/30/2015 PYE $24,000 Can a participant have permitted deferrals + catch-up totaling $30,000 for the Plan Year 7/1/2014 - 6/30/2015 given the above fact pattern? Assuming, yes, it is understood this participant would NOT be able to defer any further for the remainder of calendar 2015.Would restart Deferrals in 2016... Thank you

Thank you everyone. The participant did resign in 2014... therefore is not vested. FYI, the Plan excludes service prior to its Effective Date (1/2012). [There was no previous employment to consider with an affiliate who may have sponsored a Plan]

When is the following participant deemed 100% Vested: DOB 1948 (age 65 in 2013) Entry Date 1/1/2012 Resigned 2014 Plan's NRD is 1/1/2017 "Normal Retirement Age" as elected in the Plan's Corbel Adoption Agreement is the later of the Participants 65th Birthday or the 5th Anniversary of the first day of the Plan Year in which participation began 1.52 "Normal Retirement Age" means the age elected in the Adoption Agreement at which time a Participant's Account shall be nonforfeitable (if the Participant is employed by the Employer on or after that date). Given the above, is this participant 100% vested in 2013, at his/her 65th bday, or as of 1/1/2017? Thank you.

Thank you for this Just wanted to be sure w r t the SHM. Many thanks. Happy Holidays Gentlemen!

What is the Gateway Minimum for the NHCEs in the following scenario? HCE is receiving the Safe Harbor Match (capped at 4%) and a 10% Profit Sharing Allocation. Assume NHCEs did not receive any SHM because did not defer any 401k. Also assume 401(a)(4) testing is passed with as little as a 3% PS allocation to the NHCEs. Is the Gateway Minimum additional allocation requirement 0.34% (3%PS + 0.34%GW = 3.34% * 3 = 10% PS allocation to HCE)? OR Is the Gateway Minimum additional allocation requirement 1.67% (3%PS + 1.67% GW = 4.67% * 3 = 14% total SHM+PS allocation to HCE)?

Has this been addressed? If the employee fails to give sufficient amount of cash tips to the employer to cover the deferrals, what options does the employer have to (1) collect it from the employee? (2) to satisfy the deposit of deferrals? (3) to determine the correct match - does the employer match what was actually withheld from payroll (could be zero bc zero remaining after mandatory payroll tax withholding)? Thank you.

Thank you for your reply. If no such "doubling up" language on election form (or plan doc), is the employer obligated to absorb the remaining premium? Health Care premiums are paid by employers prior to the 1st of the month for which applicable; is this essentially a cost risk to the employer?

Is an employer permitted to double-up cafeteria plan pre-tax health insurance withholding amounts from a final payroll for an employee who terminated mid month? This would be done to cover the "2nd half" the employee would have ordinarily paid in the latter part of the month had employment continued. [This is with respect to a MD employer.] Thank you.

A non-5%-owner participant passed away at the age 79 in 2013; she was actively working up until her passing. Her named beneficiary is her son. Total Acct Bal $372.18. Had she retired in lieu of passing, her RBD would be 4/1/2014. If the named non-spouse beneficiary elects to rollover the Acct Bal, is he required to receive at least a portion of it to satisfy RMD rules based on his 2013 age, single life factor? Would your answer change if the distribution occurs Jan 1 2014 or Apr 1 2014?

Who is responsible for the following and what - if any - correction(s) is(are) necessary: Participant completes 401k Election Form, electing 8% pre-tax withholding. On the bottom of the participant's 401k Election Form just prior to the participant's signature and date, the form states: "Duty to Review Pay Records. I understand I have a duty to review my pay records (pay stub, direct deposit receipt, etc.) to confirm the Employer has properly implemented my salary deferral election. Furthermore, I have a duty to inform the Plan Administrator if I discover any discrepancy between my pay records and this Salary Deferral Agreement. I understand the Plan Administrator will treat my failure to report any withholding errors for any payroll to which my Salary Deferral Agreement applies, by the cut off date for the next following payroll, as my affirmative election to defer the amount actually withheld (including zero). However, I thereafter may modify my deferral election prospectively, consistent with the Plan terms." The participant has not come forward indicating there has been an error in his 401(k) amount being withheld from payroll. There have been 2 payrolls since the election was made/signed/turned in to the Plan. Does the Plan have to alert the Participant that is has recently discovered the Payroll Company reports reflect $8 per pay (not 8%) being withheld? If the Plan must alert the Participant, does the employer have to correct the matter: (a) going forward (b) going forward only if the Participant confirms he wants his 8% Election put into place © going forward only if the Participant confirms he wants his 8% Election put into place, with the correction effective with the next plan permitted "election change" date, or, (d) by (the employer) contributing 50% of the difference between the amounts withheld v. the amount based on election, plus interest?

TY Tom.

Cross Test SH 401k PSP - eligibility for 401k, SH and PS are the same the 3% SHNEC excludes HCEs Can the employer elect to make a PS contribution of 9% for HCEs (0% for NHCEs) as long as passes ABT and RGs?