Mike Preston

The issue is avoiding discrimination. Crediting past service is technically easy, but doing so for HCE('s) after NHCE's have left the boat is discriminatory unless doing so can satisfy non-discrimination.

I think the plan might have accepted the QDRO and then provided 1/2 of the benefits due. 0.5 times zero.

We do it every quarter.

My turn to ask you to go back and read my posts. My "aside" is saying that it makes no nevermind what the document allocation requirements are (and everybody in their own group and 1000 hours and EOY employment, etc., etc.) if the plan sponsor is using employment status at date of contribution and that date is after the end of the year to determine who gets a slice of the proverbial pie that plan WILL be disqualified as it doesn't satisfy the definitely determinable rules. Toodles.

But that is focusing on the profit sharing allocation and not the safe harbor. My entire comment was geared toward the safe harbor contribution. To circle back to the regular profit sharing is a non-sequitur, But just to be clear, if the employer is determining eligibility for the regular profit sharing contribution or determining eligibility for the safe harbor contribution based on employment status at time of contribution and that time is after the end of the plan year the plan will fail scrutiny if the IRS examines whether contributions satisfy the IRS' rules regarding definitely determinable benefits. Note that the above concedes the issue that the plan document somehow provides the flexibility described.

I would be a little looser than Dan. You can include some past service if not discriminatory.

Huh?

Just to come full circle, keep in mind that the provisions of the plan which allow the employer to pick and choose (within limits) who receives a profit sharing contribution (otherwise known as "employer non-elective" contributions) are completely independent and do not influence the plan's provisions regarding safe-harbor contributions. While the plan can have safe-harbor provisions which vary by HCE status, it can NOT have provisions which vary by hours worked or employment status. It is not a good sign for the OP that he did not receive a safe-harbor notice as it implies that when the safe harbor notice was distributed the employer was aware of his HCE status for the upcoming year and that the plan's provisions work to exclude him. Nothing in the above is meant to disuade the OP from getting a copy of the actual plan's provisions regarding safe harbor contributions. As an aside, I think the IRS would have a field day if they found out that the employer was using employment status on post-End-of-year contribution date to determine or select those entitled to a profit sharing contribution. At the very least it does not satisfy the definition of a reasonable classification and therefore the average benefits test is unavailable to the plan sponsor when determining compliance with the coverage rules. But even if that is not of concern to the employer (such as would most likely be the case if the only people chosen to receive nothing are HCE's), there is no doubt in my mind that the IRS would consider it a violation of the definitely determinable rules. Remember when "everybody in their own group" was not allowed in pre-approved plans specifically because the IRS was concerned with the definitely determinable rules? Just because the IRS eventually allowed the provisions in pre-approved plans does not mean that there is no way to violate them: and this plan sponsor is playing with fire.

Wow! Very good result for the participant.

CPA? Limit? Their program? Oy vey.

$54k is fine. Not even close. As long as it works under 401(a)(4).

Especially when one considers that the 50% is a non-deductible excise tax.

My recollection is that the IRS interprets what constitutes a 410(b)(6)(C) transaction expansively.

It has been my experience that the folks on the toll free 5500 number are quite competent. Seriously, it rarely takes long for them to go behind the scenes and fix whatever needs fixing.

Regarding the last question, yes, it is nondiscriminatory.

The 404 deductible limit typically greatly exceeds the amount that would fully fund a plan. I think 90-49 would be a stretch, but I'd leave it to ERISA counsel and actuary.

Quite the comedian.

Why wouldn't it?

No, but who cares? Suicide on a stick.

No. Yes. No. It will fly.

Now that the June CPI has been published, you can take the above amounts to the bank, barring some very strange CPI changes in the next 3 months.

Bill types faster than I do.

Obviously, you need a lawyer to fight an offset. But I wouldn't expect you will need one. It seems pretty clear to me that the only offsets contemplated are those that constitute, on their own, payments made on account of disability. Any other interpretation by the Plan could get them in real trouble.

Client? 415? Thinking of? Oy vey.

Not that I'm aware of.