Mike Preston

Back to square one for me. What was described in the original post was not a merger. B purchased A and A is a wholly owned subsidiary of B. Who or whatever owned A before all this started now owns some part of B. If that isn't the case then the description of events needs to change.

Is Kac1214 our very own fake news generator?

This is why we get the big bucks. The 5500 series doesn't have a place for specifically identifying plan name changes. Change at will from year to year and the IRS/EBSA/DOL won't care. What they use to keep track of things is the Plan Sponsor and the EIN of the Plan Sponsor. You report changes there on line 4 of the 5500-SF. It is extremely esoteric. Strangely enough, it works. But it is not intuitive. Once you have done a few thousand, it will be like water off a duck's back.

Personally, I'd leave the plan name alone if at all possible, but that's just me. There are people who will be very confused if the plan name remains, for example, "The MKaufman Sole Proprietor 401(k) Plan" when the plan sponsor has been changed to "MKaufman, Inc.". So, at the same time that the S-Corp. signs on to the plan as the Plan Sponsor you most assuredly can change the name of the plan. But you could have named the plan: "The Best Darn 401(k) Plan on the Planet" with the sponsor being your sole prop. Had you done that you could easily leave the plan name alone and just change the Plan Sponsor. But you probably didn't name it that way, huh?

What Lou said. I don't spend too much time focusing on 00.001% issues. Suffice it to say that if you had one, it should be readily apparent to a professional. Just because the likelihood is low doesn't mean there are only limited circumstances. In fact, the list is quite long. As Lou alluded to, they all boil down to reasons why you might want to wall off the old before contributing to the new. Other than compliance issues with the old plan, if you were married at one point and separated on 12/31/2016 you might want to wall off the old from the new. Again, just common sense stuff.

Unless there is other stuff not readily apparent, no issue at all. It is usually (99.999% of the time) NOT better to create a brand new plan.

The plan document should give you guidance.

In this context I can't imagine that the PC in question hasn't adopted the plan for the benefit of its employee and therefore is a plan sponsor for the purposes of answering the question. Check the box YES and submit an explanation.

So, given that the employer of JimW58's wife has been (through ADP) administering the plan improperly, anybody want to comment on what the plan SHOULD do to correct? Seems to me that there is a clear qualification failure of the universal availability requirement. The first question to ask is how long this failure has been going on? If more than two years I can't see how it could possibly be corrected without a VCP filing. Even if less than two years I can see the value in a VCP filing to ensure the correction maintains the qualification of the plan. Anybody know a gentle way that JimW58 can suggest that his wife's employer engage an ERISA attorney to suggest a course of action?

I would collect projected census for 2017 and go from there.

What you have said makes absolutely no sense. There is no structure which calls for "QNECs to Plan A to NHCEs employed by the sponsor of Plan B (i.e. giving them a benefit in Plan A) in order to pass." Why wouldn't those QNEC's be paid to Plan B? Somebody needs to hire somebody who understands non-discrimination testing.

Make sure he runs it by his accountant. There are additional issues if the form of organization is not taxed as sole prop or partnership.

Yes.

I assume the comparison is to an existing 401(k) with a match of some sort as the only ER contribution. I can't imagine that the non-discrimination rules wouldn't allow a straight 3% Safe Harbor cost for a subset of NHCE's that would support doctor deferrals of $18,000 or $24,000 (if 2017) and employer contributions of another $23,850. What design were they looking at?

The 12 month restriction is calculated on the date of the new loan. It has nothing to do with the date of (previous loan) repayment.

You remember incorrectly.

It is highly likely that this structure is set up so that the associates' plan can get by without any TH minimums. If so, in case there is a year where they do not pass coverage independently there will be a TH minimum that will make the client very angry. If so, and they are comfortable with the design as it is, the additional pain and aggravation caused by losing Safe Harbor status will be minimal.

Nope. How is it possible that your firm didn't give the client clear guidance on this issue?

Ignoring the ASG question as that requires more time than I have available. But the quoted sentence is not nearly enough to establish A's compensation for plan purposes is anything other than zero. Details, please.

Well, its Friday afternoon.

I agree it would be taxed per 2018. But I wonder if a plan participant eligible for Congressional disaster relief could insist on a hardship withdrawal that would be eligible for taxation spreading over three years?

Isn't this correctable by a $250 VCP filing?

No time to do research at the moment. If you want me to review in light of further developments taking place after a specific date, please provide a link.

I suppose it depends on state law. Here in California the employer is forced to follow the employee's wishes. If that results in a default, so be it.

As long as you pass 410(b) without the dreaded Red Sox fans, the ACP test is determined without considering them.