Mike Preston

You have not been misled. Ask Co. B's TPA for a citation.

Counts towards the gateway, too.

I don't think the DOL would look just at the EE's accounts. They would look at the plan in total. Most importantly, they would see the employer's coffers and not like what they see.

Class vesting has been forbidden for a loooooooooooooooooong time.

I've done it when doing 52-card pickup (a VCP application).

The minimum distribution requirements have absolutely no impact on determining what can go into a plan. They only impact the timing of what needs to come out.

What part of "theft" is unclear?

We appear to be in a kind of loop. If you study the answers given you will see that everybody is in agreement that there is absolutely no need for the recordkeeping system to separately account for historical catch-ups versus non-catch-ups. However, when testing the plan for non-discrimination (such as the ADP test) the test will consider only non-catch-ups of the year in question. Think of it as a transient need. When doing current year testing the testing system will need to differentiate. But once through with testing for the year, there is no need to breakdown account balances. None.

It is a PT only if correctable and, at some point, corrected. What you are describing comes closer to theft.

Relius is right. What you have described is SOP for any plan which attempts to restrict eligibility.

Note that we face the same issues with pure profit sharing plans with fbo accounts and contributions made before the end of the plan year. I've harped on this issue from just about every angle: employer contributions made before the end of the plan year are disasters waiting to happen (unless associated with specific instructions received from the plan's TPA or actuary).

I don't think it is a prohibited forfeiture but it is an awkward plan design that requires a plan to define how things should happen as far as timing, movement of monies and recognition of gains/losses that seem incredibly administratively intensive. I won't work on a plan that does what you describe unless I'm doing a favor for very good friend and even then I'd try my best to talk them out of the design.

I understand the lack of concern regarding being subject to quarterlies in an overfunded (and likely to stay that way) plan. But I don't understand maintaining a PFB whhich results in a funded ratio so low that the PFB essentially becomes unavailable to use. But, in either case, it doesn't make much difference to things (other than moving around the algebraic formulas) if the client will be contributing well in excess of the minimum required contribution each year for the forseeable future. I would quarrel with one thing you said, though. A mandatory burn takes place on the first day of the fourth month of year X+1 if the AFTAP for year X is less than 90% (and not less than 80%) [or, for completeness, if less than 70% (and not less than 60%)].

Well, I did say as a self correction, not purely ignoring any problems. If the only thing going on is that the employer deposited salary deferrals for two pay periods at the end of the firist pay period, and the employee worked through the end of the second pay period (and thus earned into the deferrals) I just don't see much of an issue.

These sorts of errors happen all the time with 401(k) plans. Unless there is some funny business with respect to moving deductible amounts between fiscal years the IRS will allow just about anything that seems remotely reasonable as a self-correction. I dare say that every 401(k) plan in the country would be disqualified if the IRS were sticklers on the "don't contribute deferrals before the actuall payroll date" rules.

You would, but there is a reality disconnect in that many insurers will not write an annuity for a small single premium. Some of them define small as anything less than $30k.

That is precisely what I have pending at the moment. Bug me every once in a while for an update. The good news is that they haven't rejected the filing (yet). I told the client that there was no guarantee that the IRS would accept the correction and so the client is prepared for an alternate correction (deemed default/taxable income - hopefully in current year rather than a prior year).

100% so far (1 out of 1 with a letter; there is also 1 currently submitted that we haven't heard back yet). What correction are you proposing?

I would not assume. Find out if Title 1 or not.

A typical Solo DB plan will not be subject to Title 1, so no SAR is typically required. I have a couple of atypical 1-person plans which cover non-owners. Those are subject to SAR (if not Title IV) or AFN (if Title IV).

It requires an amendment. And if the amendment isn't late per 2007-44 standards it isn't a corrective amendment. Why do you need it to be corrective?

"they don't want.....". Grow some stones and tell these guys that they adhere to qualified plan rules or they find another firm.

Yes.

I'm with you on the standing election to apply balances but not with you on standing election to add excess. To each his own style, I guess.

ETA????? The due date, without extension, is the end of the 7th month after the last distribution, so 9/30/2017 is correct. Just ask your software provider what to do. They all know. Or you can file an extension and hope the 2017 forms become available before 12/15/2017.