Mr Bagwell

Awesome!!

I would just like to thanks everyone for the advice and for those that can't give advice, "non-advice". There has been so much help and guidance this board provides. I'm not sure what I would have done without it!! Appreciative is not descriptive enough. It's time to switch professions. Again, thanks to all of you.

That's bad.....! But good. Merry Christmas!

I would get the distribution/correction done this year so all the 1099-Rs are done for the tax calculations. It's done and over with and you are not thinking about it in 2025.

I understand that you are saying that Mr. Guy is not terminated but just not working, correct? If so, I would say that he is an active employee, so no RMD. Keep him high on the list of "always checking for". You never know what they will code for a term date if he doesn't come back to work in April of 2025. Just my two cents....

Yes, you can do this.... Tracking the plan year hours and then tracking anniversary hours will be challenging and I do not envy you or the process. I can't think of any additional testing. You just need to know who and when everyone is eligible. Maybe they can add monthly entry for all sources? LOL Good luck.

Keith, Are you implying that the QNEC for missed deferrals is going to 15,250? If so, the employee would be able to defer via payroll another 15,250. The 15,250 correctly deferred to the 401k plan would be the amount on the W-2. As Draper55 opined, the participant is limited to the QNEC and Deferrals by the 402g limit for the year. The participant does not get their cake and get to eat it too.... Hope that helps.

I would suggest this is not a forfeiture, but rather something that should probably go to an unallocated account and used up as soon as possible.

Peter.... I know of fee agreements that say that contribution corrections/earnings corrections are minimum $100 and $100 hour there after. I'd bet most TPAs or Recordkeepers have the provision to charge for these services.

Why not use the highest performing fund for the large fund? Sometimes whining does help.....lol.

Thanks CB.... Yes, 2 plans. Plans are being kept separate for now. No cross eligibility intended. I just wasn't sure if the ONLY employees affected by transitioning would be discriminatory. The demographic of the employees moving from one plan to the other is like 2 HCE and 20 NHCE.

Company A is purchasing Company B. Stock Transaction. Company A is transitioning employees to Company B and wants to ensure that the employees in the transition get the annual PS. PS has last day and 500 rule. Can we amend the plan for just the employees transitioning? Or, do we need to amend the plan to remove allocation conditions for all employees for the plan year? I feel like we need to remove the conditions for all employees for the 2024 for Company A..... Thoughts? Thanks

Safe harbor match does not factor into passing cross testing.... that's why you design cross tested with 3% safe harbor safe harbor 3% is used for everything to pass testing and remember... you have to pass gateway before you can cross test.....

1. Seems like this would be an Failure to Implement 2. I believe you can do more than a 50% QNEC.... I think I lean to the fix of: IF the dollars submitted to the plan were "correct", I would shift the money from the Deferral source to QNEC and move along. Earnings are done and aren't a factor because the "correct" amount was invested into the right funds. This also alleviates the employer trying to recoup funds from the employee. To be clear, I am suggesting a 100% QNEC.

Maybe, but why? Seems like a difficult plan to administer. 4 of 5 weeks works greater than 20 hours and then receives match? And 1 week the don't get match? Ugh!! Plus notices each year. No thanks. Just give them the match and move on. My two cents.

The earliest the employee could have become eligible would be 10/1/2023. So you are doing well. To be more specific, did the employee work 1000 between 7/26/2022 and 7/25/2023? If so, 10/1/2023 entry date. Needs the 3% sh from 10/1/2023 to 12/31/2023 if plan specifies participating comp. If no 1000 hours the first year of service, then does plan shift to plan year? it could be possible the employee is not eligible 10/1/2023, but worked 1000 hours in 2023 to become eligible 1/1/2024. I don't see a path to 7/1/2024 unless employee turned age 21 in 2nd quarter of 2024..... and had the required hours prior to age 21.

I did not know Mike personally... However, I knew Mike was a character..... he will be missed!

Eligibility question for you....... What are the eligibility requirements? Got it, the plan was established in 2023. When was the NHCE hired? Before or after the plan was established? On a side note.... I think 2024 will be an important year to get this plan off on the right foot. Sounds like 2023 and 2024 are not TH. This is good. When the NHCE becomes eligible, I don't see a path to passing the ADP unless the NHCE defers a large %. Don't see that happening at 30k salary. Are the HCE's deferring decent percentages? Maybe a QNEC is the best play to pass ADP? When this pops to TH, does the Employer understand the 40k plus in contributions commitment (based on a rough estimate of 2024 salary cap of 345,000) to the Non-KEY? I would lean to a SH 3% plan with no PS for a year or two. Let this plan settle out..... Yeah, you could cut out the HCE from the SH, but will the HCE be happy when they find out they could be getting 10k plus from the Employer and not getting it? You could at least pass ADP with this scenario, but if the Employer does PS, the TH comes back in for the Non-KEY highly paid. There is a lot of communication to be had with this plan. It becomes more complicated the more I think about it.....

To be clear.... you don't have any NHCE eligible for the PS at this point? Because not eligible is different than not getting PS. Why group instead of "each in their own group"? I've found each in their own group has been a more sane approach. Plus you get options to help pass.

Look for the term "Forfeiture Break in Service" in your plan document. That's what ours uses. After 5 Breaks in Service the non-vested funds are forfeited. I'd guess the first Break in Service was 2019. Forfeiture in 2024 is right on track.

Thanks for the comment, Bri. We will verify as you suggested.

We have a question into Relius asking why the system is making an employee 100% vested when said employee terminated prior to Normal Retirement age. Employee does not have the required 6 years vesting service to be 100%. It appears that Relius is only looking at age of the employee and not taking into consideration term date...... However, he is the response we get. "The participant still has a balance and a forfeiture event has not occurred. So, if they reach retirement age with their balance still in place, they DO become 100% vested as they have satisfied the plan's requirements. That is what the regs say. Unless their document has a provision that excludes terminees who reach retirement age from becoming fully vested, but they should check their document and check with their own experts--then Relius is doing things correctly." What does a forfeiture even have to do with this? What regs? It's a Relius Document that says the employee would need to be employed on or after your Normal Retirement Age. The employee did not meet employed at Normal Retirement Age. Am I missing something about a forfeiture event and not being employed at Normal Retirement Age? This would be new to me if I am..... Thanks

This is not an argument against you Austin...... just still trying to wrap my head around the plan. You have 2 milliion in compensation for Non-Keys and let's guess 3 Keys....(or let's say it's 8 Keys, don't matter) You are rightfully concerned the plan will go TH in 3 years or quicker..... it appears the Keys are deferring to pass ADP and the Non-Keys are lackluster causing concern. IMO the employer needs to bake in 3 to 4% from somewhere and go safe harbor. Based on the scenario, the business is making money. Unlock the deferral limits with safe harbor and make this more normal than abnormal. You're working too hard for a plan that wants to limit the Key deferrals. And why bother having a plan if non-Keys are sucking the life out of the plan and the Employer is not willing to go safe harbor? And then the Keys can't defer 3 out of 5 years..... no thanks. Or I'm missing something of big importance....

Thanks for the context....

interesting topic..... does the employer put in any Employer contributions? Just curious?