Mr Bagwell

Annie, The customer service is not what it once was..... very slow resolution timing as you know. I would suggest you get used to the Portal and figure it out. It's their baby and they ain't giving it up. They have had correspondence about IE. It wasn't that long ago... late April, early May.... You have to make Edge browser emulate IE..... lol.... not making that up. Good luck.

I'm trying to understand the scenario.... didn't have an account...meaning the employee was eligible and didn't have a plan account open? Or the employee wasn't eligible and didn't have an "account"? Sorry for the confusion....

Now you get to have the conversation about if the plan gets to use the SH no TH exclusion. Single eligibility, only deferrals and safe harbor contributions..... no top heavy required. And if plan has partial plan compensation, the SH NEC is only on the 156 hours of compensation.

Check the plan document for language describing Participation upon Re-employment. My guess is the employee was eligible in 2021 possibly on 8/5/2021... but this as-needed basis is going to muddy up the conversation. You can research Service Spanning Rules also for information regarding entry date. Hope this helps.

(Comments for you and those in the future that are sharpening their RMD tools) I attended a class that harped on 2 important concepts for RMDs. 1. Required Beginning Date and 2. Distribution Calendar Year. I haven't mastered these two concepts, but I always keep them in mind. To tell you the truth, a co-worker does the processing of the RMDs so I don't stay as close as I should to RMDs. Do your researching, but I suspect the deceased participant's Required Beginning Date was 4/1/2022 for a Distribution Calendar Year of 2021 as the date of death is the Separation of Service, 12/22/2021. Now you are past the 4/1/2022 RBD.... probably not a fault of your own, but things may be more complicated. (50% excise tax) Hope this helps.

So the employee terminated and died in December 2021? Little confused on the details.

While these types of arrangements are not always complicated, I find them a little more mentally draining. I always wonder "what am I missing"? As a practical matter....why the 3 months? Sync up the 2 eligibilities for simplicity and efficiency..... just my 2 cents.

One of the Partners in the 401k plan has negative self employment income (line 14a). Of course, the Partner deferred to the plan.... 12,000. I bring this up to the CPA and he is saying that while the Partnership lost money, the PPP forgiveness is creating a positive situation for the Partner. Do I care about the PPP forgiveness and just go with the line 14a? In this situation I could leave 6,500 catch up in the plan and 415 refund the 5,500? Need some insight on this situation on what to do. Thanks

Don't quote me, but I don't think so. I could see someone making a strong case that because the plan does not get the top-heavy exemption and the newly eligibles in 2021 aren't getting 3% from the employer based on full year comp, they new eligible should get bumped up to 3%. The murky waters of a once dual eligible plan...... gotta love it...... except I don't.

My initial thought is the rehired employee is the only one on the non-safe harbor side of the equation and will need the Top heavy contribution. Everyone else is on the safe harbor side of the equation and Not needing a top heavy as they are getting the safe harbor contribution. Very interesting set of circumstances...... curious to see other's thoughts.

Ah, I see the difference that you are questioning.. yeah.... good luck with that....

2 thoughts on this subject. My two cents... take it for what it is worth..... 1. FIS is doing an Advanced Pension Conference on Feb 1-3, 2022 and one of the topics is Recommend the right definition of compensation for a particular plan sponsor. so you may not get a response from Derrin or Ilene this week. LOL 2. I did my own analysis on this a few years ago as an CPA was questioning the employer about Section 125 deferrals and whether it was to be included as compensation for profit sharing purposes. The CPA wanted it out of the calculation. The plan was w-2 comp with deferrals added back in. I concluded that deferrals to a section 125 plan was added back and used for profit sharing compensation. See EOB 2021 1A.118 for discussion on "gross up" compensation. Again, my 2 cents....

Exactly. The 403b I have right now has a ton of low paid employees. the 403b is the right choice. the ACP isn't good, but the lone HCE can defer to max.

The 403b may be a huge difference maker if the plan is not a safe harbor design as the ADP will pass with universal availability. Some non-profits don't have/don't want to spend the safe harbor dollars, but the HCE wants to defer the max. Under the 401k this would be a problem. Under the 403b this is not a problem.

You two are scratching me where I itch and I'll be waiting to see what you find out. I have suggested the safe route of counting the service for eligibility and vesting also. This is probably one of the top 3 painful topics me for to discuss with Employers that use temp services......it all seems so murky.

Still very little to go on here.... But... I think I'm safe to say there is no related match as 2019 max compensation divided by max deferral (19,000 / 280,000) is 6.79%. So as compensation gets lower percentage goes up. So this 200 in the scenario has not been matched. Safe Harbor? What match formula you want to scenario? Basic Match. Probably no attributable match. Enhanced match, need to know formula, as there could be attributable match.

2019? What is match formula? What is compensation?

Not sure I agree with that because the carve out allows the plan to either use the HCE in with the other HCEs or to be used with the separate testing. This can be advantageous because maybe the plan can use a low ADP % to drag down the overall ADP %. Or maybe a high ADP % can be drug down by the other HCEs. Not really different if you have a great number of employees that are potential excludables that defer well. These might help the plan pass ADP for everyone rather than just being in the excludable testing. Or the potential excludables defer rather poorly and using carve out helps the ADP test pass or reduce refunds. I see it as flexibility more than anything else.

It looks like a mistake to me too. With an integration level of 0%, wouldn't the employee be getting 5.7 on comp plus excess comp? So the first dollar is 2 dollars..... at 5.7. Who knows? Maybe someone else has seen something like this....

Got a new plan to us. The plan document is written with 0% integration level on a 2 tier non-elective. Why would some do this? What is the logic? I don't get it.

Plan doc probably has the term "disclaim" in it. FIS document does.

For example, assume that a 401(k) plan includes a safe harbor match as well as an additional discretionary match. This plan requires participants to meet a last day requirement in order to receive the discretionary match. Charles is an NHCE who makes elective deferrals into the plan each year, including in 2012. Charles terminates employment in October 2012, and therefore is not eligible to receive a discretionary matching contribution for 2012. Janet, an HCE, also makes elective deferrals to the plan each year, including in 2012. Janet remains employed with the company for all of 2012 and receives both a safe harbor match and the discretionary match. Janet will receive a higher ratio of matching contributions since she receives the discretionary match and Charles does not. The plan is therefore in violation of the rules discussed above, preventing the plan from benefitting from the safe harbor rules and requiring it to satisfy ADP testing, even though the safe harbor match must still be made and be 100% vested. (Emphasis mine) EOB 2021 11.574 and 11.575 same context, same situation... "the ADP test is still waived," .....perform the ACP test for all matching contributions. What nuance am I missing where the link says ADP testing needs to be satisfied and the EOB says the ADP is still waived? later add: EOB 2013 edition 11.568 1.e.1

"Because of the pitfalls described below, ftwilliam.com documents do not set out separate 'safe harbor' and non-safe harbor' matching contribution sections. Instead, we provide flexibility within the single matching contribution section to specify exceptions and special rules." I would check to see the if the ftwilliam document still does this. The above link is from 2012. The FIS document does separate the safe harbor and non-safe harbor matching contribution sections. You can select in the document to ACP test the additional match.

Valid point. I made the assumption that there were no deferrals from 1/1/2020 to 9/30/2020....

The ADP safe harbor is not in jeopardy. However, you will most likely have to ACP test the discretionary match. Is the plan top-heavy? This type of arrangement lends me to think the top-heavy exclusion is lost and the plan may have to cover some non-deferring employees with a top-heavy contribution. I don't like this plan design for a safe harbor plan, but I say that alot.