Mr Bagwell

No. Can't answer this.

The safe harbor match would satisfy the top heavy minimum IF the sh match is equal to or greater than the full year comp x 3%.

Another thing to be aware of is coverage testing. If the plans need each other to pass coverage, the separate profit sharing could be a problem.

Thanks for the help!

Sorry on the confusion.... The change has not taken place yet....but. The short plan year will be 7/1/2019 to 9/30/2019. The EOB version 2013 had an example that said the eligibility comp period would be from the beginning of the plan year 7/1/2019 to 6/30/2020. And another eligibility comp period from the beginning of the plan year 10/1/2019 to 9/30/2020. The employee in question was hoping that he would somehow become eligible to participate quicker because he became full time May 2019 and would complete 1000 hours of service coupled with the plan adding a short plan year. I just don't think that will be the case. My question is when would the employee become eligible for the plan? I'm leaning towards 10/1/2020, but am not sure and can't prove it.

Have a plan that is wanting to change their fiscal year end from 6/30 to 9/30 and I have a question about entry dates. 1 year, 1000 hours service and semi entry (7/1 and 1/1) are eligibility requirements. (Entry dates will change to 4/1 and 10/1) I understand that eligibility computation periods are created from 7/1/2019 to 6/30/2020 and 10/1/2019 to 9/30/2020 because of the short plan year. I understand that the plan may not use the short plan year as the computation period and prorate the hours of service requirement, unless the overlapping period alternative is provided to employee who cannot satisfy the proration requirement. This alternative is not the subject of my question at this point, but I know it's available if employer would like to go that route. 1. Employee A has been excluded from the plan for several years because he could not satisfy the 1000 hours requirement. He is on the 1000 hours watch from plan year to plan year. However, the employee went full time May 2019 and is expected to satisfy the 1000 hours requirement during 7/1/2019 to 6/30/2020. If there was no plan year end change, the employee would be eligible 7/1/2020. It doesn't seem right to me that the employee have an entry date of 10/1/2020. Is there an implied entry date of 7/1/2020 still because of the eligibility computation period of 7/1/2019 to 6/30/2020? I'm missing something..... 2. What pitfalls should I be conscious of?

If medical is under a section 125 plan, I would say no, medical is not a fringe benefit.

Tom had my back on this one as I was off for the July 4th holiday..... I was thinking that I would tell you to defer as much as you could to the maximum and see where the testing shakes out for 2019. If no refund, then get to the maximum again for 2020.

Yes, catch-ups are available each year for those 50 and older. Any chance you are a Highly Compensated Employee? You had compensation greater than 120,000 in 2018 and/or greater than 5% owner in said company that you are deferring?

Yes. :)

I looked into this last week as I was curious..... I don't have a specific answer, but I bet someone does. My research was the EOB 2013 Edition. Section 3A.142 Accruing Benefits This section was bolded in the EOB, it was pointed out by Fid Gui Con above.... "[A] plan which is not a defined benefit plan.... may provide that an individual who has been a participant in the plan, but who has separated from service before the date on which the employer's contributions to the plan or forfeitures are allocated among participant's accounts... does not share in the allocation of such contributions or forfeitures even though the individual is credited with 1,000 or more hours of service...." The very next item in the section is "1. Hours of service condition. A common accrual requirement in a defined contribution plan is that the participant must satisfy a minimum hours of service requirement for the plan year. This minimum requirement may not exceed 1000 hours. " How Sal connected the 2530.200b reg to 1000 hours, I do not know. I'm certainly not saying Sal is wrong, just that he connects the reg with 1000 hours. I'm sure someone can opine on the connection!

Are Life Insurance Companies comfortable with policy just under the MEC? I know "MEC'ing out" is really bad.

ldr, From a Qualified plan perspective, IMO, the Safe Harbor Match is the only viable option that would even motivate me to want to have this plan. (To each his own, I'm not judging) A non safe harbor plan for the HCEs will be a disaster because the NHCE numbers will kill the potential for any substantial HCE deferrals. So you would have HCEs not getting to defer much, and the NHCEs aren't deferring much. Add on top of that 1800 employees to track for census. Any chance the one owner will defer to the plan? I would hate for the plan to somehow go Top Heavy.

Thanks

Thanks for the comments Lou. The Master Text I reference doesn't have a 1.88, just goes to 1.71. I did pose the question to Corbel/FIS. They referenced me to the Change in Employment Status section. I didn't find that answer to be helpful. Here is the wording for the section Part-Time/Temporary/Seasonal Employees. See Section 1.22(D)(4). A Part-Time, Temporary or Seasonal Employee is an Employee whose regularly scheduled Service is less than 1,000 (specify a maximum of 1,000) Hours of Service in the relevant Eligibility Computation Period. [Note: The "relevant" Eligibility Computation Period is the Initial or Subsequent Eligibility Computation Period as defined in Section 2.02(C).] Underlined emphasis mine. 2.02(C) goes on to say, the Plan measures Subsequent Eligibility Computation Periods in accordance with the Employer's election in its Adoption Agreement. I think I am in a rock and a hard place. I can get the future fixed. Not sure how to get the past resolved.

I'm pushing this back to the top of the list to see if anyone has any thoughts on this. Thanks

I have a plan that has quarterly entry for participation. (no age requirement) The plan excludes Part -time, Temporary, and Seasonal employees. In the Corbel document, 1,000 hours of service was used to describe the PT, temp, and seasonal employee. Here is my dilemma, because the plan has only the Qtrly entry requirement, the Subsequent eligibility Computation Period was not completed. Plan year and Anniversary year are the common choices. If an excluded employee would happen to not work the 1000 hours for the next year, that's fine, they would not become eligible. But what subsequent eligibility comp period do I track next? I cannot find anything in the master plan to default to plan year or anniversary year. The plan needs to choose plan year or anniversary. Am I missing another provision in the document that might clear this up?

My question is "does this special safe harbor correction apply to both the ACA and EACA"?

BG, I just read this section after you posted because I was curious..... You read it right. No QNEC for missed elective deferrals. The participant would get match. AND, that is a long time!! So does the question become "why the special treatment for an automatic contribution arrangement plan"?

Talk about micromanagement from the TPA.... tell them to take a pill and relax. If the participant has a need to the maximum and has paperwork to support it, they are going to get a check for the maximum. We get participants asking the hardship availability more often than you think. Look on the bright side, in less than 6 months it won't matter because the basis equation is out the door.

Yes. Two different animals in play here.

Don't forget the ADP test.... although I highly doubt (and hope not) there are any HCEs in the OEE's group.

Automatic revocation of spousal designation. A divorce decree revokes the Participant's prior designation, if any, of his/her spouse or former spouse as his/her Beneficiary under the Plan unless: (a) a QDRO provides otherwise; or (b) the Employer in Appendix B elects otherwise. This Section 7.05(A)(1) applies solely to a Participant whose divorce becomes effective on or after the date the Employer executes this Plan unless: (i) the Plan is a Restated Plan and the prior Plan contained a provision to the same effect; or (ii) regardless of the application of (i), the Employer in Appendix A provides for a special Effective Date for this Section 7.05(A)(1). Straight from the Corbel document.....

The plan document already dictates the allocation requirements. What does the plan doc say? Profit sharing may bring unnecessary top heavy requirements. Be aware.

I was thrown off by this yesterday too... however, I made my own opinion that the OP was saying that a safe harbor match, which should be greater than 3% was satisfying the top heavy minimum contribution. And I was ok with that...... :) I didn't want to go down the rabbit hole of 3% nonelective vs. 4% match. So I answered No.... lol.