401kQ's

Tom you are correct. Post Year End comp is not included in the current year so the amounts earned their final weeks working in 2016 and paid in 2017 are considered 2017 compensation. Also, by plan definition this is not Post Severance Comp but regular compensation.

Thanks for your responses!

I have a cross tested 3% safe harbor plan. The plan uses W-2 compensation and excludes post severance and post year end compensation. There were a few employees who terminated 12/31/2016 but received their final W-2 in January 2017. I know that they should receiver the 3% safe harbor non-elective for 2017 However, if the profit sharing allocation conditions are you must be employed on the last day of the plan year or work 1 hour of service in the plan year, would they be entitled to the gateway contribution? Technically they did not work any hours in the current plan year even though they have wages and hours reported on the census.

Thanks for your responses!

No they are not an HCE. The plan excludes hourly employees and they allowed her to participate even though she was hourly. I know that you can self correct and do a retro-active amendment when an employee who has not met the plans eligibility requirements was allowed to participate but I am not finding much guidance on members of excluded classes being allowed to participate.

If a member of an excluded class was allowed to participate in the plan, do you need to retroactively amend the plan to allow for their participation and then file through VCP or can you just amend as part of SCP?

A client has chosen to use 1/1/14 - 6/30/14 to determine if it is an applicable large employer for 2015. They have chosen to use this time frame because they are a farming business with more employees in the later half of the year. If they have biweekly pay, how do we count full time employees on a calendar month basis? Are you allowed to use the weekly rule, where the period measured for the month must include the week that includes the 1st day of the month or the week that includes the last day of the month but not both? So it would essentially include 2 payrolls per month? Or is the weekly rule not allowed to determine ALE status?

During a plan audit, the auditors discovered that deferrals were not withheld for an employee who had completed a deferral election form. The plan was terminated, all participants paid out and final 5500 completed before this was discovered. The plan terminated because they were bought out by another company who sponsors a 403(b) plan. Should they self-correct by depositing the QNEC plus earnings from the terminated 401(k) plan into the current 403(b) plan?

Just wondering if people currently doing document restatements for safe harbor plans with an effective date 1/1/16 or are you waiting to later in the year to do your restatements for safe harbor plans?

I have a plan where the plan was originally a sole proprietorship who had earned income. Since then, the owner also started a corporation who is an additional adopting employer of the 401(k) PSP. The sole proprietor had loss -35,000 earned income for 2014. He also receives W-2 compensation from the corporation. The plan is a Safe Harbor 3%. For purposes of calculating his compensation for the safe harbor contribution, do you net the loss with his W-2 compensation or can you base his safe harbor contribution solely off the W-2 compensation and consider earned income for the sole proprietorship to be zero?

Yes they deferred. I just don't see anyway out of the safe harbor contribution for 2013.

I have a plan that gave the SHNEC notice for 2013. They renetly went out of business. Since they committed to the 2013 contribution its my understanding that there is no way around it, right? If it's not made, its an operation failure and disqualifying event. The plan is also top heavy for 2013. So if the plan wasn't safe harbor the 3% top heavy would would need to be made or it would be a top heavy viloation and also a disqualifying.... Anyone else ever have a plan where the safe harbor contribution was never funded?