ratherbereading

Maybe this will shed some light on your question https://www.morganlewis.com/blogs/mlbenebits/2020/03/hardship-withdrawal-amidst-the-covid-19-crisis

No, he shouldn't. However, that being said, I have a plan who has had 3 corona related distributions and absolutely none of the people are affected at all. They just wanted to be able to take a large distribution, and loans and be able to put off the loan repayments. Because it's up to the participant to self-certify, the plan sponsor/trustee ok'd them.

Thank you!

I have a 403(b) plan who calculates their matching contribution each year using compensation as of their fiscal year (e.g. this year's match calculated on comp from 7/1/2019 - 6/30/2020). Their plan year is 1/1 - 12/31. They have done this since before I came on board. Is there anything wrong with doing this? The document does not address other than to say the matching contribution shall be determined by the employer with respect to each plan year. Compensation is W2 wages increased by elective deferrals for all contributions/no exclusions.

Thank you Dave!

Got it-- thank you Kevin and MWeddell!

2 people whose comp is in excess of 80% of the TWB +$1.00. One is the owner who wants his contributions to max out. That means he gets an $18,600 profit sharing. His remaining contribution is $9,221.33, which added to 5.40% of his excess = $18,600. That means 3.29% goes to staff ($9.221.33/$280,000) -- does that percentage also go to Person #2 who has excess comp? See example below. Thanks!! EXCESS COMP. 5.40% OF EXCESS Remaining 280,000.00 173,679.00 9,378.67 9,221.33 18,600.00 3.29% 199,999.80 93,678.80 5,058.66 6,579.99 11,638.65 3.29% 54,000.00 - - 1,776.60 1,776.60 3.29% 71,848.75 - - 2,363.82 2,363.82 3.29% 62,960.00 - - 2,071.38 2,071.38 3.29% 55,304.25 - - 1,819.51 1,819.51 3.29% 96,949.98 - - 3,189.65 3,189.65 3.29% 22,222.00 - - 731.10 731.10 3.29%

Thanks Lou! I figured it out finally!!

I know how to figure a Integrate with TWB but for some reason this is confusing me. What percentage do you use for staff when 2 people (1 owner) have compensation in excess of the TWB?

Yes, I am sure they passed in 2018. Assumptions are the same. There were 8 NHCEs in 2018 and 5 in 2019. Yes, I know the term'd people do not get the TH since there is a last day rule. This plan isn't one where everyone is in their own group--- "all others" are in one group-- meaning non-partners. They did pass with a 7% to staff. The issue too, is the ages between the partners and NHCEs are too close.

Thanks Mr. B and Jakyasar-

Should know this but brain freezing ---- plan wants to max out 3 partners and give 2 other partners $20,000 each. Staff gets 5%. Employer $$=Profit sharing only, not a SH plan, no match. Plan is TH. Two Terminated participants not getting the 5% gateway OR TH allocation because they were not there on the last day. 401(a)(4) fails unless I give staff 9%. The scenario is very similar to 2018 and it passed with 5% to staff, no contribution to 1 term'd participant. Am I missing something?

I believe they will. I have a few plans who had to add loans so they could utilize the COVID loan feature.

That is not how our TPA is interpreting that...

Yes, I see your point. I misspoke

No, because that would be discriminatory. Why would he want to prevent active EEs from taking advantage of it if they are qualified individuals? If the plan does not adopt the plan for CARES then they will be subject to the 10% premature distribution penalty.

The rules are pretty clear. I don't think that qualifies as a Coronavirus loan. Maybe they could take an in-service if the plan allows or a regular plan loan. You are considered a “Qualified Individual” (and eligible for the CARES-related options) if you meet one of the following criteria: You have been diagnosed with a coronavirus illness by a CDC recognized test. You have a spouse or dependent diagnosed with a coronavirus illness. You experience adverse financial consequences as a result of a quarantine, furlough, lay-off, reduction in work hours, business closure as a result of the virus, or because you cannot work due to an inability to obtain child-care as a result of the virus. You have experienced other factors determined by the Secretary of the Treasury

Deferrals and vested employer sources. The lesser of $100,000 or your vested account balance. They should be sending participants a Summary of Material Modifications with all the information, that's what we sent to our clients detailing the changes and their options.

No I don't think you can. You can use them for 2020. At least that's what the office I work in does.

Maybe it's not important to them? Maybe they forgot to add the other credentials? Designations mean you are good at studying for a test. I've known lots of "professionals" with designations who didn't know anymore about retirement plans than the dogcatcher, and people with no designations who were brilliant! I wouldn't make too much out of it.

My father went to Rennselaer but back in the 40s! And he did not become a snowboard instructor...

It depends on what the plan document says re. compensation. Does it include bonuses? Does it include full-year compensation or compensation as of participation? That should be addressed in the Summary Plan Description you should have received from your company.

Thankfully, not yet, but I'm sure it's coming.

Hmmm. I need to get some popcorn for this thread!

They can, and do, contribute more, it just has to pass testing in certain circumstances. Personally, I hate the mindset of "leveling the playing field". But that's another story for another day.