DocumentDiva

I hope everyone is well. I work for a TPA Firm, and our main office address is in Atlanta, GA and I'm in Florida and we have others in South Carolina. The entire state of Georgia, Alabama, North Carolina and South Carolina and parts of Florida were given tax relief for victims of Hurricane Helene under Hurricane Helene Notice IR-2024-253. I would assume our clients could file under the Hurricane Relief extending the due date until May 1, 2025, even if they are not in the states with full relief because we are practitioners in the areas that were impacted. MOST of our client are in GA, FL, SC & NC. Now with Hurricane Milton I believe the entire state of Florida will now be given the same relief and not just certain counties in Florida impacted by Debby and Helene. Of course, we aren't advising this however, it's the reality that clients don't all have power or capacity to deal with 5500's at the moment. I'm curious how other TPA firms in the impacted areas are handling this. Thank you so much for your time and responses.

A plan requires a top-heavy minimum for all non-key employees. The rules state that it only has to be given to non-key employees still employed on the last day of the plan year. The plan has a participant that retired during the plan year that is receiving the matching contribution due to the last day 1,000 requirement being waived for participants that are normal retirement age. The same waiver is for any profit-sharing allocations. They would like to apply this to the top-heavy minimum allocation but I'm being told by our recordkeeping software provider that a requirement to receive a top-heavy minimum requirement is that a person has to be employed. Termination is not waived for any reason for the Top-heavy minimum allocation.

Many many thanks! This is exactly what I was looking for

I have two 401(k) Plans that are a controlled group, and they fail both 410(b) and average benefits tested separately. I'm testing them together, but the issue is one plan has a basic SHM and the other plan has an enhanced safe harbor match of 100% up to 4%. I believe that both plans should have the same match formula but I'm having difficulty putting my eyes on any articles or regs saying this to confirm what I believe. I read something recently where it mentions if there's a 3% safe harbor non-elective then both plans should have the same formula and the plan without the 3% would have to give the 3% to the eligible participants. Has anyone else ran into this issue with safe harbor match plans that are required to be aggregated for testing? Thank you so much!

Great point. The plan's definition of compensation is 415 safe harbor comp

I have a plan that deposits their 3% SHNE per payroll. Due to prior year calculation errors and numerous turnover at the plan sponsor they have asked me to check their deposits quarterly for accuracy. While reviewing the 2nd quarter deposits there was a participant that entered the plan on 4/1/2019. I did the SHNE calc based on the comp provided from 4/1 - 6/30. When I advised the client that there was a true-up due I was told that the calc was incorrect because the comp that was provided to me included pay that was earned from 3/17 - 3/30, but paid on 4/5/2019 and should not be included because it was earned before they were eligible on 4/1 even though it was paid on the 4/5 paycheck after the participant was eligible. I've never ran into this before because we have always asked plan sponsor to provide us comp from date of participations since we are a balance forward TPA and not daily val. The client contact wants something in writing from the document that tells her specifically what compensation to use. If I read the document under Adjustments to compensation is says that "compensation paid while not a participant in the component of the plan for which compensation is being used will be excluded". This reads to me that it should be calculated on compensation "paid" after the participants entry date and not "earned". Coming from a daily val TPA firm previously we did everything based on paycheck date so now I'm questioning what the right answer is. Has anyone else ran into this and can provide any advice or site from the Regs to help me appease the client? Any thoughts would be appreciated. Thank you!

Thank you everyone for your input. I agree that I've seen the record keeper include it as a contribution even when I submit them as earnings and I still count them as earnings and would explain the same to an auditor.

we have an ongoing debate in our shop on whether lost earnings on late deposits should be deposited as a contribution to the impacted participant OR as earnings? I've always had these deposited as earnings and I'm now being told they are a contribution to the participant. I feel silly debating the issue when I feel like the answer is in the what we call them "lost earnings".