Towanda

We took over a plan in 2016 that uses prior year testing. I need to run the ADP test for 2016, and I cannot find where in Relius I would enter the prior year NHCE ADP so that I can run the 2016 test. Is there a place it can be entered, or should we have created a 2015 plan year for this purpose? Groan. Relius is closed, it's Friday, and I'd like to get this completed before Monday if anyone can provide assistance. Thanks!

That is correct. It was a joy to calculate

Handy dandy feature, particularly in this plan. Their Prevailing Wage contributions are enviably large Add to that, the QNEC feature makes them relatively untouchable in an employee's working years, so these participants are genuinely building toward retirement.

Kevin C: In this particular plan, the Prevailing Wage serves as both an offset and a QNEC. It can therefore offset a Safe Harbor Match. These are elections in the Adoption Agreement.

TPApril - According to TAG, any NHCE who is entitled to an employer nonelective contribution (which includes the Prevailing Wage contribution) must get the Gateway Minimum. However, if the plan separately tests the otherwise excludable group, those participants do not need to get the Gateway.

Plan is not Top Heavy and probably never will be. 401(k) w/ Safe Harbor Match - immediate eligibility Cross Tested Profit Sharing - 1 YOS, 1,000 hours, Last Day rule, everyone in their own group. Business owners use the Profit Sharing to maximize their benefit at the end of the year. Employer wants to keep Profit Sharing contributions to an absolute minimum, excluding as many employees as possible. Prevailing Wage - may be used to offset any required SH Match, if applicable. Who gets the Gateway? Employee 1: Made no 401(k) deferrals. Got no Prevailing Wage. Met 1 YOS requirement in a prior year. Worked 1,000 hours and was employed on the last day of current year. Employee 2: Deferred 5%. Got a Prevailing Wage contribution that represented 4% of compensation. Employee 3: Made no 401(k) deferrals. Got a Prevailing Wage contribution that represented 1% of compensation. Employee 4: Terminated prior to the end of the year. Didn't defer. Got a Prevailing Wage contribution representing 4% of compensation. Where the Gateway is concerned, do I only care about employees who received the Prevailing Wage contribution, or does an employee qualify for the Gateway simply by virtue of having provided one year of service and being employed on the last day? Thanks!

Thank you so much for your input. My concern was with the plan's Top Heavy status . . . 11.42% if the rollovers are unrelated, and 64% if they are! Unrelated rollovers works for me

A veterinary practice was a sole proprietorship. The retiring veterinarian sold the practice to a young veterinarian. The retiring veterinarian's 401(k) plan was terminated, and participants were given distribution paperwork when it was time to wind down the plan. The practice has continued under new ownership (sole proprietor), with a new EIN, etc. From an employee perspective, all employees have remained and continued their service as if nothing had changed. The new veterinarian started a new 401(k) plan immediately, so there was no gap in providing a retirement plan benefit for the employees. Some employees had elected to roll their funds from the prior practice's plan into the new plan, and others did not. For those employees who did elect to roll their funds from the prior practice's plan into the new practice's plan . . . is that considered related rollover money or unrelated rollover money? I know this question is beyond basic, but I can't find any information that points directly to this kind of situation. Thanks!