Tom Poje

I'm not even sure what you are looking for. for example Code Sec 401(a) Requirements for qualifications and it lists all the basics. Since these are required, if you didn't follow even one of them in operation, then you have failed to meet one of the requirements or are you saying yes, while these are required you don't have to follow them in operation because in operation means something else? https://www.irs.gov/retirement-plans/a-guide-to-common-qualified-plan-requirements https://www.irs.gov/retirement-plans/tax-consequences-of-plan-disqualification

Q and A ASPPA Conference #9 2004 (of course such Q and As might not reflect an actual Treasury position, but I have generally found them reliable) If a plan document provides that the administrative committee may limit HCE deferrals in order to prevent ADP testing violations, and the plan administrator takes that action through resolution and not by plan amendment, is this considered to be an "employer-provided limit" so that contributions in excess of this imposed limit are eligible to be treated as catch-up contributions? A: Yes Is there any availability issue under 414(v) or 401(a)(4), since the limit applies only to HCEs if all NHCE employees can defer at that level, just not as catch-up contributions? A: No

I was going to say roughly the same thing, I would much rather it tell me what last year's number was (without me having to look it up on last year's form) and I increase it if necessary. If my count for the new year drops for some reason, I need to investigate why, it implies last year's count was wrong for some reason. e.g maybe someone they reported last year as active was terminated and was zero vested so should not have been included.

you are correct, FTW simply rolls last years data to the new year. How in the world would it know who entered at 1/1 (unless you are also using their admin software and somehow it tied into that, but I wouldn't know - or I suppose if it also had a Vulcan mind meld and 'knows' who enters 1/1) Therefore, it only gives you a starting point that needs to be adjusted. I would hardly say "they do not think its a big deal", but rather, knowing it is how the software works!

more info needed. there is no requirement at this time that a plan maintain a 401k plan (the govt would like every company to maintain some type of plan), so the question is whether you actually have a plan in the first place.

if the plan is top heavy, there may be other issues if assets are not distributed timely. (usually within 1 year) A plan will be considered to be terminated if there has been a formal termination date. At the 2010 ASPPA Conference (Q and A #3), the following question was asked: DC plan is top heavy and has a plan year ending 12/31. The plan terminates on September 15, 2010. Normally, TH minimums are provided only if the employee is employed on the last day of the plan year. (Assume that there are salary deferrals during the year so that, if a top-heavy minimum is required, it needs to be made.) The IRS response was: Of course, if there is no employer contribution, there would not be an obligation to provide top-heavy minimum contribution. But, if there were contributions to keys during the year, including elective deferrals, there is a top-heavy minimum based on compensation and employment through 9/15/10. Plan must liquidate within a reasonable time under Rev. Rul. 89-87 or else 9/15 date may not be reasonable. There is effectively a short plan year for top-heavy purposes.

you could always run the ADP test using total comp

according to the folks at social security (page 5 of their handout) In 2019, a person younger than full retirement age for the entire year is considered retired if monthly earnings are $1,470 or less. I don't think it mentions what happens if you are past full retirement age, but this is what they consider 'retired' before then but what the heck. how work affects your benefits.pdf

no need to terminate, just convert the plan for instance the ERISA Outline Book points out (emphasis mine) Chapter 11 section XIII part D Part D., Plan year must be the calendar year Rev. Proc. 97-9, section 2.04, clarifies that the plan year must be the calendar year if the SIMPLE-401(k) provisions are adopted. Also see Treas. Reg. §1.401(k)-4(g) (December 29, 2004). The IRS has taken this position because SIMPLE-IRA plans under §408(p) must define the plan year to be the calendar year, and IRC §401(k)(11)(D) incorporates the IRC §408(p) definitions by reference. If an existing 401(k) plan has a fiscal plan year, the plan year must be amended to the calendar year if the plan is being converted into a SIMPLE-401(k) plan. See Form 5308 for instructions on whether the amendment of the plan year is eligible for automatic approval or whether Form 5308 must be filed for IRS approval on the amendment

I would argue this is the issue of payroll periods are paid after the fact, and the logic of 'the first few weeks" rule applies. Instead of the dates posted above change them to the end of the year and assume the last paycheck was in the following year. or change the dates below to "ee quit in March and received a last pay check in April" 2009 ASPPA Conference, Q and A 48... 1 of 6. An employee terminates in December 2009. A final payment of salary due for services is made in January 2010. The plan does not use the “first few weeks” rule in the IRC §415 regulations to treat the January payment as made in 2009. The plan year is the calendar year. The plan includes a section 401(k) arrangement that defines compensation eligible for deferral to be section 415 compensation. Is the individual included in the 2010 ADP test, even though he terminated employment in the 2009 plan year Yes. Since he could defer out of the compensation paid in January 2010, he is an eligible employee under the 401(k) arrangement for the 2010 plan year. The 401(k) regulations do not treat active and former employees differently 3 of 6. Suppose instead that the plan is a safe harbor plan that provides the safe harbor nonelective contribution. Is this individual entitled to that contribution? Yes. Since, as discussed in Q-1, the individual is treated as an eligible employee for 2010, he is entitled to a safe harbor contribution. However, if this individual is an HCE, and the plan does not provide the safe harbor contribution to HCEs, then no safe harbor contribution is made on his behalf. The same answer would apply to a safe harbor match if the individual made elective deferrals out of the 2010 compensation

well, the preferred method would be to file electronically using e-fast2 as a one person 5500-SF, but unless you know someone to do that for you paper filing is ok. I don't think it matters if you cross out 2018, the fact it is coded as 'final' should be enough for the folks there, along with the dates you entered. I see you can fill out the form online on the computer, print and mail in https://www.irs.gov/pub/irs-pdf/f5500ez.pdf

the FT William document has the following language. the key point being the last NOTE yes, you can do an allocation other than annual BUT any other choice than annual (end of the year) might cause a violation of the regs. I would say that implies a possible catch-up just in case the 3% wasn't allocated over the whole year (or from date of participation) 22. Allocation of Profit Sharing Contributions a. Profit Sharing Contributions are allocated to Participant Accounts at the following time(s): i. [ X ] End of Plan Year ii. [ ] Semi-annually iii. [ ] Quarterly iv. [ ] Each calendar month v. [ ] Each pay period b. Minimum and Maximum Profit Sharing Allocations i. [ ] Allocations of Profit Sharing Contributions for a Participant shall be subject to a minimum amount: ii. [ ] Allocations of Profit Sharing Contributions for a Participant shall be subject to a maximum amount: NOTE: Any service requirements specified in D.12 through D.15 shall be applied pro rata to the period selected in this D.22a. Any last day rule specified in D.12 through D.15 shall be applied as of the end of each period selected in this D.22a. NOTE: Selection of D.22a.ii through D.22a.v may result in the Plan not meeting a Code section 401(a)(4) safe harbor allocation formula within the meaning of Treas. Reg. 1.401(a)(4)-2(b)(2).

I am a bit confused on the data. you indicated they are wanting to make a change, so I guess it hasn't taken place yet. you noted the person will work 1000 hours for the period 7/1/2019 - 6/30/2020, and would normally enter 7/1/2020. you indicated dates would change to 4/1 and 10/1. so does that mean the short year will be 7/1/2019 - 3/31/2020 and the person won't have worked 1000 in a 12 month period preceding that date?

this is one of those areas in which there is no guidance if it was ADP testing (from ERISA Outline Book, Chapter 12, VI B7). [in other words, to have the HCE show as 0% on nondiscrim test might be considered too aggressive 7.a.HCE takes no compensation for plan year. This issue also arises when an HCE, particular one who is an owner of the plan sponsor, does not receive a salary, and does not otherwise receive any compensation for the plan year. This is another one of those situations where there is no clear guidance from IRS, and it may place a plan administrator "between a rock and hard place" to resolve the issue. The more conservative approach would be to treat the HCE as not eligible, based on the discussion in the prior paragraph. Of course, in many cases the employer would like to treat the HCE as eligible, and then calculate the HCE's deferral percentage as 0% for ADP testing and ACP testing purposes. This is probably too aggressive a position. Even if the HCE is treated as eligible, should the deferral percentage actually be 0%? A case could be made that to defer $0 out of zero compensation is actually a 100% deferral. Given these mathematical gyrations, it is probably a sounder approach to treat the HCE as ineligible until formal guidance is issued by IRS. The IRS acknowledged this to be a reasonable approach at the ASPPA 2000 Fall Conference in Washington, D.C., in a "Q&A" session with IRS representatives. In the Q&A Session, the issue dealt with a partner in a partnership whose earned income was negative for a plan year.

1.402(g)-1(e)(3)(iii) Distribution of excess deferrals after correction period If excess deferrals (and income) for a taxable year are not distributed within the period described...they MAY ONLY be distributed when permitted under section 401(k)(2)(B) ........... so if it was a single plan involved, plan would be disqualified because it took deferrals in excess of the limit. but EPCRS is there to prevent disqualification. but when more than 1 employer plan is involved, there is no plan disqualification issue, so no correction needed.

that would be my understanding since the plans themselves have no disqualifying event

CPI was released this morning for June 256.143 April was 255.548 and May was 256.092 so this 3 month period = 767.783 (last month I only used the May value *3 plugging in the formula yields a catch up limit of exactly 6500 and a deferral limit of exactly 19,500. quite amazing. so if those numbers hold for the 3 month period Jul/Aug/SEpt

ha ha ha. I thought about this some more. the whole thing is a moot point. How is the Form 8955-SSA information used by the government? Although filed with the IRS, the information is shared with the Social Security Administration (SSA) who maintains it in a database. When individuals apply for Social Security benefits, SSA queries its database and notifies applicants that they are entitled to benefits from the plan. This is why we suggest un-reporting former employees once they have taken a full distribution. That employee may not remember that they already received their money from the plan, and it can be a tall order to try to explain that fact when they are holding an “official” letter from the government that says they are entitled to a benefit. https://www.dwc401k.com/knowledge-center/form-8955-ssa-faqs so, at the latest (age 70) the person starts collecting Social security. at that time the govt sends out a note "You may have $ in a plan". they only do that once as far as I know. so the person involved should have already received that letter, since they are past age 70 and are already collecting SSA. . so I guess they could be on the SSA list as an A forever and it wouldn't matter!

there are some things that are never pro-rated HCE determination. The look-back year is defined as the 12-month period preceding the determination year in accordance with Section 414(q). The period of time considered for vesting purposes must be a 12 month period. Thus, a plan amendment changing the vesting computation period only complies with the regulations if the first vesting computation period established by the amendment begins before the last day of the preceding vesting computation period. An employee who is credited with 1,000 hours in both the vesting computation period under the plan before the amendment and the first vesting period under the plan must be credited with two years of service for vesting purposes. [Labor Reg. § 2530.203-2(c)]

I thought the whole concept behind the form was a 'just in case the participant moved on' and forgot or didn't know he had $ somewhere. If he is receiving min distribution, then he must know he has $ in that plan. just what the heck is he going to do when he receives the letter from the SSA telling him he might have $ in the plan? "Well DUH, I know am getting a minimum distribution from the plan" or "Oooh, I might have $ in that plan I don't know about"

correct. and it looks like next year the catch up limit goes up $500. If they pass the Secure Act then age 60 and up would have a larger catch up as well.

you indicated you were an HCE. 'have you ever had a corrective distribution due to a failed ADP test?' e.g. if you received $1000 in corrective distribution, then that implies you have already used up the catch up, as catch ups are one way of leaving $ in the plan for a failed test.

the DOL cite clearly says even if the employee has 1000 hours he could be excluded from sharing in the allocation. I think the inference is if active and 1000 hours then you have to include (otherwise I guess if you only worked 1200 each year you should always quit, be eligible and the come back to work!)

even in a short plan year you are still required to look at a 12 month period. so just because he wasn't age 18 I don't see any difference. by the way, if the person in question was age 25 and didn't enter until 7/1 due to entry dates, would you also say 'he wasn't eligible so I can exclude hours prior to the entry date"? Labor Reg. § 2530.203-2(a) and (c) a)Designation of vesting computation periods. Except as provided in paragraph (b) of this section, a plan may designate any 12-consecutive-month period as the vesting computation period. The period so designated must apply equally to all participants. This requirement may be satisfied even though the actual 12-consecutive-month periods are not the same for all employees (e.g., if the designated vesting computation period is the 12-consecutive-month period beginning on an employee's employment commencement date and anniversaries of that date). The plan is prohibited, however, from using any period that would result in artificial postponement of vesting credit, such as a period measured by anniversaries of the date four months following the employment commencement date. c) (1) A plan may be amended to change the vesting computation period to a different 12-consecutive-month period provided that as a result of such change no employee's vested percentage of the accrued benefit derived from employer contributions is less on any date after such change than such vested percentage would be in the absence of such change. A plan amendment changing the vesting computation period shall be deemed to comply with the requirements of this subparagraph if the first vesting computation period established under such amendment begins before the last day of the preceding vesting computation period and an employee who is credited with 1,000 hours of service in both the vesting computation period under the plan before the amendment and the first vesting computation period under the plan as amended is credited with 2 years of service for those vesting computation periods. For example, a plan which has been using a calendar year vesting computation period is amended to provide for a July 1-June 30 vesting computation period starting in 1977. Employees who complete more than 1,000 hours of service in both of the 12-month periods extending from January 1, 1977 to December 31, 1977 and from July 1, 1977 to June 30, 1978 are advanced two years on the plan's vesting schedule. The plan is deemed to meet the requirements of this subparagraph.

for a moment, pretend the DB plan is the only plan. you would calculate everyone at 62 unless they were past NRA and calculate at that age. then you adjust to 65 at least that is my understanding.