Tom Poje

and my understanding when looking at the DB portion you use the DB assumptions to age 62, because that is the normal retirement in the DB plan. now you convert what was at age 62 to age 65 using the DC testing assumptions

the only possible exception would be if key's were not allowed to 'defer' except for $6000 in catch up. obviously not in this case based on your description, but there is that possibility

probably best to make sure the NHCE have signed election forms indicating 0% otherwise down the road someone may claim "no one ever told me about this"

and as a reminder, suppose the first RMD is 10,000 and the second one is 12,000 so the difference is in taxes. do you want 10,000 in one year and 12,000 the next or 22,000 in one year. (but then if no longer working that might be the way to go)

more useless facts - Tripped across the following, I guess in the eyes of the govt at soc sec, you could be working but are considered retired In 2019, a person younger than full retirement age for the entire year is considered retired if monthly earnings are $1,470 or less. For example, John Smith retires at age 62 on October 30, 2019. He will earn $45,000 through October. He takes a part-time job beginning in November earning $500 per month. Although his earnings for the year substantially exceed the 2019 annual limit ($17,640), he will receive a Social Security payment for November and December. This is because his earnings in those months are $1,470 or less, the monthly limit for people younger than full retirement age. If Mr. Smith earns more than $1,470 in either November or December, he won’t receive a benefit for that month. Beginning in 2020, only the annual limit will apply to him. https://www.ssa.gov/pubs/EN-05-10069.pdf

using just today's CPI factor (256.092), I have the following catch up catch up unrounded Deferral Limit def limit unrounded Comp Limit Comp Limit (unrounded) 2019 $ 6,000 6405.50 $19,000 $19,217 $280,000 $283,740 2020 $ 6,500 6504.00 $19,500 $19,512 $285,000 $288,120 (far column hce limit unrounded 130,192) DC $ Limit DC$ Limit (Unrounded) DB $ Limit DB $ Limit (unrounded) Key Employee Key EE (unrounded) HCE Limit HCE Limit (unrounded) $56,000 $56,748 $225,000 $226,992 $180,000 $184,431 125000 $ 128,208 $57,000 $57,624 $230,000 $230,496 $185,000 $187,278 130000 $ 130,192

even if the entire balance was rolled out, an ADP or ACP refund is due and the receiving account needs to be fixed (whether it takes place is a different story) I think the one exception is if the plan is terminated and all balances have been paid out. It could well be it is a moot point if an entire distribution was made. but, let's suppose the ee is less than age 59 1/2. (and non rollover) then the distribution is subject to 10% early withdrawal. but the ACP refund isn't. so it would make a difference having 2 1099Rs. I'm not 100% sure it matters if the investment house cuts one or 2 checks, though it certainly is cleaner if 2 were cut.

since you indicated it was a non-rollover I think all that happens is you issue 2 1099-Rs one indicating ACP refund, the other indicating distribution

they show up in the ACP test. assuming everyone can make after tax contributions then if plan has last day provision for match (or hours requirement) some people who normally would not show on the ACP test are now included as well with 0%.

https://www.groom.com/resources/house-passes-bipartisan-retirement-reform-legislation/ this was on the benefits link newsletter this morning ............. I was curious on min distributions. on Relius I have my own report. I can modify it so changed to age 72 and min acct balance of 50000. original data pull - produced reports for 117 plans. this includes possible distributions (e.g. actives who would need if they quit before the end of the year. age 72 - pulled 9 less plans. oooh boy major change NOT min acct balance - only pulled 19 plans. now that would be a significant change.

I see according to one article (from Groom Law Firm)nothing may happen on this, which is the opposite of what I originally heard that there was wide support in the Senate for this. Senate leadership is now considering whether and how to move the SECURE Act. At this point, it does not appear that Majority Leader McConnell (R-KY) will bring the bill up for a full floor consideration this year, so Senate leadership is attempting to move the bill via unanimous consent, which is only possible if no Senator objects. Currently, there appears to be at least one objection. Another possible option is to attach the SECURE Act to a larger, must-pass bill, such as a spending bill later this year.

vesting must be a 12 month period see Labor Reg 2530.203.2 (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. (b)Plans with 3-year 100 percent vesting. For rules regarding when a participant has a nonforfeitable right to his accrued benefit, see section 202(a)(1)(B)(i) of the Act and section 410(a)(1)(B)(i) of the Code and regulations issued thereunder. (c)Amendments to change the vesting computation period. (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.

RBG I think it's one of the differences between the House version and the Senate version https://www.portman.senate.gov/sites/default/files/2019-05/Retirement%20Security%20%26%20Savings%20Act%20-%202019%20final_0.pdf Cardin and Portman’s Retirement Security and Savings Act of 2019 (link posted above) overlaps with some provisions in the Retirement Enhancement and Savings Act (RESA) of 2019, which was introduced on April 1, but RESA only raised the RMD age to 72. The RESA bill, introduced by Senate Finance Committee Chairman Chuck Grassley, R-Iowa, and ranking member Ron Wyden, D-Ore., is similar to H.R. 1994, the Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019, which is expected to get a vote on the House floor before Memorial Day weekend.

supposedly this is to be voted on this week. some of the provisions in the modified Bill are Min Distributions increases to 72 in 2023 and age 75 in 2029 ‘‘(I) for calendar years before 2023, age 701⁄2, ‘‘(II) for calendar years 2023, 2024, 2025, 2026, 2027, 2028, and 2029, age 72, and ‘‘(III) for calendar years after 2029, age 75. I guess this overrides the DOL by saying if you self correct too bad DOL (b) LOAN ERROR.—The Secretary of Labor shall treat any loan error corrected pursuant to subsection (a) as meeting the requirements of the Voluntary Fiduciary Correction Program of the Department of Labor. You can be late by 6 months for min distributions (d) REQUIRED MINIMUM DISTRIBUTION CORRECTIONS.—The Secretary shall expand the Employee Plans Compliance Resolution System to allow plans to which such system applies and custodians and owners of individual retirement plans to self-correct, without an excise tax, any inadvertent failures pursuant to which a distribution is made no more than 180 days after it was required to be made. catch up may start at age 50 but if you are 60 you get even more SEC. 121. HIGHER CATCH-UP LIMIT TO APPLY AT AGE 60. (a) IN GENERAL.— (1) PLANS OTHER THAN SIMPLE PLANS.—Section 414(v)(2)(B)(i) is amended by inserting the following before the period: ‘‘($10,000, in the case of an eligible participant who has attained age 60 before the close of the taxable year)’’. don't have to keep giving notices to people who aren't deferring, etc ‘‘SEC. 111. ELIMINATING UNNECESSARY PLAN REQUIREMENTS RELATED TO UNENROLLED PARTICIPANTS. IN GENERAL.—Notwithstanding any other provision of this title, with respect to any individual account plan, no disclosure, notice, or other plan document (other than the notices and documents described in paragraphs (1) and (2)) shall be required to be furnished under this title to any unenrolled participant if the unenrolled participant receives you may have to let long time part timers into the plan to defer but no top heavy, etc. ‘‘(i) NONDISCRIMINATION RULES.—In the case of employees who are eligible to participate in the arrangement solely by reason of paragraph (2)(D)(ii)—‘‘(I) notwithstanding subsection (a)(4), an employer shall not be required to make nonelective or matching contributions on behalf of such employees even if such contributions are made on behalf of other employees eligible to participate in the arrangement, and‘‘(II) an employer may elect to exclude such employees from the ap1 plication of paragraphs (3), (11),(12), (13), and (15), subsection (a)(4), paragraphs (2), (10), (11), (12), and (13) of subsection (m), and section 410(b). ‘(ii) TOP-HEAVY RULES.—An employer may elect to exclude all employees who are eligible to participate in a plan maintained by the employer solely by reason of paragraph (2)(D)(ii) from the application of the vesting and benefit requirements under subsections (b) and (c) of section 416. ............. I didn't see anything in the Bill that eliminates 3% safe harbor notice or allows you to add safe harbor after the fact, but maybe that is buried elsewhere.

if plan shifted from anniversary date to plan year, AND item iv was checked (we never choose this one), then if person completed 1000 hours in first 6 months of 2019 they would enter 7/1/2019, as opposed to completing 'one year of service', which is generally defined as a 12 month period. Minimum service requirement for Elective Deferrals/Voluntary Contributions: i. [ ] None ii. [ ] Completion of one Year of Eligibility Service - Hours of Service necessary for a Year of Eligibility Service: (not to exceed 1,000) iii. [ ] Completion of one Year of Eligibility Service - elapsed time iv. [ ] Completion of Hours of Service (not to exceed 1,000) within a twelve month period. The service requirement shall be deemed met at the time the specified number of Hours of Service are completed v. [ ] Completion of 6 months of service - elapsed time (not to exceed 12) vi. [ ] Completion of Hours of Service (not to exceed 1,000) in a month period (not to exceed 12 - hours of service failsafe applies) vii. [ ] Completion of consecutive months of continuous service (not to exceed 12 - hours of service failsafe applies) viii. [ ] Other: (hours of service failsafe applies if elapsed time is not specified)

one such IRS comment came from 2001 Q and A (it was Q and A #3, not #1but when I copied and pasted that is what showed )American Bar Association §401(a) – Definite Allocation Requirement Would a profit sharing plan be qualified if it were drafted to provide that, each year, the employer's contribution will be declared by written instrument which provides a distinct contribution (dollar amount or percentage of pay) to be allocated to each participant separately? For example, if a plan had 42 participants, the employer's declaration would have to establish 42 separate contribution amounts (or rates), with each one expressly declared to be allocable to a particular participant. For purposes of this question, please assume that: The plan has routine eligibility requirements (e.g., one year of service and age 21), and that even if the plan had excluded classifications and/or conditions for eligibility to accrue a contribution (e.g., a last day of year employment requirement) that the plan would satisfy coverage requirements under §410(b); The plan would provide that forfeitures will be allocated in proportion to the individual allocations for that year, and; The allocations would be subject to the condition precedent that they must satisfy the coverage and non-discrimination requirements. Given that the IRS has relaxed its position on definite determinability in the declaration of contributions/allocations it seems both reasonable and feasible to operate a plan on this basis. Little could be clearer than to expressly state the amount to be allocated to each participant individually. For example, there would be no question as to whether a participant is in one division or another, because each individual is separately identified, regardless of his or her job classification changes throughout the year. Unlike the average benefit percentage test for coverage, the non-discrimination regulations do not contain a "reasonable classification" requirement that would prohibit the identification of individual participants, by name, as separate contribution groups. Proposed Response: It seems conceivable that, if the employer could declare a 0% contribution for any participant, the plan could run afoul of the minimum coverage requirements, because a 0% allocation could have the effect of excluding individuals by name. Therefore, in the case of a plan that would make 0% allocations (and which is not permissibly aggregated with another plan that provides some level of benefit for the participant receiving nothing under the profit sharing plan) the plan would have to satisfy the ratio percentage test in order to satisfy minimum coverage. However, nothing else would seem to limit this approach to plan design. IRS Response: The IRS agrees with the proposed response. The proposed regs from 2016 had the following comment (would have required not just coverage but nondiscrimination as well to follow the reasonable classification rule) IV. Benefit Formulas for Individual Employees or Groups Without a Reasonable Business Purpose; Modifications to the Amounts Testing Rules Under § 1.401(a)(4)-2 and § 1.401(a)(4)-3 The proposed regulations also include changes to address certain arrangements that take advantage of the flexibility in the existing nondiscrimination rules  [7] to provide a special benefit formula for selected employees without extending that formula to a classification of employees that is reasonable and is established under objective business criteria. A plan satisfies the minimum coverage requirements of section 410(b) if the plan's ratio percentage is 70% or higher or the plan satisfies the average benefit test. To satisfy the average benefit test, pursuant to § 1.410(b)-4, the group of employees must be determined using a classification that is reasonable and that is established under objective business criteria pursuant to § 1.410(b)-4(b) and must have a ratio percentage that is described in § 1.410(b)-4(c) (which includes safe harbor and unsafe harbor percentages). A classification of employees that is reasonable and is established under objective business criteria is referred to in this preamble as a “reasonable business classification.” To the extent that a plan provides a special benefit formula and can still pass the nondiscrimination requirements, the plan sponsor can use a qualified retirement plan to provide benefits that would otherwise be provided under a nonqualified plan. These arrangements are sometimes referred to as qualified supplemental executive retirement plans (or QSERPs). Under the general test in the existing regulations, if a plan satisfies the minimum coverage requirements of section 410(b) using the average benefit percentage test, then the rate group for each highly compensated employee is treated as satisfying the minimum coverage requirements if the ratio percentage for the rate group is equal to the midpoint between the safe harbor and the unsafe harbor percentages (or the ratio percentage for the plan as a whole, if less). This rule recognizes that the composition of a rate group may be unpredictable and so the rate group should not be subject to a reasonable business classification standard. However, that same consideration is not relevant if the group of employees to whom the allocation formula under a defined contribution plan (or benefit formula under a defined benefit plan) applies is not a reasonable business classification. Accordingly, the proposed regulations limit the existing rule under which a rate group with respect to a highly compensated employee is treated as satisfying the average benefit percentage test to those situations in which the allocation formula (or benefit formula) that applies to the highly compensated employee also applies to a reasonable business classification. For example, if a benefit formula applies solely to a highly compensated employee who is identified by name, it does not apply to a reasonable business classification. See § 1.410(b)-4(b). In such a case, the proposed regulations would require that the rate group with respect to that individual satisfy the ratio percentage test.

since the person did not have a break in service it is almost as if he never quit. so enters 1/1/2010 as far as I can tell some basic documents describe it better than others, but the rules are the same (a) Rehired Participant/immediate re-entry. If any Former Employee who had been a Participant is reemployed by the Employer, then the Employee shall become a Participant as of the reemployment date, unless the Employee is not an Eligible Employee or the Employee's prior service is disregarded pursuant to Section 3.5(d) below. If such prior service is disregarded, then the rehired Eligible Employee shall be treated as a new hire. (b) Rehired Eligible Employee who satisfied eligibility. If any Eligible Employee had satisfied the Plan's eligibility requirements but, due to a severance of employment, did not become a Participant, then such Eligible Employee shall become a Participant as of the later of (1) the entry date on which he or she would have entered the Plan had there been no severance of employment, or (2) the date of his or her re-employment. Notwithstanding the preceding, if the rehired Eligible Employee's prior service is disregarded pursuant to Section 3.5(d) below, then the rehired Eligible Employee shall be treated as a new hire. (c) Rehired Eligible Employee who had not satisfied eligibility. If any Eligible Employee who had not satisfied the Plan's eligibility requirements is rehired after severance from employment, then such Eligible Employee shall become a Participant in the Plan in accordance with the eligibility requirements set forth in the Adoption Agreement and the Plan. However, in applying any shift in an eligibility computation period, the Eligible Employee is not treated as a new hire unless prior service is disregarded in accordance with Section 3.5(d) below. (d) Reemployed after 1-Year Break in Service ("rule of parity" provisions). If any Employee is reemployed after a 1-Year Break in Service has occurred, Years of Service (or Periods of Service if the Elapsed Time method is being used) shall include Years of Service (or Periods of Service if the Elapsed Time method is being used) prior to the 1-Year Break in Service subject to the rules set forth below. The Employer may elect in Appendix A to the Adoption Agreement (Other Permitted Elections) to make the provisions of this paragraph inapplicable for purposes of eligibility and/or vesting. (1) In the case of a Participant who under the Plan does not have a nonforfeitable right to any interest in the Plan resulting from Employer contributions, Years of Service (or Periods of Service) before a period of 1-Year Breaks in Service will not be taken into account if the number of consecutive 1-Year Breaks in Service equals or exceeds the greater of (A) five (5) or (B) the aggregate number of pre-break Years of Service (or Periods of Service). Such aggregate number of Years of Service (or Periods of Service) will not include any Years of Service (or Periods of Service) disregarded under the preceding sentence by reason of prior 1-Year Breaks in Service; (2) A Participant who has not had Years of Service (or Periods of Service) before a 1-Year Break in Service disregarded pursuant to (1) above, shall participate in the Plan as of the date of reemployment, or if later, as of the date the Former Employee would otherwise enter the Plan pursuant to Sections 3.1 and 3.2 taking into account all service not disregarded. Reemployment of an Employee Before a Break In Service and Before Eligibility Requirements Are Satisfied. For any Plan Year in which the eligibility requirements under Section 2.1 are based on Years of Service, if an Employee Terminates Employment with the Employer prior to satisfying the eligibility requirements in Section 2.1 and the Employee is subsequently reemployed by the Employer before incurring a Break in Service, then (1) the Employee's pre-termination Year(s) of Service (and Hours of Service during any computation period) will be counted in determining the satisfaction of such eligibility requirements, and for all other purposes, as applicable, and (2) the Eligibility Computation Period, Vesting Computation Period, and/or benefit accrual computation period, as applicable, will remain unchanged. Reemployment of an Employee Before a Break In Service and After Eligibility Requirements Are Satisfied. For any Plan Year in which the eligibility requirements under Section 2.1 are based on Years of Service, if an Employee Terminates Employment prior to the Employee's Entry Date in Section 2.1, the Employee had satisfied the eligibility requirements in Section 2.1 as of the Employee's Termination of Employment, and the Employee is subsequently reemployed by the Employer before incurring a Break in Service, then (1) the Employee will become a Participant as of the later of (A) the date that the Employee would enter the Plan had he or she not Terminated Employment with the Employer, or (B) the Employee's Reemployment Commencement Date, (2) the Employee's pre-termination Year(s) of Service (and Hours of Service during any computation period) will be counted for all purposes, and (3) the Vesting Computation Period and/or benefit accrual computation period, as applicable, will remain unchanged. Reemployment of a Participant Before a Break In Service. For any Plan Year in which the eligibility requirements under Section 2.1 are based on Years of Service, if an Employee Terminates Employment after becoming a Participant and is subsequently reemployed by the Employer before incurring a Break in Service, then (1) the reemployed Employee will reenter the Plan as of the Employee's Reemployment Commencement Date, (2) the Employee's pre-termination Year(s) of Service (and Hours of Service during any computation period) will be counted for all purposes, as applicable, and (3) the Vesting Computation Period and/or benefit accrual computation period, as applicable, will remain unchanged. Reemployment of an Employee After a Break In Service and Before the Entry Date. For any Plan Year in which the eligibility requirements in Section 2.1 are based on Years of Service, if an Employee Terminates Employment with the Employer either prior to or after satisfying the eligibility requirements in Section 2.1 (but before the Employee's Entry Date in Section 2.1) and the Employee is subsequently reemployed by the Employer after incurring a Break in Service, then the Employee's Years of Service that were completed prior to the Break in Service will be recognized. Reemployment of a Participant After a Break In Service. For any Plan Year in which the eligibility requirements under Section 2.1 are based on Years of Service, if an Employee (1) was a Participant in the Plan, (2) Terminates Employment with the Employer, and (3) is subsequently reemployed by the Employer after incurring a Break in Service, then the Employee's Year(s) of Service that were completed prior to the Break in Service will be recognized. Ignoring Service for Eligibility If Service Requirement for Eligibility Is More Than 1 Year of Service. Notwithstanding anything in the Plan to the contrary, if this Plan (or a component of the Plan) provides at any time that an Employee must complete more than one (1) Year of Service for eligibility purposes, and such Employee will have a 100% Vested Interest in the Participant's Account (or the sub-Account that relates to such component) upon becoming a Participant in the Plan, then with respect to an Employee who incurs a Break in Service before satisfying such eligibility requirement (1) the Employee's Year(s) of Service (and Hours of Service) that were completed prior to the Employee's Break(s) in Service will not be counted for eligibility purposes, and (2) the Employee's Eligibility Computation Period will commence on the Employee's Reemployment Commencement Date and subsequent Eligibility Computation Periods will be based upon the provisions of the definition of Eligibility Computation Period (with the Reemployment Commencement Date substituted for the Employment Commencement Date, if applicable).

thanks for the compliments, I am a bit humbled by the compliments, Amy Cavanaugh wrote the first edition to the book, and shortly thereafter had me helping on the book for several editions. after she 'retired' from the book Frank and Bernadine joined in, though we each primarily handle certain chapters. Yes, I do the cross testing portions. wonder how you could tell. ha. My hope has always been not just providing the yes or no answer but when possible the 'why'. but even my time is drawing rapidly to a close. I've resigned from the book early this year. mom is 94 and I'd rather spend the time at home taking care of her. Need to tie a few more things up at work on some plans and then be out the door.

one of the distribution rules that apply to 401(k) plans is no distributions before age 59 1/2. (hardship is an exception) therefore, you can't cheat by terminating a 401(k) plan, and say "I can distribute because the plan is terminated" and take a distribution and then start a new plan (there are a few exceptions) within a year. in this case, a ps was terminated. there is no such 'no distribution before 59 1/2 rule', so there is no successor plan rule that applies because you aren't trying to get around the distribution rule. see also http://www.julyservices.com/documents/Newsletter/TexP_2004Issue4_v3.pdf

I would assume a key ee participates in both plans so they must be aggregated for testing. Let's suppose the plans are top heavy when combined. Fred receives 3% from one of the plans. Has he received the required top heavy minimum? I would say yes. so even if both plans have top heavy language I think it becomes a moot point. If Fred didn't receive 3% from either plan then he would need 3%, but again, if both plans provided then he would have gotten 6% which is more than the top heavy minimum, so deciding which plan provides the top heavy is an issue, but I don't think providing both is an issue.. While it is not the case in this situation, if it was a DB/DC combo then I think you have real issues since a DB minimum is different than a DC minimum. In addition you could have an ee who works 1000 hours and quits, so is eligible for top heavy from the DB but not the DC, and you would have real problems if the top heavy is DC only. or the ee is active but less than 1000 hours so is DC top heavy eligible but not DB top heavy. so you really need specific language in those cases.

As I recall, a plan has to pass testing with and without the QNEC. I guess you can't cheat on the original allocation. normally HCEs don't receive QNECs so passing with a QNEC is less of a problem. A gateway is required only if you cross test the allocation. (I don't think simply running the avg ben pct test triggers a gateway) but if you can pass testing on an allocation basis then no gateway

Debbie, I believe it is in the terminology used. There are valid exclusion categories - the most common being union employees and nonresident aliens. part time or seasonal is a not a 'valid' category, but I have seen documents that use the term to exclude bodies not expected to work 1000 hours, but my understanding is if they ever work 1000 hours, then they are in and can't be excluded even if their hours drop below 1000 hours. so you could have a plan with 3 months eligibility, but it excludes 'seasonal' folks - folks never expected to work 1000 hours in a year, but once they do, they are in. I believe the following is language from a Corbel document.

neither plan is in violation, so no correction required. and after April 15 you normally can't distribute because there is no 'distributable' event in regards to the plan the person files his taxes and the W-2 indicates he has an excess, so he will be taxed on that amount. When he takes the $ out at tax time he will be taxed again. if it is Roth $ you have to segregated the amount because he needs to be taxed on the earning on the excess as well, otherwise you could intentionally make an excess and earn tax free interest I think the whole amount is included in testing because there is no violation of 401(a)(30) by the plan, but I could be wrong.

while not quite the same (this is somewhat a reverse of the question), here is an IRS response from a Q and A years ago. (of course such response don't necessarily reflect an actual Treasury position) Margaret became a participant in a 401(k) plan in the 2010 plan year, which ends December 31, 2010. For 2010, Margaret did not satisfy any of the key employee tests. The plan is top heavy for 2011 because the top heavy ratio exceeds 60%. The top heavy ratio is computed as of 12/31/2010, which is the determination date for the 2011 plan year. For that calculation, Margaret's account balance as of 12/31/2010 is treated as a non-key employee account balance. During the 2011 plan year, Margaret marries the majority owner of the company. This makes her a more-than-5% owner of the company by attribution. Does Margaret receive a top heavy minimum contribution for the 2011 plan year? Should she have received a top heavy contribution for the 2010 plan year even though the employer didn't fund the contribution until 2011 after Margaret already had married the owner? IRS response. There is no guidance directly on point, but the most reasonable interpretation is that Margaret receives a top-heavy minimum contribution for 2011. For top-heavy purposes, a single determination date is prescribed by IRC § 416(g)(4) for determining both whether the plan is top-heavy and whether an employee is a key or non-key employee. While it would be intuitive to adjust this determination based on events occurring within the year after the determination date, this interpolates a condition that is not in the statute. Note that the House Report (H.R. Rep. No. 107-51) and Conference Committee Report (H.R. Conf. Rep. No. 107-84) accompanying EGTRRA § 613 both provide that the determination date is used for identifying who is a key employee in the following year. 2011 ASPPA Conference #47

even if the thing doesn't pass at least give them credit for the acronym that deserves to be in the hunor section on this board https://waysandmeans.house.gov/sites/democrats.waysandmeans.house.gov/files/documents/SECURE%20Act%20section%20by%20section_0.pdf THE SETTING EVERY COMMUNITY UP FOR RETIREMENT ENHANCEMENT ACT OF 2019 (THE SECURE ACT) Section 102. Simplification of Safe Harbor 401(k) Rules The legislation changes the nonelective contribution 401(k) safe harbor to provide greater flexibility, improve employee protection and facilitate plan adoption. The legislation eliminates the safe harbor notice requirement, but maintains the requirement to allow employees to make or change an election at least once per year. The bill also permits amendments to nonelective status at any time before the 30th day before the close of the plan year. Amendments after that time would be allowed if the amendment provides (1) a nonelective contribution of at least four percent of compensation (rather than at least three percent) for all eligible employees for that plan year, and (2) the plan is amended no later than the last day for distributing excess contributions for the plan year, that is, by the close of following plan year.