Tom Poje

which almost becomes the same issue as forfeitures being used as safe harbors, etc. the govt initially insisted they had to be designated as 100% when "made", and they only recently switched that to 'when allocated' so, based on your document, yes you can have QMACs. now, whether you can, for lack of a better term, wave a magic wand and turn the match into a QMAC at this point is unclear to me. e.g. if we are talking about a 2018 match can one turn that into a QMAC at this point in time. I have no idea.

that seems to say they may do either of course the fun starts if the investment house has match subject to vesting acct and a QMAC account, but during the year the match was going into the subject to vesting account and now they desire it to be a QMAC, which is fine based on your document as far as I can tell, but how do you unwind?

you did not indicate if 'each person is in their own group' if the answer is 'yes' then for 401(a)(4) coverage (not discrimination testing' you can ignore the terminee <500 hours. so you have 3 NHCEs. if only 2 benefit your coverage is 67% and that fails since each person is in their own group and you can't use avg ben test to prove you pass. so in that case, yes, you have to add 2 NHCEs.

sorry, I missed that with my blinders on. I am not 100% sure. The FT William document has the following language: Qualified Matching Contributions. In addition to any Qualified Matching Contributions provided in the Adoption Agreement, the Company in its discretion may make Matching Contributions designated as Qualified Matching Contributions for the benefit of such Participants and in such manner determined at the discretion of the Company. ............. without knowing the language in your document I can't say. I'd lean toward saying 'no' because this language is quite specific "in addition to any QMAC provided" rather than "any match, which by the way happens to have distribution restrictions and is 100% vested". but because that is what you described it almost sounds like it is intended as a QMAC in the first place.

my understanding is NO. One of the requirements of a QMAC is it is subject to the same distributions rules as deferrals and therefore can be used in the ADP test, where a 100% vested match is simply like any other match, except it is 100% vested at the start but would not be used in the ADP test, so no deferral distribution type rules apply.

1.401(a)(4)-8 is are requirements for cross testing (sing plan) 1.401(a)(4)-9 are the rules for plan aggregation so 1.401(a)(4)-9(b)(2)(v)(D)(1) Minimum aggregate gateway A DB/DC satisfies...if each NHCE has an aggregate... so yes (example 1 is a combo plan, but a DB for HCEs only. because the plan does not satisfy 410b alone the aggregated plans must satisfy the aggregate allocation gateway you are allowed to use the average rate of the NHCEs in the DB plan to determine how much the cash balance credit is worth in terms of allocation rate in the DC plan 1.401(a)(4)-9(b)(2)(v)(D)(3)applicable only to those NHCE benefitting in the DB plan if the cash balance is 2.5% that does not = 2.5% profit sharing allocation

is that like powdered water? I tried the powdered milk and that worked fine after adding water Then I tried your the powdered potatoes and that worked fine after adding water. I'm hesitant on ordering your baby powder....

the last time I bought a widget from you also charged me for taxes. the widget was broken and I returned it and you refunded everything but the taxes I paid claiming it was non-refundable. so I ordered a replacement and you charged me taxes again, thus I really did end up with being taxed twice. I'm leaving you 'alone' before I would order again from you.

I would check census and verify if they are showing with a year of service or if somewhere it is 'buried' to override something and include them. gremlins have been known to do things like that

in regards to whether a plan could use statutory exclusion dates, the IRS did issue a memorandum a few years saying "yes, no matter what your plan entry dates are, you could use the maximum. see enclosed. (e.g. 1st day of year or 6 months after completing 1 year) I was curious to see what was in the big book, so..... in the ERISA Outline Book Chapter 8 Section VIII Part B 2f would granting of service with a prior employer preclude treatment as otherwise excludable? if prior service 'must' be credited under the predecessor employer rule of IRC 414(a)(1), then YES because the successor employer is really a continuation of the predecessor employer. if prior service is granted 'optionally' (under 414(a)(2) then probably YES, but if they wanted to use otherwise excludable it would be a better approach not to provide prior service and simply allow the plan to have a shorter eligibility period for these employees. But the IRS has never indicated on way or another. but the 'optional' position gets back to my point, the plan could have done things another way and therefore as such the people wouldn't have entered and so that is how I end up 'since they could have been excluded they are otherwise excludable' but I can accept someone taking either position. But my copy is 2012, so maybe the write up has been changed OE memorandum.pdf

my understanding of the 'otherwise excludable' rule was: did the plan bring people into the plan earlier than they needed to, and if so those 'otherwise' those folks would have been 'excluded'

I think this sums it up well. I like the missing dollar puzzle the person throws in, but also the fact if I borrow the 10,000 from the bank I am not taxed twice. since I was never taxed on the amount from the 401k it is the same thing. Now if you want to argue the world is flat, well..... https://thefinancebuff.com/401k-loan-double-taxation-myth.html 401k Loan Double Taxation Myth I don’t know who started it. Suze Orman certainly helped spread it. She says that you shouldn’t borrow from your 401k (or 403b) plan because you will be double-taxed. I did a Google search and I found 5 priceless money-saving tips by Suze Orman: “Also, never ever borrow against your 401k plan because you will pay double taxation on the money you borrow. Because you don’t pay taxes on the money you put into a 401k, when you pay back the loan (which you must do within five years, or 15 years if used to buy a home), you pay it back with money you have paid taxes on. Then, when you retire and take the money out again, you end up paying taxes on it a second time.” This allegation is all over the place. It is a myth because there is NO double taxation. It’s a mind trick similar to that well-known “where’s the missing dollar” puzzle. “Three men went into a hotel. The manager said the room was $30 so each man paid $10. A while later the manager realized the room was only $25 so he sent the bellboy to the 3 guys’ room with $5. The bellboy only gave each man $1 back and kept the other $2 for himself. Now 3 men paid $9 each for the room, which is $27. Add the $2 that the bellboy kept, and that’s $29. But the 3 men paid $30 originally. Where is the other dollar?” I was able to find a good explanation for this puzzle. The $30 number is irrelevant. The correct math is $27 – $2 = $25. It makes no sense to add $2 to the $27 because it’s already a part of the $27. The $2 should be subtracted from the $27. Now, back to our 401k double taxation myth. The fact that the loan has to be repaid with after-tax dollars is irrelevant, just like the $30 number in the hotel puzzle. If you didn’t borrow from the 401k plan but you borrowed from a bank, you’d have to pay the bank back with after-tax dollars as well. If you didn’t borrow from your 401k plan but you dipped into your own savings, you have to replace those savings with after-tax dollars too. What it really means is that a 401k loan is not tax deductible, just like any other consumer loan except a mortgage or a HELOC. Instead of saying you will be double taxed, they should just say that a 401k loan is not tax deductible, plain and simple.

your cape must have flown in front of your eyes. He said the plan terminated in 2018, but you make a good point for on-going plans

if the NHCEs quit with less than 500 hours then they could be excluded, but otherwise I don't see an out

because you have a young HCE receiving the minimal and the plan won't pass if tested all together?

I'm unclear on your statement "for the component plan only" since you should have 2 component plans (I guess you could have more but I have never seen anyone split into more than 2) so step 1, run an avg ben pct test on all ees to determine if that test passes, since there is one test and it applies to both component plans now, at least how I have been running component plans, I process the people in 'component plan 1' (only include those people, but I also plug in numbers under 'non benefiting non excludable' employees from component plan 2 because that treats them as 0 on the test. I run this on an allocation basis, and code 'pass/fail avg ben pct test then I do the same for the component plan on an accrual basis (changing my nonexcludable non benefitting employees)

well, under 401(a)(4) you can pass nondiscrim by either ratio % test or avg ben test component plan info is under 1.401(a)(4)-9(c) 1.401(a)(4)-9(c)(1) ...if each of the component plans of a plan satisfies all of the requirements of section 401(a)(4) and 410(b) as if it were a separate plan 1.401(a)(4)-9(c)(3)(ii) adds (paraphrased) "YOU CAN"T RESTRUCTURE TO AVOID THE GATEWAY MIN BY TESTING ON GROUP ON AN ALLOCATION BASIS" 1.401(a)(4)-9(c)(4)(I) is the spot the regs say there is one and only one avg ben pct test amongst the component plan (but you still could have 2 if you are testing otherwise excludables separately) 1.401(a)(4)-9(4)(ii) adds, (basically) even though you are splitting things into component plans you can't use this for purposes of satisfying 410(b) itself

that is an incomplete question. I assume you mean your plan has each person in their own group. Therefore, for coverage you have, in effect, people classified by name, and therefore, yes you have to pass ratio percentage test - but that is for coverage only. for nondiscrim testing, whether by allocation basis or accrual basis no such rule exists. It was proposed a few years ago, but never passed. Usually the otherwise excludable group has no HCEs so that is not a problem anyway, but I guess if you have some HCEs and you have more than 30% of the otherwise excludable NHCEs somehow not eligible for safe harbor you could fail, or as Gandalf would say "You shall not pass"

that sounds ok

recall, if you are splitting the testing you sort of have 2 plans if you are 'cross' testing you have to provide the gateway now, if you test the otherwise excludables on an allocation basis then you would not need the gateway - it is its own 'plan'

my thoughts are a wish Clemson will win even if I am in the minority....oh, by 'any thoughts' you don't really mean 'any' yes, there was a failure to limit compensation and need to forfeit the overage

we had one union plan (thank heavens no more) that had a limited modified cliff vesting, but that is as close to cliff vesting as I have seen. of course the software couldn't handle it...

if it was just forfeiture data by participant, you can pull that with a DER - but not the normal place, but under Transactions. few people I have talked to even know that feature exists. File Import/Export

never tried anything like that. (nor even had a request) sorry.

I didn't think you could change retirement age - you told someone he had full retirement at 55 not sure how you can take that away, even if you say "well, early retirement is the same thing" lets suppose only new entrants have retirement age = 65. since you would have non-uniform retirement age then the testing age would be the latest age which would be 65. not sure if there is a BRF issue if you did that. off the top of my head, without looking it up, disparity age 65 generally adds 0.65 and at age 55 only adds 0.55, but that does depend on one's actual soc ret age. .......... years ago one of lawyers from Corbel indicated the issue with testing on soc sec ret age (even if your document permitted it) is a BRF issue, and would generally fail if you have an HCE with soc sec ret age of 65 as you probably wouldn't have any NHCEs at that age.