RatherBeGolfing

There are no special rules for a solo 401(k), it is just a marketing term for a one participant plan. The reporting is a little different but the "rules" are the same. With this kind of setup, I would assume that ADP testing would be an issue as well, not just possible TH issues? Is the owner/principal catch-up eligible?

Your document most likely covers it (either by telling you how you must do it or by giving the admin discretion), but it may not be where you think it should be. In my document, the ordering rule is not in the RMD section, it is in a section that deals with timing and form of distributions.

Since the participants have an option of an SDBA or a pooled managed account, could the pooled account option itself be considered a DIA? I would be tempted to play it safe and treat it like a DIA and issue quarterly statements to the participants in the pooled account. The value wouldn't change until after the annual valuation of the pooled assets, so it would be pretty simple to take care of.

EZ is for owner/spouse or partners only. Is the son a partner? If the son is not a partner, the plan cannot file an EZ or use the filing exemption.

I don't see any other way around it, especially with the DOL scrutinizing attempts (or lack thereof) to locate missing participants.

We did a normal conversion, which means we converted the data needed (2014 in our case) in order to do complete admin in in our first post conversion year (2015). For us, this meant converting balances, years of service, hire/fire/rehire dates, relevant data for any lookback periods, etc. We also have detailed electronic files on our clients (present and past) that can be used if we need to access historical data that is not in FTW. With plans going back several decades, it just isn't reasonable to "rebuild" past years in a software when you can look it up fairly easily. The conversion is not that complicated, but it is time consuming. It really helps if you know your way around macros in excel as this will significantly reduce the time spent on manipulating the data for conversion.

100% agree. Recreating all past plan years for all plans is just not realistic. What you CAN do is is add certain historical data like compensation, contributions, distributions, etc on a year by year basis. You can upload that data separately from your conversion data using simple csv worksheets. The trick is going to be whether you can export the data in a user friendly format from your current provider

@Belgarath @ETA Consulting LLC @actuarysmith @Bill Presson I submitted this question for this years ASPPA Annual "ask the experts" panel discussion. Sal Tripodi maintained his position that it should be tested as separate controlled groups for the reasons outlined above. Another panelist pointed out Derrin's position and that there is no real consensus on this issue and that there is no direct guidance. It was also mentioned that when discussing the issue with the IRS for a prior year IRS Q&A, the IRS answer was that either approach "would not be an unreasonable interpretation".

Depends on what you mean by bringing over. Are you looking at converting all years on a year by year basis?

Yes.

Are there other "great opportunities"? Kidding aside, I have seen some crazy investments with amazing returns, but like I tell my clients, that doesn't mean that they are appropriate investments for a plan...

This is by no means limited to a geographical area. It happens wherever a client has an adviser with a "great opportunity for investment" .

That is what I would do. Just make sure it is invoiced AND paid in the year when the forfeitures must be used.

Why would you have plan procedures that you approve something that you can't legally do and then ignore part of the order you just approved? It is just a non-starter in my opinion.

Same here. EDIT: Not always a copy from the audit report. Most platforms have an import option that eliminates most of the work though...

The more I think about it, the more I gravitate towards @Kevin C's conclusion. Here's is where I get a little stuck though. Without some kind of action on the part of the plan, is the clause in the employment agreement even enforceable? From a plan perspective, they are still allowed to participate. So is is an unenforceable restriction still a restriction?

I agree with the above, I don't think it is has to be goodbye safe harbor. You have an unenforceable clause in the employment agreement and an operational error in the plan that can be corrected. Going forward, look at a proper exclusion in the plan document if possible. They made a mistake in the employment agreement and now they get to pay up for not checking with their plan expert first.

Section 318 makes it clear that a spouse of an HCE (because of ownership), is also an HCE due to attribution. A spouse of an HCE who is not owner (compensation test) is not an HCE unless the spouse also happens to satisfy the compensation test. So you could have a non-HCE spouse of an HCE. Without aggregation, under what mechanism is the spouse of a non-owner HCE also an HCE (Assuming the spouse does not also satisfy the compensation test)?

Absolutely, the spouses can't be included unless they are also employees. As for 1.414(q) Q&A 11 and 12, they deal with family aggregation (rather than attribution) which would only apply to pre-1996 plan years due to SBJPA. Right?

You should look up IRC §318.

Employee (and thereby participant) is defined by the Code, so however creative you try to get in your document really wouldn't matter.

The most simple answer I can come up with is that a plan has to be maintained for the exclusive benefit of employees and former employees (the exclusive benefit rule), and what you are proposing would violate that very basic premise.

HA! I have been thinking of asking Dave to add some sort of "ping" feature but it appears he already thought of it!

ASPPA Net and NAPA Net news bulletins usually have a few good reads, free if you are a member but not sure if you necessarily have to be a ASPPA or NAPA member to get them.

I think you can successfully argue both dates. But in theory, in order to terminate on 1/1, wouldn't it also have to be active on 1/1? If we terminate on 12/31, lets say at the very end of 12/31, the plan clearly starts 1/1 as terminated and your count is 99. If it does not terminate on 12/31, it has to start 1/1 as active, right? Technically the count would be 200. I don't think the IRS would ever argue it this way but 12/31 makes more sense to me.