kdubinski

Company A and Company B are part of a controlled group. They each have their own 401(k) plans and TPA firms. Company A's 401(k) plan can't pass coverage on its own (neither ratio or ABT). The Plan's have been permissively aggregated for coverage and discrimination testing purposes in prior years. I anticipate having to permissively aggregate the plans for the 2020 Plan Year as well although I don't have data for Company A as of the current date. Company A will have an ownership change in April (although it could be June or July). Employees will terminate employment with Company A and become employees of Company C. Company A would like to terminate their plan prior to the ownership change. Does anyone have any suggestions in regards to the 2021 coverage test? I anticipate the plan would not be able to pass coverage on its own (for the short plan year). Would I be able to use the 410(b) transition rules? Due to the ownership change, do I get a free pass on coverage testing? Do I tell the client to wait and terminate the plan on 12/31/2021 so I can use permissive aggregation for the 2021 Plan Year? Any suggestions would be helpful. Thank you.

I have a 401(k) plan which utilizes a safe harbor matching contribution. Prior to 1/1/2018, the eligibility for all contribution sources was date of hire. The plan's entry dates prior to 1/1/2018 were date of hire. Highly compensated employees are excluded from receiving a safe harbor matching contribution. Effective 1/1/2018, the eligibility for safe harbor match was amended to 1 Year of Service. The entry dates were amended to 1/1 and 7/1. Unfortunately, it has been discovered the client has continued to use date of hire for eligibility and entry date purposes for the safe harbor matching contribution. My question, can an amendment be done now to take the safe harbor matching contribution eligibility back to date of hire and the entry date back to date of hire for 2018? For 2019, the plan would move forward with the 1 Year of Service requirement and dual entry dates. The plan does have a discretionary profit sharing contribution component. The eligibility is date of hire and the entry date is date of hire. Vesting is 100% immediate for all contribution types. The ineligible safe harbor matching contributions could be characterized. Any thoughts would be appreciated. Thank you.

I have a safe harbor plan that utilizes a basic safe harbor matching contribution. Currently, salary deferral contributions are withheld from all gross pay including (but not limited to) vacation pay, sick pay, and bonuses. The client would like to allow participants to separately elect to defer from any bonus paid to them. Is this an acceptable mid-year change if the proper notice is provided?

Companies A, B, and C are part of a controlled group. Employee is not an owner of Company A or Company B. As stated above Employee is an owner of Company C (Limited partner or other LLC member). No compensation on line 14 A of Schedule K-1. He receives a W-2 from company B.

Three companies A, B, and C. Company A is a Plan Sponsor of a 401(k) plan. Companies B and C are participating employers. Company C is an LLC taxed as a partnership. Employee is a 20% owner of Company C (Limited partner or other LLC member). No compensation on line 14 A of Schedule K-1. He receives a W-2 from company B. Would Employee be considered a highly compensated employee in the 401(k) plan for discrimination testing?