CuseFan

I do not think you can formally state two groups, those employed 2/15/PY+1 and those not, because a person's grouping is not determinable by PYE. Draw a parallel to changing an HCE top-paid group election after PYE, where the result changes a person's status under the plan, which is impermissible. Using individual allocation groups in the document but in practice determining two allocation groups by your desired methodology is the best way to accomplish what they want IMHO and I think that of most others. If said 2/15 fell on a weekend or holiday and/or for whatever reason the plan sponsor wanted to accelerate or delay that date, individual groups compared to hardcoding, even if such was permissible, makes administration accommodating. Just because the document allows for flexibility doesn't mean it needs to be used. Finally, you mention a parent and a lot of subsidiaries all with their own plans with separate RKs and independent testing. Is no one concerned about testing in consideration of the control group?

Reasoning? If they want so they can invest in whatever they want versus being limited to the same fund lineup, then you have a BRF discrimination issue.

Also agree with @justanotheradmin and @Bill Presson. Assuming no coverage and nondiscrimination concerns, I would use the everyone in their own group document provision and then utilize that 2/15 methodology for allocation determinations. What you lose in that is the ability to statutorily exclude from testing those who terminate during the plan year with 500 or fewer hours. I do not think you could write the 2/15 of the following year into the document as your allocation entitlement would not be determinable by the plan year end. I think someone in this forum asked this same question (maybe with different date) within the last year or two, if memory serves.

Union covered employees (if retirement subject to GFB) and non-union employees are subject to mandatory disaggregation. Furthermore, if you have a plan covering employees in different unions, I believe that each union represented constitutes its own disaggregated "plan" for coverage and nondiscrimination. As @ESOP Guy states, be sure to check the plan documents for proper inclusion or exclusion of union covered employees.

Agree with @David D - including the 1099 situation not appearing correct unless something else going on. Are the owners each single member LLCs that own the company and company then pays the LLCs via 1099s. Even so, the LLCs would be either incorporated (C or S) or not (sole prop) and pay their owners via W2 or K1, respectively. Then (I think) the LLCs are disregarded entities and their earned income should count for 401k plan. If that's not the case then that whole 1099 situation is wrong IMHO - but I'm not an accountant.

The 80/120 rule only applies with respect to which 5500 form a plan may file, nothing else that I know of.

Paul I is spot on with everything. Remote or hybrid arrangement with zero industry experience, not going to happen. My guess is that an employer would want at least 2-3 years of direct on-site experience and supervision of a new hire w/o prior experience before entertaining a remote or hybrid arrangement. My experience is that you learn and retain more with the direct supervision, knowledge sharing, and professional discussions you get from being in an office, not to mention relationship building. From homicide detective to 401(k) administration? I'm sure she has her reasons and best of luck to her. Paul I provided great suggestions.

If the MPPP component is currently active then an advance 204h notice is required prior to such component being frozen/terminated. Only affected participants (active in the MPPP component) need get notice. If the MPPP component is not active as it was frozen previously, for which a 204h would have been required at that time, terminating the plan with that component does not trigger another 204h requirement. We see this all the time in DB world - issue 204h notice when plan is frozen, not again at termination (but is referenced in the Notice of Intent to Terminated - "NOIT").

Agree with your suggested solution but also strongly suggest some formal legal guidance which could also ascertain risk. I would not "cheap out" given the size of the assets. Other key thoughts: who made the mistake, when did it occur, when was it discovered, and how soon thereafter was it corrected? Was this one big errant transfer or a series of errant transfers? Were they caused by honest clerical errors or was someone asleep at the wheel not paying attention. Was this the plan sponsor's doing or a third party? Documenting all that and fixing ASAP at a minimum is what I would suggest - put the plans where they'd be had the mistake(s) not occurred. Maybe a VFCP filing would be appropriate. My only formal advice here - get qualified legal guidance.

What is the bonus practice of the employer? Even if allowed in form via a current amendment, you should verify that excluding bonuses would not result in a discriminatory definition. For example, if bonuses are across the board but HCEs are already at or near the 401(a)(17) maximum compensation such that little to none of their bonuses are excluded in practice, that could very well prove discriminatory.

I think Peter is correct and I think income tax withholding on such is legally required. I also wonder then, since the income tax withholding amount is also taxable income, doesn't that require withholding necessitating a circular calculation? That circular calculation yields $215.77 in income tax withholding that is equal to 22% of $980.77 ($765 + 215.77). However, I wouldn't split hairs on that and would accept whatever the payroll system delivered, provided it was at least Peter's details above. Of course, if there is mandatory state income tax withholding then all this must be adjusted for that as well.

Check the BPD - it should say that for a self-employed individual their compensation is their net earned income from self-employment, so whatever AA option gets checked I don't think it matters much.

True, but if the employer is locked in for gateway purposes, especially adding a CBP to the testing, discontinuing any SHNE isn't likely in the cards.

Agree with Effen, this isn't new and it hasn't gone away and there never is or was an exception for plans without NHCEs. What is interesting is that you say this is an IDP and that provision has been in the plan all along unless I misunderstood and that was added with CB conversion. So presumably they have received an IRS determination letter, probably two, with that anomaly of a disqualifying provision.

As we all try to navigate the year-end craziness and balance life with family and friends, I just wanted to wish everyone a safe, relaxing and enjoyable holiday season!