CuseFan

If the plan compensation (excluding gift cards) passes non-discrimination testing then you may use that as your testing compensation and gateway, but top heavy (if applicable) must be based on total compensation.

This seems logical - early DB entrants being OE and tested separately/excluded from primary test and gateway.

It seems as if the Forms and SPD have created the administrative procedures for such items not specifically contained in the document, assuming there are no other written procedures concerning this, and the question is whether the fiduciary/plan administrator reasonably interpreted those procedures in processing the claim/form as valid given all the facts and circumstances, or acted in an arbitrary and capricious manner ignoring its own administrative procedures. This looks like a situation that could be headed toward litigation, if not there already.

I don't think so, looking at the form and instructions, I don't you need to file until the final filing.

Don't think so, but also remember that neither spouse can be involved in the other's business for a control group to no longer exist. Sometimes, sponsors and/or their practitioners want there to be a CG and so create some cross-involvement to get there.

Yes, there is no control group, but if each entity had the same type of plan then the 100%/51% owner would have an aggregated 415 limit.

Agree with Austin, and would dive into service agreement with RK A to see if their position is supported or they are just being "difficult" because they lost the engagement. Of course, if all the other SDBAs have already been liquidated and maybe didn't actually have to be, that is another potential can of worms. Could that SDBA be left behind until resolved, as a couple above have alluded? It's still (or should be) in the name of the plan, would just be outside the RK B system for now. If other SDBAs get re-established with RK B then you have a case for there not being a BRF issue.

Exactly, that would be a very plausible reason for final filing to show BOY $0 and EOY $0 as is the now worthless assets. Even if it is scrutinized, nothing to see here, just move along.

Was the over deposit on maximum compensation? If not, maybe finding a way that compensation can be "adjusted" so contribution comes in at 9% or claim mistake of fact/math error? If max comp and a 9% PS was declared and this was a clerical error, then maybe refund on mistake of fact for that? Any adjustments, whether to comp or contrib (refund) will have some compliance risk.

Isn't it the limit in effect on the first day of the PY, so $245k? I see no way for it to be $265k, but may be the 2021 limit (probably not unless freeze was at 4/30/2022).

We use FTW for documents as well - was a Relius user for years (back to Corbel days) - did not like the switch at first but could not imagine going back now.

My understanding - and I thought this came up not that long ago and I opined similarly - is that you can only do that if the CG files a consolidated return, which is clearly not the case here. So for CG AB, A cannot make contributions and take deduction for B's employees on A's tax return, or vice versa, but either can contribute whatever toward A's and B's employees if AB deducts on a consolidated tax return.

They can be, but not necessarily, and such should be closely examined in the person's state of residence (bankruptcy laws). The administrative burden - continuing restatements, interim amendments, 5500 filings - and associated costs should be weighed against any real (not perceived) difference in levels of protection.

I understand, and if you've asked about any other plans (including SIMPLE and SEP) ahead of time and made clear there are deduction coordination rules, then having their deduction limited by not disclosing such is on them.

Ok, not sorry!

Mistake or not, the participant's actual election was executed, so I say have them fix it going forward and deal with it. Why is it always the collective "we" - plan sponsors, advisors, TPAs, RKs - that are asked to bend over backwards to accommodate a participant's mistake, poor judgment, or lack of attention? When is the participant held accountable for not doing what (s)he is supposed to and then months or years later comes looking for help on situation (s)he could have rectified almost immediately had (s)he paid the slightest attention? I'm sorry, but if I intended to make a PRE-TAX deferral from my pay and my income tax withholdings remained the same, I would have noticed and said something - if not after the first pay period, certainly within a few. Sorry for the rant, and I don't do this administration so I don't deal with these situations - but you all do - and don't you have enough work and have enough plan sponsor and advisor administrative "issues" to fix already? OK, I'm done. Also, it's 9/11, so let's remember those we lost that terrible day and from its aftermath.

In summary - SEP no if on 5305, yes if on another platform but limited to 6% of compensation (if PBGC-exempt) or 31% combined plan deduction limit applies. I see no legal basis for taking out the SEP contribution other than it being a withdrawal of a contribution which is already "in the books" and so you deal with the 31% limit and carry forward DB deduction to 2024. Depending on 2024 max, might need to do another carryforward in year two. All the related SEP coordination should have happened before DBP was adopted and, if it was and the client or advisor ignored, their problem not yours.

Peter, as one who does not get involved in that level of administration, I'll give you my opinion from a top-level viewpoint FWIW. "Must" the payroll function cut off deferrals when limits are reached? No. "Should" the payroll function have the ability to recognize the highest applicable limit available to a participant and only stop deferrals once that limit is reached? Yes, in a perfect world, and certainly yes for any payroll service company that claims to be full service. For those companies that use third party software to run their own payroll in-house, such software may lack the ability or the users lack the programming skills to properly account for all the new complexities associated with recent legislation. In those instances I think they should make every effort to properly administer limits and try to at least account for most situations. Yes, it is easy enough to identify and correct excess deferrals after year-end through corrective distributions (I am not a proponent of playing with W2s after the fact). Besides the added administrative work, the other ramification could be under withholding on income taxes for an affected individual who gets a material taxable refund. The employer would need to make sure recipients were able to make timely tax withholding elections on their refunds to avoid be under withheld. If I'm the employee, I might consider this a big hassle and ask why should I have this inconvenience because my employer or its payroll provider can't properly administer legal limits? Furthermore, if I'm expecting my deferrals to be stopped at a certain point and they aren't, I'm not getting a part of my pay that I was expecting. Yes, I could then elect to cease deferrals, but then I have to elect to restart come 1/1, putting the administrative burden on me the employee. Anyway, that is my humble opinion.

A person starts a new job, usually gets various employment forms to review and complete so just add this to the list. Basically, you can make an affirmative election now to enroll or not enroll (defer 0%), and pursuant to this notice, if you fail to make an election you'll be automatically enrolled on X date. This is always the concern for any administrative task foisted upon a small business.

Be careful if such terminated employees cannot be statutorily excluded from testing, it might create compliance headaches for nondiscrimination, gateway in DCP and minimum participation percentages.

Yes, if the document reference is to the account balance.

If it is truly severance pay - pay given after termination of employment to which the person would not otherwise had been entitled to - then it is not considered compensation for retirement plan purposes and should not be considered for deferrals or matching contributions.

Was the form filed with 10021.00 or simply 10021? If the former, scanning/screening application may not have been expecting dollars and cents.

Agreed, otherwise it is a CODA and you must comply with the 402(g) limits.

You can use historical compensation, including prior to plan adoption, from the entity sponsoring the plan and from any entity within the control group - which ABC and XYZ were not a control group. Joe would have had an aggregated 415 limit IF both ABC and XYZ sponsored DBPs but I don't see you being able to use historical XYZ compensation. I think Joe has 415 FAE of $150k from ABC 2015-2017.