CuseFan

If the plan document allows for such (or is amended for such).

Yes, it's allowed but I think it must be done (plan adopted and deferrals made) by the unextended tax return due date. I believe that's the rule, someone will correct me if I'm wrong. Here is an article stating such. I don't usually rely on Ascensus for technical issues but this agrees with my understanding. https://www.ascensus.com/industry-regulatory-news/news-articles/retroactive-first-year-elective-deferrals-for-sole-proprietors/

I would save all documentation, and then do a typical missing participant search. The plan/plan sponsor/plan administrator hopefully has an administrative procedure for such and if not, now would also be a good time to develop one.

Then it would appear the statutory exclusion for non-resident aliens can be used provided such language is in the plan or, if not in currently, then amended in prior to this employee's otherwise entry date.

Way out of my practice area but I always read these H&W postings because I know you usually respond and I find myself learning something. Thanks

Agreed, and personally, I would not include. Parallel question - if plan accepts rollovers from employees before becoming participants and an employee does such a rollover but was not a participant as of EOY, would you include them?

Both the AA and the BPD comprise a plan sponsor's plan document. Therefore, to the extent a provision is delineated in the BPD without any corresponding AA selection, the BPD governs and should be followed. Not everything can/will/need to be outlined/selected in the AA and anything that is not expressly provided in the AA via a permissible selection is subject to any BPD mandates.

Maybe a stupid question, but did you look at the average benefits test for coverage of the small plan? If yes, and that does not pass either, is there a defined failsafe in the small plan's document? If not, could an 11(g) amendment to the small plan allow for change in testing method to enable aggregation? Regarding #4, yes, aggregation is for coverage, nondiscrimination and BRFs, all or nothing.

Another thought, as the old partnership is remaining open, is there possibly an ASG for a brief period and, if so, does that link prior and new/current plans together for 415 purposes in perpetuity? It looks like much more of the gray area is leading to connecting the plans and a 415 offset.

I'll play devil's advocate to be feisty and get you riled up. Apologies in advance. Excluding NHCEs from a 401(k) plan might be advisable where they do not work 1000 hours ever for YOS eligibility but the plan wants eligibility determined on elapsed time. Of course, as soon as one NHCE becomes non-excludable you have a coverage failure. We see NHCEs excluded from small employer DB/CB plans many times when aggregated with DC to satisfy coverage and nondiscrimination AND the DB/CB covers enough HCEs to satisfy minimum participation. BUT I agree with your WTF, and would grill the drafters of these plans as to HTF they satisfy coverage, nondiscrimination and for the DB minimum participation.

If your service is used to calculate the benefit then you can use it in your testing.

I don't know. The other issue, still have an initial 415 limit of 1/10 the dollar limit as of 1/1/2023 and 12/31/2023 (assuming it's higher than prorated comp limit), which could make defining the OAB and ongoing credit a challenge.

Immediately, would be my guess. Then the issue becomes one of prudency for maintaining a non-diversified fund. I recall a large employer court case of a similar nature, don't remember the companies or how it resolved, but this is not a unique issue.

You can start with an opening account balance for a past service benefit, but past service is limited to a safe harbor of 5 years, otherwise must be nondiscriminatory. However, you need to align the DCP and test balances accumulating from the same date. Note that if you use prior service to "dilute" current high HCE credits, the impact of that dilution decreases dramatically each subsequent year, so it's not the best longer term strategy to pass testing. That said, it might be a quick fix for year one and possibly year two testing, if you're using an OAB to bump HCE(s) up or waiting on young new NHCEs to become eligible and help pass annual accrual testing.

Tax-exempt entities do no have deduction limits but individual 415 limits apply.

True, and good point.

Great point - all HCEs means no coverage or ADP testing issues but if top-heavy because non-owner/non-key HCEs do not defer or do not defer enough, then they must get a THM from the employer.

If you got a delinquent filing warning letter after filing the current return in July, because those prior delinquent program-filed returns were not yet processed, your recourse is to provide proof of those filings. You should always keep copies of signed and dated paper filings, mail them certified return receipt requested, and keep all related forms, receipts, etc. together. Filings should always be made using the plan sponsor's (the business) EIN. the plan/trust ID is only used for trust level reporting such as distributions.

Agreed, and believe it's a one-way street. (And don't say but you're only going one way!)

Exactly. It is possible if the CBP document says rollovers are accepted, but it must be tracked as a segregated account (RK-wise, assets do not need to be physically segregated). It doesn't affect the benefit obligation of the CBP, so in the word of Effen:

Agreed - he is the consummate professional when dealing with these Totally Ridiculous Propositions.

1. I would think that if you are concurrently sending in 3 late returns that the first chronologically would be the first return and so the next two would leave box A blank. You could not have multiple "first" returns so I think this is the only way that makes sense. Also, I would interpret as the first plan year for which a filing is required. I do not have any direct experience with this specific issue but that is how I would handle. 2. I would still do that for added clarity, it doesn't hurt. 3. Sorry, I'm having a hard time not laughing at the presumption that if these filings are done now that they would all be processed and cleared/closed come July and the current filing due date. That may happen, so waiting might avoid having to deal with a notice. That makes sense and you haven't lost anything if you still get a notice because those prior returns are sitting on some IRS agent's desk.

Yes, saw the posting in BL - that is great news for EAs and makes total sense.

From what I've read in multiple places, IRC Section 457 does not apply to churches. Since it's 457(f) that makes amounts taxable upon vesting, I don't think you have that issue. This is a nice article albeit 20+ years old. https://www.churchlawandtax.com/stay-legal/clergy-law/nonqualified-church-retirement-plans-should-be-legally-reviewed/

All you can do is lead them to water, if they go thirsty that is their choice.