CuseFan

I don't know if company being an S-corp makes this impossible, but can't the company distribute the shares and then repurchase them directly from participants? I know there is an ESOP guy on this forum, so hoping he'll chime in with a definitive answer for you.

1984, so I came in as most of TEFRA became effective (right? passed in 82, effective in 84), have all the legal alphabet soup under my belt, except of course for ERISA. Over the years, the one thing I noticed was the increasing creativity of the law acronyms, starting with COBRA, but certainly with CARES, SECURE and now EARN, RISE and SHINE - someone gets paid good money to think these up! Finally, an old timer's trivia question - who remembers Section 83, what is was and what ultimately happened to it. Clue - maybe the biggest time waster for employee benefits professionals in the last 40 years.

Allow some older practitioners their nostalgia!

and it would already be included in box 1 taxable so no add back required

You don't NEED to restate, but you do need to make sure the plan is fully up to date with law and regulations (even if interim amendments are not yet due) and the best way to ensure that is to restate and include the plan provider's amendment for terminating plans.

If CG then you must aggregate for $250k threshold. Is this a CG because CA is a CP state, or because they have minor children, some other reason? One or more of the current pension bills being considered (SECURE 2.0, RISE and SHINE, EARN) has provision for making these situations not CGs w/o needing to worry about community property or minor children, but whether that makes the final cut and gets enacted, we'll see.

Not sure, but why? If it's a RK issue they've already had to deal with it. Why not wait and eliminate 1/1/23?

Corey, that is exactly what I remember - what I can't remember is where I saved it before, if I did, probably next to the car keys, cell phone or TV remote! So was sure to save this is in logical (for now) place. Thanks!

I recall that bona fide vacation and sick leave plans are not considered deferred compensation, but would suggest the employer have qualified counsel (legal or industry expert) opine on its particular design/plan. As another forum contributor disclaims - the free advice you get here (although sometimes very helpful) should be viewed as worth the price you paid.

I thought I remember seeing a flowchart on ASG determinations somewhere a number of years back but couldn't find it in my on-line library. You can ask Google, that's often my first step. I use the WK answer books as a resource and also recommend Derrin Watson's Who's the Employer? but many of the ASG rules are still clear as mud to me. Some situations are very apparent one way or the other, but anything with a hint of gray I'm with CBZ and steer them to qualified legal counsel.

Agreed, you have to pass coverage and that is the only way. Most plans that still allow the opt out also have provision where sponsor may revoke if necessary to satisfy testing. If person was only NHCE at the time, then such opt out election never should have been accepted at the time.

Agree you should use prior info until current filing is made and reports the change.

Or as Forrest Gump says, ....

I agree, I do not think you can roll a "regular" in-service distribution directly back into the same plan. Also, you have to deal with the 20% w/h, which means coming up with the cash or restoring less. If it's that short term a cash flow concern (and assume plan loan not an option for whatever reasons), then there have to be other short-term borrowing options out there. You could jump through all sorts of hoops - roll to IRA (avoid w/h), take IRA distribution (avoid w/h), use funds, restore funds, roll back into IRA, roll from IRA into plan - a lot of trouble to avoid minimal short-term borrowing costs? Unless there's a risk that the funds might not be restored within two months.

So if you do not count that overlap at year-end, make sure you include any prior year overlap that hit in the beginning of the year. Also, if vacation pay was for the current year then those hours should also be counted for the current year - plan's statutory definition of Hour of Service should be clear on that.

Agree w/Lou, thought that was prohibited a few years back.

Although it "smells funny", no, if you do the amendment when the person is hired or shortly thereafter, by the letter of the law they are NHCE.

My HC guy - got a guy for everything! - says that although the underlying HDPD is an ERISA benefit the HSA is not, it is an individual's account (like an IRA) that is not employer sponsored and therefore he does not think that an employer can mandate employee contributions thereto.

I don't think a resolution is enough - pre-SECURE would you allow a new plan for 2021 with 2021 resolution but 2022 plan adoption date? Also, resolutions can be and do get rescinded all the time before execution of the action items. I do not think a resolution creates a plan and I don't see how you can have a deferral election for a plan that does not yet exist. I would also recommend against.

Agreed, but I would do currently as a planned amendment rather than later as a correction - just my personal preference, which also ensures you changed plan eligibility for this person before they became an HCE if they do subsequently become one.

Interesting question - I Googled and did not see an answer. I know that employers can require mandatory pre-tax employee contributions to their 401(k) or 403(b) plans as a condition of employment, in which case they are not treated as elective deferrals subject to the 402(g) limit but are included in 415 limit, but do not know if there is similar type of provision for HSAs. Asked one of our very knowledgeable healthcare consultants and am waiting on his answer, will post when it comes through.

Then the interim valuation is a non-event for them. Whether there is a legal obligation to provide the statement - I don't know but I think not. However, if there are any other pre-2022 separations who have not requested distributions, I think they need to get statements too.

There may or may not have been a termination of employment but whether the person enters on 7/1 or 8/5 doesn't matter as TH based on full year pay unless considered terminated (again?) before PYE. Employer should make the determination - was person terminated in payroll system, did person's other employment-related benefits stop, was the person offered COBRA? Reductions in hours, working on an as-needed/on-call/per diem basis is generally not a termination, in my opinion. Otherwise, I think you put yourself in position of tracking a string of hire and term dates for each temporary stint, two weeks here, then another week a month later, and so on and dealing with the break-in-service rules - which I have seen done and it wasn't pretty.

You can spin off a plan - that is, split a plan into two or more pieces, regardless of any changes or lack thereof to the sponsoring employer. The new plan, for the division being sold can then be merged into the buyer's plan. However, if those employees are terminated from B, you can distribute according to elections or possibly do a trustee to trustee transfer w/o the administrative hassle of a spin-off merger. Also think about vesting for these employees, which might need coordinated effort/agreement between buyer and seller if full vesting is desired or non-vested balances are to be transferred as well, and then there's the possible partial termination. I'm sure others in this forum who deal with 401(k)s more than I may have further insights.

Assume currently an NHCE. I think you can do, but why amend twice? Why not amend once to say, "notwithstanding, employee X will enter the plan effective MM/DD/CCYY" or something similar, or employees hired on A or between B and C?