CuseFan

Generally, related employers are those that are in a control group or affiliated service group of employers. You consider the related employers as a single employer when applying the qualified plan rules for such things as coverage and nondiscrimination. Example, A is parent company that owns 100% of subsidiaries B & C and sponsors a 401(k) in which employees of A, B & C are all eligible to participate. This is considered a single employer plan. A multiple employer plan is a plan in which more than one unrelated employer participates. Example, companies A, B & C are each owned 100% by three separate unrelated individuals who are friends from college and decide to adopt the same 401(k) plan for their employees to gain economies of scale. This would be a multiple employer plan.

Correct, whereas a W-2 comp definition includes GTL, a 3401(a) comp definition does not.

Great point Luke

https://www.irs.gov/retirement-plans/self-correction-program-scp-faqs Two-year SCP window. IRS website actually gives an example of 415 failure for 2016 that would eligible for self correction by 2018.

Odd question because 3-year cliff is quite common and basic - you weren't asked to set up 3-year class-year vesting, where each year's contribution vests after three subsequent years? Because class year vesting is definitely no longer allowed in qualified plans.

Exactly - whether a US citizen, resident or not, your spouse must be primary beneficiary. In order for her to get a payout from the plan, if it ever came to that, she would need either an SSN or an individual TIN. The tax treatment, withholding, etc. depends on tax treaties with the country of residence/citizenship and can be complicated as the king noted. It is not a legal requirement, that I know of, that SSN/TIN be provided at the naming of a beneficiary but it is certainly a best practice.

Agreed. It's an interesting premise. I'm curious that you say "discrimination" but don't specifically say what kind(s), as there are all sorts and successful litigation often results in damages that may or may not be considered retroactive pay. And the assertion of hundreds of thousands of employees sounds more to me like misclassification of employees as independent contractors, which is entirely different. Many retirement plans that (mis)classify EEs as ICs are still able to legally exclude them from participation if subsequently determined to be common law employees, subject to compliance with other requirements on coverage and nondiscrimination. Regardless, I'm sure Peter can steer you in the proper direction.

If I had a nickel for every $.05 check I received over the years ...... Have the brokerage close the account, tape a nickel to a letter and send to the participant, like various charities do. They've already spent far more in accounting for this already. As an old acquaintance used to say all the time, "there ought to be a law..." - and in this case that any amounts under $5 left in closed out accounts may be forfeited to the custodian and used to defray expenses.

Using Paychex as your 401k provider is problematic regardless and it's likely well worth the $1500 to get the heck out, from wherever it's paid. A transfer/de-conversion fee paid from plan assets is probably OK. Whether some other action taken by the sponsor triggers such, I don't think matters. Clearly not an issue for someone not using them for payroll.

Yes, that is the potential issue. I do not think there is definitive guidance/prohibition and I do recall getting a D-letter years back for such a design, but before all the hybrid regs were finalized. I would just suggest treading carefully and researching thoroughly before going that route. But if 0% for all, or a subset that satisfies coverage/BRFs, then not an issue. Or, consider using actual ROR as the ICR.

Yes, you can have 0% CB ICR but may have issues satisfying 401(a)(26) meaningful benefits if plan-wide and other issues if only for HCE(s). We have DBP and CBP with Sharia-compliant investments (and an internal investment group that does it), and traditional DBs have an assumed investment return within funding, which is essentially the same as a CB ICR. These are usually exclusively Muslim-owned practices rather than one or two within an otherwise non-Muslim group.

Depending on how long the existing plan has been in place, you might have permanency rule issues. Unless there are excess assets they want distributed or sizeable liabilities they want to take off the table, why not just convert the DB (I assume traditional) into a CB? Plan terminations are not always trivial exercises either, if PBGC covered and/or filing with IRS.

Agree with Lou - we do similar with CBPs, have the contribution rate in separate addendums that go only to those in a respective group. And yes, you could have a group defined with just one employee.

If you have the 401k Answer Book there is a great table showing various compensation definitions (W-2, 3401a, 415) inclusions, exclusions and permitted safe harbor exclusions (i.e., fringe benefits). This may have been pulled from an IRS website, so you might find there as well. NQ options, Section 83 elections et al are included in W-2 and not noted as among the 414(s) safe harbor exclusions. A lot of our public clients that have stock based compensation - options and restricted stock - specifically exclude stock-related income from their compensation definitions in their plan documents (many, but not all, are IDP rather than VS) which further leads me to opine such is not a fringe benefit in the statutory sense. However, if the plan (AA and/or BPD) simply say "fringe benefits" without any further clarification or code reference, then maybe the Plan Administrator makes an interpretation of a vague provision and takes the position that these are fringe benefits and excluded, which may be defensible if consistently applied and primarily (if not exclusively) affecting HCEs. Then for clarity, add specifically to the next restatement.

And part of your RMD each year will be non-taxable return of "investment in the contract" with respect to your PS 58 costs.

That is the case - and age 72 now. You cannot force the A/P to take a distribution.

You can only change your eligibility prospectively. This would be very messy mid-year because people would have already become eligible for match - whether they deferred or not is irrelevant - and would need to be included in ACP testing as your TPA noted. However, your plan can carve out the early entrants who are otherwise excludable and test them separately, for ADP or ACP or both. That is fairly standard for plans with less than the statutory eligibility limits (21 & 1, dual entry) and can help testing unless you happen to have an owner's spouse or child becoming eligible. Your TPA should be explaining all this and more.

seconded

So company email is sent to all employees and it is up to the employee to figure out if they are eligible to enter as of the next entry date and then take action? Is that considered notification? I could make the argument if I had to but would not be overly comfortable/confident that it would fly. You mention SH - does the plan provide the notice (or did they stop)? The SH notice - if sent and if this person rec'd - is likely a better argument for notification of deferral eligibility. Agree with BG on best practice.

I think you could argue that allocation of excess assets is not part of accrued benefit calculation/determination and so not subject to that plan imposed maximum benefit. If you still have ability to amend the plan, you could accommodate that way.

This is not an election, not eligible for rollover, and is required to be paid by the plan for continued qualification, so no forms should be needed.

As Forrest Gump and his mother say, "stupid is as stupid does", expensive lesson learned (hopefully) by the plan sponsor.

Also, plan document should specifically state how to determine FAE if a person has fewer than the number of years for the averaging period - and it's always use the compensation averaged over the service they actually have.

Exactly - we do these all the time: deferrals, catch-up if eligible, 6% PS (be careful to use correct "compensation") and max CB. And if they have the income to support it, do some voluntary after-tax up to the DC 415 limit and then in-plan conversion to Roth.

I think you shut off includible compensation and deferrals as of the plan termination date, provided there is a resolution (and amendment, if necessary) for the plan termination on that date and you're not just assuming the plan terminates because the sponsor is being acquired effective that date. There are various scenarios that could apply depending on the specific M&A transaction. If the sponsor is simply ceasing to exist and the plan needs to shut down and the employees are all terminated from that sponsor (and no formal plan termination resolution/amendment as of X date) then I think you need to look at the plan's post-severance compensation provision for your answer.