CuseFan

Absolutely correct - if you have HCEs in 20+ tier and NHCEs in a lower tier (under 15 gets no more?) then you have an HCE getting a higher rate then an NHCE and violate the SH rules.

Except for mistake of fact rules - but those are different from "we screwed up."

You have continued interest and, if still employed, service credits post NRA. Suspension of benefits notice can get you out of actuarial increases, but only if still employed. Be careful, because low interest credits alone may not be sufficient post-NRA adjustments per IRS.

Or maybe we're all supposed to rely on the new-found integrity of a barred individual that leads him/her to refrain from serving as a fiduciary because, you know, it was just an honest mistake the last time....

I agree. I think the only time you're required to include compensation while not a participant (other than when the plan says to) is for top heavy.

Client has integrated final pay plan that they plan to freeze at end of current year. However, they would also like to credit all active participants as of that time with an additional year of service. So if someone has 20.667 years of credited service (they use elapsed time), they would be bumped up to 21.667. Plan satisfies coverage and integrated formula is 401(l) compliant (1% /.5% at $4800). Does giving everyone an additional YOS mess up my integration and force me to general test, or am I still safe harbor because everyone gets it? Any other potential traps for concern?

First worry is you have to pass coverage. So if D & E are failing coverage on their own, the next logical step is to aggregate them to see if D/E combined can pass coverage. If so, then you have to test D/E combined for ADP and ACP. But, if E doesn't have a match, not sure how you can get D match to satisfy coverage. Prospectively you can make HCEs ineligible for match, but that doesn't fix the past. If E has a discretionary match provision, a match to E could make fix the coverage problem. If not, an 11g amendment that adds a match to E may the only way to fix.

IRC Section 401(a)(11) spells that out.

I agree with Mike, but the plan termination will create a subsequent RMD for this person once the distribution is rolled over, assuming it goes to an IRA and not another plan of the employer. However, that becomes her responsibility and not the plan's (or yours).

Do ESOPs get an exception to the requirement that all plan assets must be distributed timely (generally within a year) after plan termination?

i don't see a problem in general, especially if it's only a couple of payroll periods - deferrals come out correct in the end, as does take home pay and tax withholding. HOWEVER, if you have matching contributions and they are calculated on a payroll period basis, the plan sponsor may need to make manual adjustments.

Again, depending on what the document says, maybe explain (threaten) that any unclaimed balances at the time of final distribution get turned over to the state?

Takes a taxable distribution from IRA of $X and then makes a tax deductible PS contribution of $X? Why? Why not just roll from IRA to PSP if you want the funds in that plan (for a loan maybe)? If under age 59 1/2, IRA incurs penalty tax, creating a losing net position. Not to mention the need for sufficient earned income from business activity because the IRA distribution is not. You say it's already done, so questions are moot, but I'm sure I'm not the only one extremely curious as to why someone would think this was a good idea.

The elected form, but yes, all should be in document.

Doesn't look like management company relationship, and certainly not professional services, so no ASG and unless parents/sons stock ownership attributes to the other group (which I don't believe it does for this purpose), no CG. I believe the accountant is correct.

Apple's solution does bridge that gap, but if you do any filings, we both agree it starts with an amended 2016 return.

My personal opinion is as long as the tax treatment was proper and reported, ignore the 5500 issue. I might consider amending the the final return, accounting for this as a receivable/payable for 2016, but filing a 2018 return is just going to confuse everyone.

I agree with PP, distribute the portion of the loan attributable to the excess.

Coverage passes as employee is statutorily excluded, you have an owner-only plan that files the EZ.

No, the language in another plan, whether qualified or non-qualified (as is your example) cannot override the language in the 401(k) plan with respect how it should operate. For example, an employment agreement some new employee signs says he will be immediately eligible for the retirement plan while the plan document says there is a one year wait - which do you follow? The plan document. If this employer wants to exclude that income from the 401(k) plan compensation definition then it must do so by modifying that plan document, not some other plan document.

And for S-corp shareholders it has to be some basis of W-2, cannot include any K-1.

Here is a detailed resource plus a handy chart is attached. https://www.irs.gov/pub/irs-tege/2013cpe_compensation.pdf Compensation Definitions.pdf

For an employee with a break in service I believe you ignore the break, so you'd count years 1, 2 and 4. I don't know if having no profit in year 3 could be considered a break, where you could similar, but I don't see why year 3 can't go into the 3-year average as a zero.

I think you count the aggregated service from all employers as service with all employers at which he worked. I would say he gets match in A based on deferrals to Plan A and match from B based on deferrals to Plan B. Similar to someone switching between an employer's union and non-union plan, the total service counts for both, but you don't duplicate benefits or provide all in one plan unless the plans explicitly provide (more likely in the DB world).

I think so. in your example, I presume, you could do the ABT on either basis as you choose and regardless, one would be on a different basis than how the rate groups are determined - so i conclude that rate groups and ABT need not be determined on the same measurement period basis. Same page? Thanks