digger

If the plan has a last day requirement, then he's not entitled to a profit sharing allocation until the end of the year. That's easy enough to amend out.

Could you do -11(g) amendments and change the pay credit and allocation rate for the affected NHCEs on pay received in 2020 so amounts match the original %s on all pay?

There's also Publication 3998 from the IRS. Our tax dollars have paid for a few useful things.

Thank you. New notice is going out now!

Employer handed out a 2021 safe harbor match notice early and now wants to change to a 3% SHNEC for 2021. Are they obligated to the 2021 SH Match because of the notice, or can we get a new notice out by tomorrow and change that?

What to do for a terminating plan? Can I lift the language from the 2009 amendment and change the dates, and call it good faith?

An Eligible Retirement Plan refers to the definition in 402(c)(8)(B), which includes a qualified trust. It appears that as long as a DB participant is otherwise eligible for a distribution, up to $100,000 of that distribution can be treated as a CRD. sec, 2202 (a)(4)(C) 4-16-2020 addition: The published analyses are either ignoring the question or saying DB plans aren't included. Who am I to argue? However, I agree with Larry Starr that the plan perhaps cannot treat the distribution as a CRD but the participant may do so on his tax return. (someday I'll learn how to insert links and stuff for reference)

It looks like everyone has distanced themselves from your post Seem to me that it's two payments because of the 1099-R reporting. The ADP refund will be taxable in 2020 - code 8. If the 402(g) excess deferrals are returned by April 15, that amount is taxable in 2019 - code P.

I'm late to the party, but my reading leads me to believe that Form 8822-B is required under CFR 301.6109-1(d)(ii), as noted in the form's instructions, and it applies to changes in the information submitted to obtain an EIN. We generally don't have that information to even know whether anything has changed. The IRS website page linked below mentions the 8822-B but does not mention filing due dates or penalties. Page was updated 1/16/2020. https://www.irs.gov/businesses/small-businesses-self-employed/responsible-parties-and-nominees

For the minimum calculation, the change in value due to the bump in AMC is essentially spread over 7 years as an amortization base. For the maximum calculation, it's included in the Funding Target and the 50% cushion amount so your maximum should be more than you could get using any kind of change in method for the minimum (even if that were possible). The client will be able to fund the full value of the increase in Year 2 , even if the minimum funding calc's don't reflect that.

If anyone is still wondering, IRS 2020 Program Letter says opinion letters will be issued by June 30, 2020. See page 8. https://www.irs.gov/pub/irs-tege/tege-fy2020-program-letter.pdf

For us, using PenChecks is the most cost-efficient way to handle 1099-R reporting, required for any distribution of $10 or more.

Great advice. Thanks, everyone.

I have a client with a safe harbor match only plan, which excludes union employees. The union plan is DB. Employer now wants to include only one of their 14 union employees in the 401k plan. All union employees are NHCEs. Assuming the CBA allows it, and aside from creating dissention in the ranks, is this ok?

We've had a couple of EZ filers successfully use the "reasonable cause" method recently. Rev Proc 2015-32 specifically says that this option is still available to EZ filers, with the caveat that if the reason is not accepted, penalty relief is not available. I don't think I'd try it on a filing other than an EZ, even though the reasonable cause exception is still in Code section 6652(c)(5).

never mind - Simple, not SIMPLE.

What does the 5500 look like for the plan's last year as a 401(k)?

Thanks for the analysis. The day's wasted if you don't learn something!

If the participant returns the $160,000 to the plan, can't the plan just request refund of the $40,000 withholding on Form 945-X?

Assuming the employee never had a vested benefit, how many Break-in-Service years do you need to disregard prior service? Is there anything that says there also needs to be a separation from service?

CuseFan, I'm with you. The IRS has determined that a 3% allocation in a 401k plan is enough to buy your way out of the ADP test and meet the top-heavy minimum. That seems pretty significant. How can they say a comparable 3% allocation in a CB plan isn't even "meaningful"? Well, they can say it, but I'd definitely argue the point. BTW, the Relius volume submitter language refers to "Participants who receive meaningful benefits within the meaning of Code Sec. 401(a)(26)" - no mention of a minimum .5% accrual.

If my 2018 report disclosure of method and assumptions says expected compensation is last year's comp (with or without a scale) and the business owner reports he is paying himself less this year based on business projections, can I suddenly assume the scale is negative 50%?

I, too, always thought of compensation as an assumption. But then IRS issued Rev Proc 2017-57 describing the procedure to request approval of a change in funding method. In that RP, IRS describes a change in certain "data elements" as a method change requiring approval. This is one of their examples of a change in method requiring approval: Example 5 – The plan year is the calendar year and the valuation date is January 1. For the prior plan year, the data element used to project future compensation was the actual annual compensation (as reported on Form W-2, "Wage and Tax Statement"), for the plan year preceding the valuation date. For the current plan year, the data element used to project future compensation is the monthly rate of pay as of the valuation date.

Thanks so much, both of you. I think I'll be sending a copy of the DOL fiduciary responsibility booklet to them now and then to pass on to new officers/trustees.

Sponsor wants to name the CEO and highest HR position as plan trustees, rather than naming names. They say they have incoming officers sign to accept trusteeship and notify departing officers of their removal as trustee. Is this ok? I wouldn't think these officers would change very often, and they're going through the right steps anyway, so I'm not sure of their motivation to do it this way.