C. B. Zeller

I'm in favor of the change. Until just now I wasn't aware it was an option to log in with your display name. Regarding changing emails, it could be a problem if you no longer have access to the old email account and you need to reset your password. Does the system support changing your email for login purposes? Or can a backup email be added?

Maybe contact the ABCD. This is definitely a violation of all sorts of codes of conduct.

If the receiver is a Qualified Termination Administrator, then they have fiduciary protection against any breaches that occurred prior to their becoming QTA under the final abandoned plan regulations. The former shareholders, to the extent that they failed to execute their fiduciary duties, would still be liable.

It should still come out right, since deferrals for self-employed individuals are deducted on their Form 1040 Schedule 1, not on their Schedule C or K-1, but the income from Schedule C or K-1 (before the deferral) is used to determine the self-employment tax.

Deferrals aren't normally exempt from FICA/FUTA taxes so any amount that would be taxable should still have been taxable during the year in which they were mistakenly withheld. I will admit I am not thoroughly versed in the complexities of self-employment tax issues beyond the pension arena, so there may be some subtlety I am missing here.

Sure, you can use any of the 415 safe harbor definitions of comp. If the question is, can you use the shareholder's passthrough income reported on their Schedule K-1, that answer is NO.

The participant is misunderstanding what the IRS is saying. Not surprising, since it is kind of a subtle distinction. This means that the employer is not required to look into the employee's personal finances - bank statements, investment accounts, credit cards, etc. to see if they have some other means available to them to satisfy the hardship. It does not mean that the employee is not required to substantiate the existence of the hardship. The IRS has this page about hardship substantiation: https://www.irs.gov/retirement-plans/its-up-to-plan-sponsors-to-track-loans-hardship-distributions Although summary substantiation is permitted, the plan administrator is well within their rights to use the traditional substantiation method. The participant has to comply with the plan administrator's procedures if they want to request a hardship withdrawal from the plan.

First off, the SECURE Act changed the RMD age to 72, not 72½. Second, please try to use punctuation. It will make your question easier to read for the rest of us. The advisor may be correct. The required beginning date for a plan participant who is not a 5% owner is the later of age 72 or termination of employment. Termination of the plan does not require RMDs to commence for non-owners even if they are past age 72. However you said that there is an acquisition going on here. If it is was an asset sale, then the employees may in fact have experienced a termination of employment. More facts are needed. Regardless, if a participant who is age 72 takes a total distribution as a rollover, and then terminates later in the year, part of their distribution retroactively becomes not eligible for rollover, which could cause problems. Thus it may be advisable to have participants who are over age 72 take a portion of their distribution in cash, just in case. They should also keep in mind that if they roll over their distribution to an IRA, they will be required to commence RMDs regardless of whether they have terminated employment.

Yes. 1.401(k)-1(a)(3)(i) includes in the definition of a qualified cash or deferred election, an election to have the employer provide cash "or some other taxable benefit" versus a plan contribution. I'm sort of curious what this "gift" is exactly, if not cash. I'm trying to imagine what sort of gift I would want my employer giving me. A gold watch? A trip to Hawaii?

It's a 415 violation, so code E. From the instructions to the 1099-R:

Correct. The non-elective contribution portion of the plan needs to satisfy coverage. If the only non-elective contribution is the top heavy minimum, then yes. Your result seems unusual though. The only way I could see to end up with that ratio would be if there were a large number of non-key HCEs who have to receive a top heavy minimum, and also a large number of non-HCEs who terminated and therefore don't get a top heavy minimum, but also worked at least 500 hours and therefore can't be excluded from the coverage test. Does that describe the situation? Don't forget that the SH match contributions count towards the top heavy minimum. If you have any employees who are eligible for SH match and are deferring at least 3%, they would get enough of a match to satisfy the top heavy minimum and wouldn't need to get a non-elective contribution at all. You can also disaggregate otherwise excludable employees from the coverage test, but since those will mostly be non-HCEs who have to get a top heavy minimum as a non-elective contribution (since they aren't eligible for safe harbor), it would probably hurt you more than it would help. Check the plan document. Many plans will include a "fail safe" provision that automatically adds people back in to satisfy a failing coverage test. If your plan contains that provision, then you must follow it. If it does not, then you might have to adopt a 1.401(a)(4)-11(g) corrective amendment to grant allocations to employees who wouldn't have otherwise been eligible for them.

And make sure you get paid in advance!

Is there anything in the document that says withdrawals are limited to one per year?

My understanding of the anti-abuse provision is that it exists to give the IRS the power to disqualify plans which are discovered to be abusive under audit, even if the situation does not directly violate the letter of any law or regulation. In other words, it is usually impossible to determine if you are violating the rule, until the IRS tells you that you have violated it. The sole example in 1.414(c)-5(g) that talks about the anti-abuse provision describes a situation in which one organization has the power to select the slate of nominees from which the directors of another organization will be chosen. In your situation, the directors of one organization apparently have the authority to set the compensation for employees of another organization. I do not know if that rises to the same level as the case in the example. If you want a more authoritative opinion, I recommend you contact Derrin Watson. He (literally) wrote the book on this topic.

You might be right, I just don't encounter it often (or ever) and my mind immediately goes to questions of nondiscrimination, BRFs, and so on.

It might be ok if the employer is merely collecting the fee from the plan and then immediately turning around and paying it to a service provider. It would be much cleaner of course if the plan could pay the service provider directly, but it is not necessarily a PT for the employer to be in the middle of that transaction. I am also concerned that you only asked about terminated participants. Do active participants not get charged this fee? I don't think you can different fee structures for active and terminated participants.

Most payroll systems can track the 402(g) limit, even between pre-tax and Roth, so I don't see how this would be much different conceptually. Of course, what payroll providers' systems should conceptually be capable of and what they are in fact capable of are rarely the same thing.

The plan document probably says that anyone who is eligible for deferrals is eligible for safe harbor. If that's the case, and the deferral feature was first effective after the participant's date of termination, then I don't believe they would be eligible for safe harbor, as they were never eligible for deferrals. If the participant is actually entitled to some contributions under the plan, then yes, they need to receive an SPD as they need to be notified of their rights under the plan. No one is required to receive a safe harbor notice for a safe harbor non-elective plan any more.

I've never come across this situation in person, but I what I would probably do would be to just tell the participant that the maximum they can put into the plan between their 401(k) and voluntary contributions is $58,000, and if they go over that, they are going to have problems. Let them figure out how many pay periods are left in the year and how much they can contribute out of each paycheck and to what source.

I don't think you can disaggregate otherwise excludable employees on any basis other than the maximum age and service conditions of 410(a). Your disaggregated plans for deferrals will be those with less than 1 year of service (ADP test required), and those with more than 1 year of service (safe harbor). For match your disaggregated plans will be those with more than 3 months but less than 1 year of service (ACP test required), and those with more than 1 year of service (safe harbor).

Prior discussion on the topic:

If you give the employee the choice to receive the amount in cash, or have it contributed to the plan, that's a CODA.

Besides adoption, it's also possible that an employee might be pregnant and not show it. Not everyone carries a pregnancy the same way. Your female employee might also be married to a woman who is the one who gave birth. If you've got two employees, one male and one female, and they both come in and request a QBAD with identical self-certifications in hand, and you approve the man's request (because you have no reason to deny it) but deny the woman's request (or demand additional substantiation), merely because you think she hasn't looked pregnant at any time in the last year, then I think you have a sex discrimination issue. I know we usually think that everyone knows everyone else's business in a small office environment, and sometimes that is the case, but not always. Unless the employee wants to add the newborn or adopted child to their employer-sponsored benefits, there's no reason they would even need to inform HR. Finally there is the epistemological question of what it means to have "actual knowledge."

Notice 2020-68, Q&A D-12

Probably can't do #2 either, except with respect to any contributions that were actually for the 2020 plan year. The rule under 404(a)(6) is that the contributions can be deducted in the prior year if there were made "on behalf of" the prior year and before the tax filing deadline for that year. Most likely need to deduct them all in 2021. If it exceeds the deduction limit for 2021, might need to carry forward the excess and deduct it in 2022.