C. B. Zeller

Yes, there is a controlled group due to the minor child. There would be a controlled group regardless, since they both have ownership in company 1 the spousal attribution exemption does not apply. Husband is deemed to own 100% of company 1.

1.401(m)-2(a)(5)(iv)

I would advise the plan to hire an attorney. This is outside the scope of most plan administrators' expertise.

We've been using FT William for years and it's worked well for us. It integrates with their distribution tracking system if you use that as well.

So, basically it works like this: Step 1: Determine the participant's top heavy minimum. If they are a participant in the DB plan, and they worked 1000 hours (assuming the DB plan requires 1000 hours to earn an accrual), then their top heavy minimum is 5%. If not, but if they are a participant in the DC plan, and they were employed on the last day of the year, their top heavy minimum is 3%. Step 2: Add up all employer allocations from all sources in the DC plan - safe harbor match, discretionary match, QNECs, whatever they've got. If those together satisfy the top heavy minimum (which might be either 3% or 5%, as determined in step 1), then you are done. Step 3: If the top heavy minimum was not satisfied in step 2, add profit sharing until it is satisfied. Step 4: If the participant has any non-elective allocations (SHNEC, profit sharing (including whatever was added in step 3), DB accrual, etc) then add whatever additional profit sharing is needed to get them to the gateway minimum.

Does the plan document say anything about this unallocated account? They would only be able to self-correct at this point if it is an insignificant failure. I can't tell you if the failure is significant or not based on the info provided. If you believe the failure is eligible for self-correction, then the best way to correct would be to put the plan in the position it would have been in had the failure not occurred. In this case that would probably mean allocating the assets to the participant accounts on a year by year basis, or whatever the plan document says was supposed to happen. If you want to try to do something different, like allocating based on current account balances, then VCP is the safest bet.

Huh? What does "he participates only in the dc plan and also in both plans" mean? Are you asking what would happen if he is a participant, meaning he met eligibility requirements, but does not defer? He would end up getting the whole gateway. It does seem counter-intuitive: if he defers 3%, he gets a total 3% employer contribution, from the safe harbor match and nothing in profit sharing. If he defers 0, he gets a 5% total employer contribution, since the top heavy minimum gets provided via profit sharing, and then he has to get the whole gateway. If he defers 2.99%, he gets 2.99% safe harbor match, plus an extra 0.01% profit sharing to meet the top heavy minimum, but now he's subject to the gateway so that 0.01% is increased to 5%, and his total employer contribution ends up being 7.99%.

That's good, he won't have to amend his tax returns. But it's still a qualification failure since it violates the 415 limit. Whether it can be self corrected or has to go to VCP depends if it counts as a "significant" failure. Probably it is significant but I am not privy to all the facts and circumstances. There may also be an excise tax on the non-deductible contribution.

I'll give you the benefit of the doubt and try to give you a serious reply. 401(k) participants are overwhelmingly not professional investors. They have regular jobs, families, homes, hobbies and they are not getting paid to manage their portfolio. Probably the last thing they want to in their free time is read reports from the Society of Actuaries or browse Github projects. Research like this will be most useful to them if it can be incorporated into a lifestyle-type fund that is "set and forget" from the participant's perspective to help them achieve better returns in the long term.

You said the participant is excluded from the DB plan. In other words he is not eligible for a benefit accrual in the DB plan for 2020. Therefore he does not have to receive the DB top heavy minimum, which is provided as a 5% contribution in the DC plan. He is a participant in the DC plan and he was employed on the last day of the year, so he does have to receive the DC top heavy minimum, which is a 3% contribution in the DC plan. If the 3% is not satisfied by the safe harbor match, then a profit sharing contribution will have to be made to make up the difference. If he gets any profit sharing at all, then he will have to get the gateway minimum.

The safe harbor match contribution counts towards the top heavy minimum. If his safe harbor contribution was equal to at least 3% of his annual comp then he does not need to receive any PS, assuming coverage is satisfied. If he gets any PS in order to satisfy the top heavy minimum, then he will need to get the gateway unless he is otherwise excludable.

Sure. They could have the partnership adopt a plan and then have the member orgs as additional adopting employers.

You do not have to include them for the gateway test. You do have to include them for the rate group test.

Check rev proc 2019-19 for how to fix errors relating to excess amounts. You are past the end of the 2-year period for self-correction so this is likely VCP territory.

You mean that thing that was cancelled this year? You are probably right and I'm sure thepensionmaven actually meant ASPPA All Access which replaced it. Still I have to wonder if inventing a new abbreviation and the added confusion that comes along with it was worth saving the effort to type "nnual onference." Don't mind me, just grumpy this morning. A plan using the ACP safe harbor is "permitted to" exclude the safe harbor matching contributions when performing the ACP test on voluntary contributions (1.401(m)-2(a)(5)(iv)). Therefore it follows that you are permitted to include them in the test as well.

Disregarding the "how many" question, since as RatherBeGolfing points out, it is basically meaningless, and focusing instead on the real question here - should I quit my job? This is not an easy question, and ultimately only you can decide what to do. There are countless posts on this board complaining about the quality of plans sold by payroll companies, and I think it's clear why - those companies tend to be solely focused on sales volume and not interested in providing their employees with the training or resources they need to do proper administration. There are always going to be stressful times of year in this field, no matter who you work for or what you do. In our firm, sales and ongoing administration are separate departments - for admin, the most stressful time of year is October 15. Different people respond differently to stress, and jobs with this sort of annual cycle are not for everyone. That said, having a good team makes all the difference when you know you are all in it together. I would start sending out resumes if I were in your position. If you haven't updated it recently, do it now; with 7 years experience working on plans you probably have a lot to add. I wouldn't suggest leaving your current job until you have something new lined up though.

Put in a de minimis accrual for the other owner, use 3-year cliff vesting and disregard vesting service prior to the effective date.

The ASG is treated as a single employer for purposes of 401(a)(26). Since plans may not be aggregated for 401(a)(26), any plan put into place would have to cover at least 40% of the ASG members (or if there are only 2 members, both members).

What is AC? Can you link to whatever source you're referring to? A corrective distribution may not be treated as a COVID distribution. From Notice 2020-50:

The fiduciary loses 404(c) protection. There's nothing to fix except to provide the correct disclosures as soon as possible. And hope the participants aren't feeling litigious.

Participants will need to be provided at least 30 days in advance with an updated fee disclosure that explains the fees which may be charged against their account.

I don't see any problem applying the new eligibility requirements to participants who have not yet entered the plan.

Is the plan participant directed? Are you looking to take fees from forfeiture or from participant accounts? Did the participant fee disclosure state that TPA fees might be paid from their accounts?

From the instructions to 5500-EZ (2019, but safe to assume the same will apply for 2020 and 2021): Who Does Not Have To File Form 5500-EZ You do not have to file Form 5500-EZ for the 2019 plan year for a one-participant plan if the total of the plan's assets and the assets of all other one-participant plans maintained by the employer at the end of the 2019 plan year does not exceed $250,000, unless 2019 is the final plan year of the plan. For more information on final plan years, see Final Return, later. Final Return All one-participant plans and all foreign plans should file a return for their final plan year indicating that all assets have been distributed. Check box A(3) if all assets under the plan(s) (including insurance/annuity contracts) have been distributed to the participants and beneficiaries or distributed or transferred to another plan. The final plan year is the year in which distribution of all plan assets is completed

Generally you would need to use the latest normal retirement age under the plan. See the definition of "testing age" in 1.401(a)(4)-12 for more info. Since the DB plan has the earlier NRA, it's going to get messy. You still need to convert the hypothetical pay credit to a benefit accrual at age 62 using the plan's interest crediting rate and definition of actuarial equivalence, but then you will need to normalize that benefit accrual to age 65 using the testing assumptions before you can aggregate it with the EBAR from the DC plan. It will make your life much easier if you can amend the plans to have the same definition of NRA. The DC plan will be easier to amend.