Barbara

I have a 403(b) plan with a 1/31 year end. HCEs are excluded from the fixed matching contribution formula, but after performing the ACP test, it appears that HCEs could be allocated a small matching contribution and the tests would still pass. The Employer wants to amend the plan to allow such discretionary matching Employer contributions which would apply to HCEs for the Plan Year Ending 1/31/21, as well as a true up provision for the fixed matching contributions that are already in the document that would only apply to NHCEs. Does this seem okay if the Employer signs the amendment before April 15th?

There are many TPAs in the Valley who can help you. You can hire one of those TPAs, they will take over the plan, and then you can roll over the TD Ameritrade assets into it. I can help you if you don't find anyone else; I'm in LA.

I have several terminating calendar year 401k plans where the termination amendment is dated in December, 2020 but funds have not been paid out yet. What effective date should I use for the Cycle 3 restatement? Should I use August 1, 2020 or a later date?

Actually, i have several triple stacked match plans where there is first a SH Match, then a fixed $ for $ up to 4% match, and finally a discretionary match to get the business owner up to the maximum. Obviously this only works when none or few other employees elects to defer. But we don't have conditions on the fixed match in this case.

and what about delaying DB required deposits beyond 9/15?

Is anyone aware of any requests to the IRS to delay minimum funding requirements for DB Plans?

I submitted a filing last October, and IRS has yet to assign it, FWIW. I agree with Belgarath.

Thanks to both John and Larry! This helps a lot.....

A plan has a tiered match formula. Each participant is eligible for one of the tiers (30%, 40%, 50%, or 75%). We understand we have to do a Benefits, Rights, and Features coverage test on each tier of match. Our understanding is that anyone who is benefiting at the same or greater level of match as the tier being tested, is deemed to be benefiting in that tier (i.e. if you get a 50% match, you’re considered benefiting in the tests for the 30%, 40%, and 50% tiers). In this plan, only the 30% tier passes. As would be expected, the 75% tier fails the worst. We are going to bump up an additional 17 participants from their current level of match to 75% to pass coverage. We believe that these 17 participants, who are now benefiting at the 75% level, should be considered as benefiting in all the lower tiers, which would make those tiers pass as well. However, the provider doing their BRF testing believes that different participants must be used to make each tier pass; i.e. even if someone was bumped up from 30% to 75%, you would still not consider them benefiting in the 40% and 50% tiers. What do you think? Can you find anything in the regs (or elsewhere) that addresses this situation?

I submitted under VCP last August and have been following up. The local IRS office told me they we just now getting to submissions filed last June/July.

I've used it several times without an issue. never got anything back from IRS either.

I don't think we qualified for the EZ, because the two owners weren't married. (But I had thought they were, which is why I prepared the -EZ.) Just trying to avoid going through DFVC.....

I wasn't required to file because assets never reached $100k, let alone $250k.

Thank you, CB Zeller.

This is to CB Zeller - since I never was required to file at all in the first place, I don't see why I'd file under DFVC. What does the group think if i just started filing Forms 5500-SF for 2018 and don't change 2018? BTW, this will always be a 2-person plan with no technical "employees", it's just the two owners refuse to get married for whatever reasons they have!

I have a slightly different question: an S-corp is owned 50-50 by two owners, whom I originally believed to be husband and wife. Now I learned that they aren't married. Their 401k Plan was effective in 2016, but assets are still < $100k (and 100% of the assets are in one owner's account; the other never deferred and never received profit sharing.) I have prepared and they have filed, Forms 5500-EZ for 2016 and 2017, although not technically required to file at all. For 2018 I will prepare a Form 5500-SF, since I now know they aren't married. Do I have any choice as to whether I need to go back and amend 2016-2017 to be on a 5500-SF form?.

thanks, all. None of the employees ever worked 1,000 hours.

The idea of splitting the groups into Owners and "Otherwise Excludable" is a very interesting idea...wondering if anyone had ever tried that?

Yes, this was a standardized prototype document. the other employees should have been included because under the controlled group rules, they were all employed by the same Employer.

Facts: I have a non safe harbor 401k plan that's been in effect for 10 years. Initially, the Employer adopted an "owner-only" plan that had no eligibility service or hours requirements, but he also owned another Company, that (surprise!) had employees. While not one of these employees ever worked 1,000 hours in a plan year, they were never excluded under the terms of the original plan document. There are no matching contributions, and the Employer deposited a 25% profit sharing contribution each year into his and his wife's accounts. the profit sharing allocation method is prorata under the terms of the document, and there are no allocation conditions (of course). We had planned to submit under EPCRS, as the violations don't meet the requirements for self-correction. Question: Assuming the ADP of the two HCE owners is 30%, I assume the correction for the "missed deferral opportunity' is 50% of an ADP for NHCEs that will pass the ADP test. That is, do I take 50% of 30% divided by 1.2 to arrive at a correction percent of 12.5%? This seems like a really burdensome correction, especially since I need to give everyone a 25% of pay profit sharing contribution!!! Has anyone tried to use a lower % for correction purposes?

First, the profit sharing contribution is discretionary. Next, there is a 1,000 hours and last day rule in place for that discretionary profit sharing contribution, so i don't believe anyone has accrued a benefit for 2018..

I have a 4% Enhanced Match Safe Harbor Plan where the document provides for a discretionary integrated profit sharing allocation. the 2018 SH Notice just says "refer to the SPD" under the heading of non Safe Harbor Employer contributions. Do you think I can change the 2018 profit sharing contribution to be cross tested so that the two owners can maximize their benefits ?

We have a frozen DB plan where the 25 highest paid restrictions come into play. We understand that participants who are restricted may elect to take a lump sum payment each year equal to the sum of 12 monthly life annuity payments. Question: may these 12 monthly payments aggregated into a lump sum be rolled over to an IRA?

I've had quite a bit of experience reviewing these and fixing them when there was an error in set up. I'm on the West Coast; not sure where your client is located? my direct line is 310-259-0552.

I did all of a TPA Firm's DC plan restatements (and some DB, too) the last go-around. Please let me know what you might need..... Barbara J. Schwartz my email is consultbjs1@gmail.com, and my cell is 310-259-0552.