JackS

You can restate the existing plan or set up a new plan and then merge them (or operate them concurrently). Either way, you cannot distribute the deferrals.

The taxation will be reported on the Form 1099-R. The K-1's don't need to be amended. Plan Comp does not change because the 401k deduction does not affect the partner's plan compensation in the first place, just their taxable income. Yes to the 5330.

A plan sponsor provides pet insurance to it's employees as a benefit. The employer pays the premiums and the employees are taxed on them. Their plan excludes "Fringe Benefits" from the definition of plan compensation. Does anyone know if this "income" should be excluded form plan comp or included in plan comp?

My only thoughts are absurd. Have the employer buy another company that is not TH? Have the Key's contribute to IRA's for 2018 and rollover the funds to the Plan. Realistically, they probably already deferred and are out of luck. I don't think you are missing anything.

Both matches have to meet the ACP requirements in order to exempt from the ACP test. Your ADP SH match does not necessarily meet the ACP SH requirements (e.g. 100% of 8% would satisfy the ADP SH but would NOT satisfy the ACP SH). As long as both the SHMC and the Disc Mc meet the requirements separately (not added together), the plan is exempt from the ACP test for that year. I don't think there is anything to "combine" unless you do have to apply the ACP test.

I don't always lose (or win) this argument but I always present it to my clients. In short, if you are a Trustee, you have Fiduciary duties. If you take a loan, you are responsible for paying it back. Now, you cannot force a participant to pay back a loan but you can force yourself to. If you are not willing to hold yourself to the fiduciary duties you accepted, this could be a sign of a fiduciary breach. Would it, in and of itself, cause any problems? Probably not. But in an audit where there are other issues, could it be used as additional evidence that you as a Fiduciary are not discharging your duties adequately? I don't know, go ask an attorney or the IRS but I am not going to tell my clients that there are no possible ramifications. I am going to tell them they should try to figure it out and pay off the loan. What if you make your employees sign a payroll deduction agreement but you are taking guaranteed payments so you cannot? No discrimination here? Here is a scenario. Owner of a business takes a loan from his plan on July 1, 2018 and amortizes it quarterly such that a payment is due October 1. They do not make the October 1 loan payment. The cure period expires March 31, 2019. They have to recognize this as taxable distribution in 2019 and pay their taxes by April 15, 2020. The client just took a distribution from the plan, gave themselves 9 months to make payment and 21 1/2 months before they have to come up with the taxes. That sure beats taking a $50,000 distribution (if available) and having $10,000 withheld today doesn't it? Now, assuming they didn't take the loan never intending to pay it back, isn't this accurate? So if the client needs $ and wants to take it from the plan, isn't it better to do this knowing that they will try to make the payments but if they don't, they just avoided the withholding and deferred the taxation. No possible ramifications?

A Trustee who refuses to repay his own loan....you are saying there are no possible consequences? That there is no prudent reason to encourage them to do so?

Downside? Just the normal stuff. You'd need to make sure the recordkeeper can handle it but the participant probably won't be able to submit the contribution so the employer - or the computer system will have to do it. You'll have to deal with it when the ACH fails - either for lack of funds or because the participant decides they can't or don't feel like making the payment. You will get to listen to a unique and riveting story each time this happens and tall tales of how it all was just a big mistake and will get taken care of Friday...at the latest next Monday. They will want to refinance it. Your plan will become their personal bank account. If they have a large amount of money and you want to keep those assets in the plan, maybe it's worth it. Otherwise, if they want any money from the plan, make them take a lump sum distribution and get them out.

If this participant is also a Trustee, I would argue, at least to the client, that they are required to repay the loan.

If he is not eligible for either plan, you do not have to aggregate and he can provide (almost) whatever he wants to whichever employees he chooses.

Yes it's allowed. You can make this change mid year as long as you provide an updated SH notice and satisfy the election opportunity conditions. See Notice 2016-16 for details on mid-year changes to safe harbor plans Notice 2016-16.pdf

This language is in the Corbel Document 7.6 LOANS TO PARTICIPANTS ....For purposes of this Section, the term Participant shall include any Eligible Employee who is not yet a Participant, if, pursuant to the Adoption Agreement, "rollovers" are permitted to be accepted from Eligible Employees. I think in absence of specific plan language, the plan administrator could interpret it either way. You would probably want to clarify it in the plan loan policy.

Never have children...sorry, I know that wasn't helpful. Good luck.

FtW found numerous problems with their pre-approved PPA doc after the approval letter was issued. They went back to the IRS and amended their PPA restatement. If the clients doc was done before a certain date, there is a separate amendment related to these changes that applies. After a certain date, the changes are incorporated into the AA. There is a PPA restatement (AA BPD, etc) either way.

I do realize that. I wanted to know where to send people who want one and won't listen to reason. I don't understand your last statement. I am not sure why a TPA would sponsor a prototype SEP. They would just use a PSP. Anyway, add US Bank to the list. The advisor came up with the Prototype SEP doc.

I think Mike's original response is correct but I am curious, what VS document are you using that does not have gateway language in it?

Does anyone k now where one could find a Prototype SEP? I cannot find one.

Thank you all!

I know you cannot amend the allocation methodology once someone has satisfied the accrual requirements for a particular year. In this case, there is a 1000 hour requirement for accrual of the NE. I thought there was guidance issued by the IRS about 6 - 8 year ago where they specified that if the amendment was done by May 15th (Calendar year plan), the amendment was permissible even if someone had worked more than 1000 hours. I cannot find anything to support this now. Does this sound familiar to anyone?