PMZJohn

Found the answer on page 84, which I had skipped over initially because it starts out talking about Safe Harbor Matching, so I had (incorrectly) assumed that the entire paragraph was relating to Safe Harbor Match. "If the employee was not provided the opportunity to elect and make elective deferrals (other than Roth contributions) to a safe harbor § 401(k) plan that uses non-elective contributions to satisfy the safe harbor requirements of § 401(k)(12), then the missed deferral is deemed equal to 3 percent of compensation. In either event, this estimate of the missed deferral replaces the estimate based on the ADP test in a traditional § 401(k) plan." Page 85 looks like it covers Automatic Contributions, SHNEC contributions not made (which is not the case here), and after-tax contributions. Thanks for pointing me to the right answer.

NHCE Participant in a small, successful office where all other employees are HCEs. Eligible for entry into the 401k Plan in July 2022. Terminated employment in October 2022. Participant claims they were never offered the opportunity to participate in 401k. No automatic enrollment, Safe Harbor Non-Elective contribution was made for the participant for the Plan Year. IRS Guidance says correction is a QNEC for 50% of the missed deferral, calculated on ADP of other NHCEs and applied to their compensation from the period of time in which they were excluded. How do I calculate that amount if there are no other NHCEs? Do I use the ADP for the HCEs, since they are the only group? Or is there a Safe Harbor percentage that I would use?

Question is relating to a defined contribution plan. Have a client who passed away in 2018, after his required beginning date. He had a spousal beneficiary who has dutifully been taking RMDs since his passing. Plan Document states that we established her annuity factor in the year that he died, then we reduce the factor by 1 every year moving forward. Question that I can't seem to find an answer to is if and/or how the new life expectancy tables will affect her. On the current tables, her annuity factor at age 60 (when he passed) would be 27.1, but on the old table which the RMDs have been calculated previously, it was 25.2. Do we just continue subtracting 1 from 25.2 for every year that passed, or can we use the new tables, and subtract 1 from 27.1 for each year that has passed, and calculate based on that? Basically, am I going to use 21.2 or 23.1 as my factor for 2022 RMD? Any citations of code would be greatly appreciated, and I looked through Pubs 560 and 575, and can't find an explicit answer. Haven't checked 1-401(a)(9) yet, as I assumed guidance would be forthcoming.

Thanks. I didn't see anything from the IRS, which is why I asked here. It's easy enough to explain to clients that a large government bureaucracy screwed up, especially when you can point out the error. If it ever actually becomes a real issue that requires further action, I'll ask for the correction method they gave.

Have just recently had 3 or 4 different clients who are 12/31 PYE get notices from the IRS stating that their Form 5558 for 02/28/19 has been denied. Extensions were filed for the 12/31/18 PYE for these clients, and their respective 5500s were filed timely. No extension was ever submitted for these clients for a 02/28/19 PYE. Anyone else encountering this, or am I just really lucky?

This is what I was asking. Can the employer adopt an amendment that effectively excludes one of the HCEs? It would appear, based on what Larry said, that the answer is yes. Is that the consensus?

Sorry for not clarifying. 2018 is not at issue. Looking ahead to 2019 and beyond, as one of the partners is retiring this year and another partner is likely to follow in the next few years.

Thank you. That's what I thought. Read 1.401(l)-2 and it made it look like a no go, but I figured it was a good enough question for my first post here

If you have all rank and file employees in their 60s and the owners are in their 40s, what kind of DC Plan would you recommend? I'm genuinely curious if there is a better option I'm not aware of. A new comp plan would cost about 4x as much for the NHCEs

I don't do a lot of these plans, so I'm looking for some guidance. I've got an LLC with 4 partners, all active, and 3 rank and file employees. HCEs are excluded from Safe Harbor, Using permitted disparity because all rank and file are older than 2 of the partners. The oldest partner is retiring, and doesn't want to fund anything for himself. The other 3 partners all want to do the maximum. Is there a way to accommodate this, or is it an all or nothing situation?