hch4cpa

Does a Plan need to actually make amendment the Plan Document to eliminate the requirement that elective deferrals be put on hold for 6 months?

"Limitations On Safe Harbor Contributions - The Employer elects to match Safe Harbor Contributions on an annual basis".

Match is made and contributed per payroll period. The "Compensation Computation Period" is the entire Plan Year., per the plan document though.

"Compensation paid during a Plan Year while a Participant" - So annual, I presume? I guess this would mean the match should be applied, correct?

Plan is 4% safe harbor and definition of compensation is W-2 income with all pre-tax contributions included. Plan does not specify any exclusions from compensation. Plan provides participant the option to elect/amend contribution to defer up to 100% of bonuses. From a practical stand point - Even if the participant does not elect to have a deferral taken from the bonus amount, should a 4% safe harbor match still be made?

Thanks for the insight. So this is the best option for getting the HCE's to $61,000 and keeping the NHCE profit sharing as low as possible?

I am the CPA for a group of Doctor's who have a Cross Tested 401(k) & Profit Sharing Plan. In reviewing the Plan valuation report / Form 5500, I am not 100% sure that the TPA is doing this right, based on my limited understanding. 3 Doctors, all are HCE with income in excess of $275,000 6 NHCEs (Ages anywhere from 20-70, but most younger) All eligible employees are participating, and the doctor's are contributing the $18,500 plus catch up. Everyone gets a basic Safe Harbor match - 100% up to first 3% of wages, 50% of the next 2% - for a 4% Safe Harbor Match. The HCE are getting a profit sharing contribution of $25,500 (9.27%) to get them to the max total contribution of $61,000.00 The NHCE simply get an across the board 3.09% (1/3 of 9.27%) profit sharing contribution. Is this how the Gateway Allocation test is supposed to work? My information seems to suggest that the Safe Harbor match goes in to the Gateway Allocation %....so if the HCE's are getting 4.00% + 9.27% = 13.27%, than the NHCE should only get a total of 4.42%.

If a Employer adopts a Prototype Plan sponsored by its Third Party Administrator, can the Plan continue to use the Prototype Plan in the event the relationship with the sponsoring TPA is terminated? The Prototype Document in question contains the following wording - "The employer may discontinue its participation in this Prototype Plan effective upon sixty (60) days written notice to the Prototype Plan Sponsor. In such event the Employer shall, prior to the effective date thereof, amend the Plan to eliminate any reference to this Prototype" Would switching the Plan's TPA likely trigger "discontinuance" in the Prototype Plan?