EagerToKnow

Does anyone else agree with Kevin C?

Anyone dealt with Roth QPLO? Code 1MB?

Thank you JackS!

Anyone?

Situation: $4,000 payroll from April 1 2019, not deposited until January 10, 2020. Plan year is calendar year, so it requires 2019 and 2020 Form 5330 fillings. Calculated interest: 2019 $310 2020 $34 4975(a) First Tier Excise Tax calculation (entered on Form 5330 line 3a): 2019: $310x15% = $46.50 2020: ($310+$34) x 15% = $51.60. Calculation from Exhibit 4.72.11-6 on https://www.irs.gov/irm/part4/irm_04-072-011#idm139654188128704 4975(b) Second Tier Excise Tax calculation (entered on Form 5330 line 3b? 2019 None 2020: A: 100% of the 2019 Amount of prohibited transaction reported on 2019 filling $310 B: 100% of the 2019 amount of total prohibited transaction $4,000 + applicable Interest $310: for the total of $4,310? Which would make total excise tax due with 2020 filling of either ($310 + $51.60) = $361.60 or ($4,310+$51.60) = $4,361.60? Thanks for your help!

I really appreciate your detailed response. Below is selected for the EACA at 4%. Participants subject to the Automatic Deferral provisions. The Automatic Deferral provisions apply to Employees who become Participants on or after the effective date of the Automatic Deferral provisions, except as otherwise provided herein. Application to existing Participants. For Employees who became Participants prior to the effective date of the Automatic Deferral provisions: Affirmative Election of at least Automatic Deferral amount. All Participants, except those who have an Affirmative Election in effect on the effective date of the Automatic Deferral provisions that is at least equal to the Automatic Deferral amount and except as otherwise provided below with respect to the escalation of deferral provisions. Therefore, on the effective day of auto enrollment, everyone who's deferrals were under 4% would be bumped up to 4%. Problem: What to do with employees who have dollar deferral election (ex.: $50 each pay period). Auto Escalation: 1% annually up to 8% on the first day of the plan year. Unless selected below, the escalation provisions will not apply to Participants with an Affirmative Election The escalation provisions will apply to Participants with an Affirmative Election of at least 0% of Compensation. Therefore, annually, anyone who is not at 8% would be bumped up by 1%. Yet again, we are not sure what to do with participants with flat dollar deferral elections. Thank you!

We are setting up Auto Enrollment (4%) plan with Auto Escalation (1% annually up to 10%). When we looked at plan demographics we noticed that close to 40% of participants have elected flat dollar deferral elections instead of percentages. How would administrator auto escalate someone with flat dollar deferral election? Here are a few options we have considered. Divide pay period deferrals by the pay period comp and increase the flat dollar amount by calculated 1% if needed. This approach would potentially hurt folks with variable comp through the year, who want to ensure max deferral (402g limit) and not losing any match (match is calculated with per pay period comp). Exclude anyone who has elected flat dollar deferrals from Auto Escalation. Wondering if that would be considered definitely determinable in accordance with Regulation §1.401-1(b)(1)(ii) and uniform for EACA rules. Currently Top choice if prior sentence holds. Only apply Auto Escalation for participants who have not made any affirmative elections. However, that would only limit this entire plan provision to the future new hires, who never make elections. I would like to hear your thoughts and comments. Are there any other approaches you have seen that you would like to share? Thanks!

Thank you all for confirmation. Yes, hard to see it failing Rate group test, but with total annual contribution being so small, it would be nice to avoid additional testing requirements.

Plan has decreasing tiered profit sharing formula based on compensation: 2% of the first 30k in comp 1% of the next 10k in comp 0.5% of the next 25k in comp 0.25% of the next 35k in comp 0.1% of the next 65k in comp Would this require General (Rate Group Test)? Thanks!