ERISAGal

Is there an additional requirement that if an Owner who is LESS than a 5% owner, over age 70 1/2 and is still employed MUST take RMDs because they are in a "position of control" with the Plan Sponsor/Employer? The TPA is stating this to our client, but I haven't been able to easily find anything requirement this by the IRS. Perhaps it's a Plan Document requirement? Trying to find an answer for the Owner/Employee. They actually serve as the "Chairman of the Board". Not really sure how much "control" they really have. Your help is greatly appreciated!

If a participant did not defer and did not receive a safe harbor match, does the fact that the non-elective profit sharing contribution being allocated based on permitted disparity negate it being able to be used in meeting the 3% Top Heavy minimum requirement for this participant? I thought I read something about permitted disparity causing a problem with Safe Harbor plans that allocate a profit sharing contribution based on this method. Thanks!

Have a Safe Harbor 401k plan that allocates a Safe Harbor enhanced match formula (100% up to 4% deferred). They also allocate a non-elective profit sharing contribution based on integration/permitted disparity and the plan falls into the Top Heavy threshold. The plan has a 1000 hours of service and last day requirement for receiving an allocation of the additional profit sharing contribution. EX-Have a participant who is NOT eligible for the allocation of the profit sharing due to the service, but is receiving the Safe Harbor Match because they deferred. Would this participant also have to receive a Top Heavy minimum allocation or would their Safe Harbor Match satisfy that requirement?

Assisting a 403(b) client with a question regarding whether to perform match true-up calculations and what may or may not need to be done for prior years. Their Recordkeeper had prepared their plan document and the language is not as clear as one would prefer (Adoption Agreement or Basic Plan and Trust). The client has been paying in their employer match on a payroll basis each year. This year during the plan audit, it was determined that the plan document language bases the match calculation on Plan Year compensation and the Recordkeeper indicated that a true-up would be needed. This had never been mentioned to the client in the past either by the recordkeeper, prior plan auditor or their TPA that was hired on a limited-scope basis to perform certain additional tests that were not handled by the recordkeeper. The client is trying to determine if they do have to calculate and pay in the required true-up match, how will this impact all of the prior plan years that they have NOT done this or is there any other options available for correcting this problem. Before getting ERISA counsel involved, I wanted to explore all possible options for the client. Everyone's comments are greatly appreciated! Gotta love the Friday projects....

Thanks everyone! Yes, it is a very large plan with LOTS of employees over the comp limit. Just confirming that although it's deposited on a payroll basis the regs require the Safe Harbor 3% Non-Elective Contribution to be "calculated" annually. Agree that it SHOULD come out ok, but it's these "fun" plans where it's not always the case....

For a plan that chooses to pay in the Safe Harbor 3% Non-Elective contribution on a payroll basis, are they required to "calculate" the contribution based on annual compensation and thus need to do a "true-up" each year? I seem to be finding evidence that for the Safe Harbor Matching contribution you can choose to calculate and deposit it based on a payroll basis (as long as it's chosen/defined in the plan document). I've read the Treas. Reg. 1.401(k)-3(c)(5)(ii). I would like to confirm that for the Safe Harbor 3% Non-Elective Contribution the IRS currently does not allow an employer to calculate it on a per payroll basis? Thanks for your help!