Jakyasar

401k plan with 3% NESH and integrated PS allocation provisions (last day+1000 hours requirement) The only NHCE terminates during the year with less than 500 hours. 3% NESH is allocated. Plan fails ABPT but passes ratio testing under 410b. As the participant got 3% NESH, cannot be excluded from PS, correct? Gateway is 4.5% i.e. would require 1.5% additional PS allocation, or more to pass 401a4. Anything I am missing here or misrepresenting?

For 2023, I owned over 10% of the company and my daughter was an HCE in the pension plan. Effective 1/1/2024, my son became 100% owner who is also in the plan. For 2024, is my daughter an HCE as I have no longer an ownership?

Looking at a CB/DC combo. Can the LTPT employees be excluded from SH/PS with the following provisions as well as testing/gateway/top heavy? Amend the 401k plan so deferral is 1 year & 500 hours - currently 1000 hours Safe harbor, profit sharing at 1 year and 1000 hours.

The so called gross compensation, which can be different than W-2, may be on the actual payroll records. Also, the plan document must provide how the compensation is to be determined. There are automatic exclusions and inclusions, depending on what option is checked on the plan document.

I am not referring to any CB plan here but thanks anyway.

Hi Corey Thank you for all the extra info but the only thing I was asking is in the hypothetical scenario where in a combo plan, if and only if the DB plan is providing the top heavy, what the percentage would be. Why am I thinking 3% even though it seems to be 2%. Long day, not thinking straight. If this was a DC only then it is 5% where the participant benefits in both plans.

Follow up - participant is in both plans

Hypothetical question: Combo plan DC/DB, top heavy Only DB provides top heavy What is the percentage?

Any takers

Thank you for your comments

I am aware of all that but thank you (dealt with plans buying policies from individuals before but with proper supervision). Unfortunately, I have to deal with insurance in plans, how I envy you

Thanks Bill As suspected, no way other than having a taxable distribution or a loan, plan permitting. I have seen policies bought by the plan for the spouse (not a participant) of the owner as an investment. the insurance agent, a good and trustworthy one, explained to me how it was done and being kosher. Cannot remember the details but seemed like a reasonable thing at that time. The policy was owned by the plan, that was the trick.

Oh, I did but wanted to second guess myself and see what I am missing, if anything, sometimes I ask myself the question but no one answers (if they do then time to check into pension asylum)

I know the answer is no but second guessing because someone is challenging that it can done. I own the LI policy, not my plan and I want to pay with plan assets, the question how can I do that, policy is not owned by the plan What am I missing here?

Thank you both for your comments and thoughts @Paul I, good laugh on the mercy and that they have communicated anything to the employees. Even a better laugh, how they were able to open an account without the document? I have not seen any statements yet but I doubt it is a trust account. I cannot fathom that the legal department of the investment company allowed this. I am not touching this unless they seek a counsel @Peter Gulia I never use a document that is not pre-approved but here, we do not even have one The amounts deposited were based on the proposal provided but do not even know if the census matches or if the employees were informed of any contributions. There is nothing in writing, approved/signed proposal or any kind of resolution, not even a verbal contract or a handshake.

Never a dull moment Company X had a proposal. Did not confirm that they wanted the plan. In the meantime, opened an account in 2024 without a document, made a deposit, deducted for 2023. No 5500 filing, no SB, no AFTAP, do not know if PBGC. Now time for 2024 contributions/deductions. How do you correct this?

A non-spouse inherits an IRA and will pay the taxes. After taxes, can they roll into a Roth IRA? Thanks

New employees only, everyone in there is under age 55 so none will be affected. Attraction for 65/5, I like all necessary provisions to match for combo designs, reduces things to check and test and miss. Thank you both for your comments.

Looking at a combo proposal. DC has age 65 for NRA which I do not like as it should always have "and 5 YOP", my personal opinion. Is it a BRF issue adding "and 5YOP" now? According to the census provided, none of the employees would be affected by this change especially related vesting. Thanks

This is a stupid situation so a stupid question. One lifer, always had under 250k so never filed 5500. DC plan. Terminated the plan, all assets distributed by 12/15/2024. On 12/31/24, 6 cents hit the account and then rolled out on 1/2/2025. So, what to do here, any suggestions? Is there a deminimis for ignoring the 6 cents i.e. just do a first and final return for 2024? or Do a first and final return for 2025? or something else? Cannot get my head around this as this is the first time ever happened.

Thank you, interesting concepts of freezing the dividends. I will discuss with them. All the best

Happens to all of us but possibility of reality is there. Sometimes, it is not the financial advisor's fault that unexpected dividends pop-up. Still do not know what needs to be done?

Hypothetical question. Law/IRS says as long as the account is cleared prior to 3/31/2025, you do not need to restate the DB plan (required amendments aside). Plan DOT 12/31/2024, all assets distributed by 2/28/2025. On 4/2/2025, a dividend shows up in the account, amount not relevant. Rolled out sometime in April/May - not informed timely. Is restatement now required?

Totally agree, just wanted to check if there was anyone with a similar situation. I have already advised for counsel.

Update, they did het k-1s for 2024 but a few thousand only.