Jakyasar

Can you 11-g contributions for the terminated employees? I am assuming that the plan passes the ratio test under 410(b) but not necessarily ABPT? Failing ABPT usually may require that 401(a)(4) passes utilizing ratio groups. Have you tried accrued-to-date method as well? How about restructuring? Just thinking out loud with a fried brain myself.

Hi Looking at a takeover PS plan. The formula is cross-tested and has 3 groupings (no everyone in their own group option), each identified for a specific job category. Sponsor adopts a resolution each year on how to allocate the contribution. Sponsor hired a 4th category employee, became eligible for 2019 but does not fit in any of the categories. It is not an excluded class job category. How to allocate for this new job category, may be 11-g?? Thank you

Thank you for your responses. I miswrote when I said SH match, meant NESH, sorry for the confusion. It is very clear only NESH @ minimum 3%. So the corrected question I have is, what happens to the discretionary match contribution deposited to each person's account for the first 6 months? Just tested for ACP? And this would be in addition to the full year NESH, correct? Regards

Thank you for the response. Looks like only 3% non-elective can be added, is that correct? What happens with: "How will the plan satisfy SH for 2020 and is there any testing that needs to be done? How are the salaries considered for the first part of the year and second part of the year? Assume that the discretionary match is made at the time the deferrals. So for the first 6 months, they made the match which is way less than the actual SH match amount would have been."

I am sure this was discussed and it is a very basic question: My situation is reverse of what is going on, sponsor wants to add SH rather than eliminating it. Existing 401k plan with deferral and discretionary match options. they provide 10% of deferral as match. Plan consistently fails ADP for the past 3 years. Sponsor wants to proceed with a safe harbor match, let's say effective 7/1/2020, standard 3% of the first 100% plus 50%..... How will the plan satisfy SH for 2020 and is there any testing that needs to be done? How are the salaries considered for the first part of the year and second part of the year? Assume that the discretionary match is made at the time the deferrals. So for the first 6 months, they made the match which is way less than the actual SH match amount would have been. Thank you

Fantastic and really appreciate your time and explanation. To Mike as well.

Mike, agree with you but not trusting the balances necessarily for acc-to-date. Will think about the restructuring. No OE option. It a 3 participant plan 2 HCE and 1 NHCE. C.B. Zeller, is the following the language you are talking about? It is from the DC plan. As I am combining both plans and the gateway is based on combined plan requirements, would I still be able to SCP for 2018? Thank you both for your comments. 3.10 Minimum Allocation Gateway. If the Employer elects to satisfy the non‐discrimination rules with respect to contributions or benefits by providing the minimum allocation gateway, each NHCE who (1) is a Participant in this Plan, (2) receives an allocation of Non‐Elective Contributions and/or QNECs, and (3) is not an Otherwise Excludable Participant must have an allocation rate not less than the lesser of 5% or one‐third of the allocation rate of the HCE with the highest allocation rate. An allocation rate is the amount of contribution allocated to an Employee for a year, expressed as a percentage of Compensation. If the requirements of Regulation §1.401(a)(4)‐9 apply to the Plan, the gateway will be determined in accordance with Regulation §1.401(a)(4)‐ 9(b)(2)(v)(D). Compensation under this paragraph will be limited to amounts a Participant received on or after his entry date with respect to the Non‐Safe Harbor Non‐Elective Contribution Component of the Plan.

Much appreciated and thank you

Ok, no self correction, how is it corrected then, VCP? Any other way? Thank you

Hi all Taking over a combo plan for 2019. Received information on 2018 so that I can check the 2018 test and based on my calculations, does not pass. I have questioned this and waiting for an explanation. However, if there is a failure on 401a4, is this a self correction and if it is where can I find it? May be late in the day, just cannot find it. The failure is to provide the minimum gateway. It would have been thru additional profit sharing allocation as DB allocation is set. If the gateway was provided correctly, 401(a)(4) would have passed with no issues. Thank you

Hi all PS plan is utilized as a QRP and has both the QRP assets as well as PS assets. Let's say balance are 50/50. All assets are comingled and pooled so no individual accounts. Clients pays x amount annual fees from the plan assets. Can the fee be split 50/50 i.e. 50% deducted from the QRP balances and 50% deducted from the PS balances? Thank you

Correct a w-2 employee. W-2 box 1 is 2,200 and box 5 is 27,200, the full 25,000 already reflected as deferral for 2019 so no retroactive deferrals. For Lou S, do you agree with Mike Preston's analysis as well? Thank you both Be safe

Lou S. Following up on this as I was just informed of what they did without me knowing. This calculation always puzzles me: "$19,000 deferral + $6,800 psp = $25,800 < $27,200 100% of pay so you are OK for 415." Does that mean they can now add the 2019 catch up of $6,000 thus bringing the total to $31,800? If not correct, what is the maximum deposit they can have for 2019 between deferral, catchup and profit sharing? Thank you

Hi Is anyone aware if the IRS office in UT open and/or accepting/processing 5500-EZ's? I have a few clients who still file paper copies and I want to have them switch to electronic filings. I do not want the forms sit and not processed for months (hopefully will not be the case but...) Thank you

Thank you for reminding me.

For the DB/CB plans, I do not believe AFTAP certifications are extended, correct? If the 5500 was due 5/15, AFTAP date would be 4/30 but if the 5500 filing is extended to 7/15, I do not see AFTAP being extended to 6/30.

Just saw the notice 2020-23, relating to rev-proc 2018-58 #40. Am I correct to assume that the 4/15/2020 extended line for the 5500/PBGC filing has been extended to 7/15/2020? Thank you

No automatic extension for 5500 Series. ASPPA has requested, but no news yet. This is what I was told

Hi Looking at a 2018 k-1 for a takeover plan (partnership and each partner is making the same amount). I am not sure if I am providing enough information but something does not seem right, at least to me. K-1 line 14 is 125,000 (same as line 1 - ordinary business income) Partner pension deduction is 25,000 Partner employee portion deduction is 1,000 Partner health insurance deduction 15,000 The amount subject to self employment tax was calculated based on 85,000 (125k less 25k less 15k) My approach to calculate the amount subject to self employment tax would be 124,000 (125k less1k - employee portion) What am I missing here? Your comments are appreciated. Thank you

Of course, the longer you wait for the funding, the more you will have to put in

You cannot retroactively freeze a plan. Participants will not accrue a benefit anyway, assuming that the required service provisions for accrual within the plan document are not generous. Do not forget to put in the old and the new formula as well.

I am still going to push the client to file on time. Until I see something in writing, not quite sure want to risk it. There is always DVFC but...

Hi Have a plan that has 4/15/2020 as the extended 5500/PBGC/SSA filing. Unless I missed it, so far there is no extension, is that correct? Thank you and be safe.

In response to Mr. Preston's comment. I was told that the client did it without consulting with anyone and as far as I know did not have a TPA either (the document possibly done thru a broker). Their CPA did not find this out till last week. I am guessing slipped thru the cracks bcz they did not have to file any 5500 forms. Hopefully will put things in order once I take it over. Be safe.

Thank you for the response, will advise them not to do anything for 2020 until they talk to me first and will also have them deposit 20k less. To confirm, these is no way out of the excise tax for 2019, correct?