FORMER ESQ.

Depends on what you mean by "plan related issues" Is the IC reviewing/consulting on plan design changes (settlor functions) or is the IC helping with gathering data/determining amount of benefits (administration expenses). Settlor functions-no plan assets. Administrative expenses--probably yes. And, as stated above, just because payment can be made for the services, it has to meet one of the PT exemptions (reasonable comp, etc..) You need to be more specific on "plan related issues." See my comments above. If it is a function that the settlor normally engages in, such as making a plan amendment, determining plan design changes, then no. If it part of what is normally considered administrative expenses of the plan, then probably yes. NO. NO. NO. NO. Don't even think about this.

I want to second David Rigby's comment above. Get that information, and you will have the answer.

The correction is to get the notarized consent, and if you cannot get notarized consent, the failure can only be fixed through VCP.

To piggy-back on XTitan's response, the 409A Treasury Regulations allow for a payment of benefits on the termination of a NQDC, but as I recall there are a few requirements that must be met. For example, the termination cannot be proximate to an employer's financial downturn. All of the same types of NQDC of the employer must also be terminated. The payment on account of termination cannot be made (other than otherwise allowed under the plan) within 12 months of termination and must be completed within 24 months. Also, I think there is a restriction on the time period (I think 3 years) during which another NQDC of the same type cannot be established.

I think there are a few reasonable approaches to this. Just make sure that there is a legitimate business reason for the transferring of the employees. If those underlying facts are sound, you should have flexibility on a reasonableness basis.

I am in general agreement with the above. If the plan sponsor in facts decides to make a discretionary contribution on a date X pursuant to a resolution, and that date passes, using plan assets for the earnings portion of the late contribution would be a prohibited transaction.

I want to emphasize (best-case scenario) in your statement. In my opinion, it will be a few years before most employers and employees begin to focus on retirement benefits. Right now, the focus is retaining cash and surviving.

Also, I have not looked at the rest of your question beyond the first two bullet points, so I am reserving any judgement on that.

There is not any spousal attribution if the spouse does not have an ownership interest in the other entity, the spouse does not "participate" in any way in the other entity, and no more than 50% of the other entities is passive income. Based solely on the above, this is not a controlled group. As C.B. points out, if there is child under the age of 21, then the 100% interest of each parent in their respective companies is attributed to the child. There would now be 2 companies under common control of the child, and therefore, a controlled group.

There are those A employees who have not shifted over to B. There are those B employees who have always worked for B. The problem, as I understand it, is the treatment of former A employees transferred to B ("Transferred Employees"). They are new employees of B as of June 19th, and any contribution allocated to their accounts post June 19 to December 31st, 2019 will be part of Plan B assets and tested as of December 31, 2019 for B's top-heavy status. Their account balances as of June 19th plus earnings thereon will be tested as of December 31, 2019, as a part of A's top heavy testing. Are any of the Transferred Employees Key Employees of A or B during 2019?

This is incorrect. The controlled group rules certainly apply to the 404(a)(7) deduction rules. See Treasury Regulation 1.414(b) and 1.414(c).

Suppose I have a traditional 401(k) plan without a match. Calendar year end. There is an employee who was not given the opportunity to defer into the plan from January 1, 2010 to February 15, 2016. Assume the error was discovered on February 1, 2016 and the participant was given the right to defer beginning on February 15, 2016. Suppose further that the reason for the missed deferral opportunity was a mistaken exclusion of the employee (so there was no deferral election in place). To determine the corrective QNEC amount, EPCRS has you look at the ADP of the group of employees (HCE or NHCE) that this employee belonged to during that period. Suppose the employee has been a NHCE for the entire period. Also, suppose the plan does the ADP test on a current year basis. For 2010 through 2015, the ADP for the NHCE is known. However, the ADP for the NHCE for 2016 is not known. What ADP is used for the remaining 1.5 months (from January 1, 2016 to February 15, 2016) when the ADP for 2016 for the NHCE will not be known until at least 12/31/2016? I do not see an answer to this anywhere in EPCRS, but it could be that I am just missing something very basic. Does anyone have any thoughts?

This type of transaction would not qualify.

Yes, but the problem in passing the ADP/ACP test is that the 401(k) plans should have the same plan year, and the same testing method. You cannot aggregate a SH 401(k) with a non- SH 401(k) plan. For non-SH 401(k) plans, they should have the same testing method (current versus prior year). It would be nice if they have the same eligibility features, and similar BRF (otherwise you may have to 401(a)(4) BRF testing). So, it can become a mess.

The 1.410(b)-2(f) transition relief from 410(b) applies only if the plan satisfies 410(b) immediately before the acquisition. Company B's plan, adopted in 2018, did not exist before the acquisition, so the relief does not apply to Company B's plan for 2018, 2019, and 2020. If Company B's plan does not satisfy 410(b) for those years separately, then one option for B to pass 410(b) is to try to aggregate with Company A's plan for those years and hope that the aggregated plans pass 410(b).

EBEC, you beat me to this. Thanks! It is called the "Reduction of Account Balance Correction Method" in that paragraph.

BG5150, I cannot speak for Luke, but I enjoy these arguments. Being an attorney, ex-attorney, or whatever does not give me any special wisdom. The exchange of ideas and reasoning is why I am on this board. I am still learning.

Please explain. I am here to learn.

You may get a more accurate/complete answer from an actuary, but in my limited reading of the 404(a)(3)(iv), it appears that the two PS plans would be aggregated and therefore, the total 31% you have allocated between the two PS would be okay.

However, this implies that a mid-year amendment that reduces SHNECs would violate the safe harbor rules.

Kevin, I don't even see 1.401(k)-3(e)(1)(ii) in my Reg. book. Is your cite accurate? Thanks.

Well, if they did that, it would reduce the need for CPAs and attorneys. Look at the bright side!

It is semantics, but the fix under EPCRS is not excess 415, it is ineligible employee inclusion.

I agree, there is nothing directly on point in the Treasury Regulations, but different vesting schedules for different contribution sources is not a new concept, as you point out.

But, to be more precise, this person had 415 compensation, it was not 0.