TMcfall

We have a client that is currently utilizing a 2 month eligibility requirement. They are changing the eligibility requirement to 12 months effective 1/1/2022. My question is an employee hired September 1, 2021 would be eligible as of November 1, 2021. The employee begins deferrals on Nov 1, 2021. on 1/1/2022 when the eligibility requirements change would the employee then be required to wait until September 1, 2022 to begin contributions? Or would they be somewhat grandfathered in under the 2 month requirement?

A client recently acquired a number of employees but never gave the employees the opportunity to enroll and begin deferrals. The client is looking for a solution to remedy this with the employees as well as keeping the plan compliant. I know that a QNEC is owed for the missed opportunity and the employer is responsible for 25% of employee deferrals and 100% of the Safe Harbor Match. My question is since the employees were never notified or given the opportunity to elect a deferral percentage. What would you take 25% of?

@Peter Gulia The employee is NOT a US citizen nor are they a US Resident. The employee was hired to work remotely in the Philippines. My assumption is that IF the employee is paying social security tax then they would in fact be able to participate. However, at the moment I am unsure if the wages from the employer are US -source income.

We have a company that is a US based company with the majority of their employees residents of the US. However, they have a number of employees that are residents of the Philippines. Are the employees located in the Philippines able to participate in the 401(k) plan?

When testing a 401(k) plan that has made the determination to terminate the plan. Would the plan year end date for purposes of non discrimination testing be the date the termination resolution was signed? Here is a example: The company is going out of business and the resolution to terminate the plan was signed in March. Would non discrimination testing be run from 1/1 - March (the plan is calendar year) or would the compliance testing run from 1/1 - the date the assets are at zero?

@Bill Presson both companies have roughly 25 employees of which roughly 5 are HCE's. Eligibility for both plans is 21 years of age, 1 year of service, with quarterly entry. The only real difference in plan design is that one offers a safe harbor match and the other does not.

Here is the situation... Company A & Company B are owned 100% by the same person. Company A offers a 401k safe harbor plan Company B offers a 401k plan with no matching at all. Due to the fact that the same person owns 100% of both companies would the two plans need to be identical in plan design? Additionally, if both plans do have the same design is there any need to combine the plans as a control group with a participating employer?

The previous 401k was terminated after the client learned that they were a member of a controlled group that already had a 401k plan in place.

Do the successor plan rules apply to a one participant plan?

I have a scenario where a one participant plan recently terminated their plan and is hoping to start a new 401k plan. Do the successor plan rules apply here and must the client wait 12 months before establishing the new 401k plan?