perkinsran

401k Plan currently excludes part-time employees from participating in the 401k plan. If a full time employee moves to part-time can they be excluded prospectively?

Client makes profit sharing deposits during the year and also has a Cash Balance Plan. In 2019, the profit sharing contribution deposited into the plan was greater than was deductible for combined plan purposes (e.g. profit sharing exceeded 6% due to it being a service company). Since the owner’s portion is not deductible and is below the 415 limit, can the money stay in his account and be treated as after tax basis for taxation purposes.

Thanks to all. I appreciate you feedback.

Thanks. 50% in our office think it is tested under 401m and the other 50% thinks it is tested under 401(a)(4). Are you implying you think it has to be tested under both?

Client contributes 7% as er contributions if ee contributes at least 5%. Less than 5% employees receives $0. In testing this plan for nondiscrimination testing, would it fall under ACP or 401(a)(4)?

Thanks so much. That is what I thought. The fail the ACP test but we could pass the 401(a)(4) test. The prior bundled vendor did not do anything. We just picked this plan up. It is a fairly large plan and they are going to be surprised when I tell them we are going to have some refunds to deal with in the next four weeks.

There is no "Matching"formula. The document says if you contribute at least 5%, we will give you a 7% contribution. So if you do 4%, you get nothing. If you do 10% you get 7%. So you either get 7% or 0%.

We have a 403b plan that provides a 7% match but only to employees who contribute at least 5%. Is the plan tested under the ACP test or the Nondiscrimination test under 401(a)(4)? I assume the ACP since it is conditioned on the employee contributing.

The decision was made prior to the sale to Company B to terminate the plan as Company B did not want to assume Fiduciary responsibility for a plan that they had no involvement. The termination created a distributable event for all participants. The owners initiated their rollover distribution that only was allowed due to termination of the plan. All others are being held up by TPA for processing after termination fees and other administrative fees are applied.

I have an unusual situation. Company A sells their company to Company B. Company A sponsors a 401k plan but Company B by nature of the sale does not decide to sponsor that plan but set up their own plan. Company A sets a termination date for their plan and owners take their distributions from the plan. All participants of company A are now terminated from Company A and are participants in Company B. They have requested Distributions/Rollovers from company A plan. TPA that is executing the plan termination has held the distributions to the remaining participants and now indicates that termination expenses will be charged to the remaining participants. Considering that the owners of Company A had the largest balances in the plan and have taken their assets, have they not breached their fiduciary responsibility? Can they legitimately charge plan termination fees to participants? Are these not settlers expenses? What is being done wrong here?

Company A acquired Company B on 3/27. Company A does not have a plan and Co B is terminating the plan and employees will receive a distribution payout. Co A wants to establish a Safe harbor 401k plan and allow all of company B employees to immediately contribute. Any reason that Co B had a plan would prohibit the safe harbor status? Also can employees that are in Co B that have a loan roll those loans to new plan. Thanks so much.

New owners decided to create a new 401k Plan and to require current employer to decide about exiting plan. Current Plan is terminating existing plan and giving employees the right to receive cash-out of their accounts. Any reason that the new entity/plan cannot establish a safe harbor plan in 2015.

A participant has after tax moneys (non-Roth) in a 401k of $10,000. 401k portion is $90k. The employee is over 59 1/2. Can the employee take a $10k distribution from after tax portion and roll over to a Roth IRA? If yes does it matter if the person is under 59 1/2 and the plan allows after tax distributions? Finally, if yes, can the person do it every year?

If they take over responsibilities for the plan, do they simply amend the plan to change its name and tax id # going forward.

Company A is acquired by Company B on 3/27. Company B wants to establish a new 401k plan and merge Co A asset into the new plan. Since it will take about 60 days to get new plan operational, can Co B become the sponsor of Co A plan in the meantime? My concern is the employees no longer work for company A on 3/28.