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Found 2 results

  1. Today my skills as a magician are being questioned, as I have failed to pull a rabbit out of hat.... A referral partner has brought us a situation with a client of his who is not our client. The party in question has a 401(k) plan that eliminated its Safe Harbor match in 2012 and has been subject to all testing ever since. This employer is angry because he has been told that for the first time, his plan became Top Heavy for 2018 based on the 12/31/2017 results of the test. He has been told that if he doesn't want to be obligated to make a Top Heavy contribution of any kind, then the Key employees cannot defer in 2018. Deferrals count, and even if a Key only deferred 1% of pay, then the company would owe the non-Key participants 1% of pay as a TH minimum contribution. Of course if any Key deferred 3% or more, then the company would have to make the standard 3% TH minimum contribution. The referral partner is looking to us for some kind of magic trick to allow the Keys to defer whatever they want to defer and somehow not owe a TH minimum contribution. My crystal ball must be cloudy or something because there's nothing I can find to do about 2018. For 2019, they should adopt Safe Harbor provisions again, whether it's the 3% SHNE or the basic SH match. If they aren't willing to do that, then they just have to accept the fact that the Keys can't defer. Am I missing something? The referral partner has been told that a "creative solution" should be found. I can think of all kinds of creativity for failed ADP/ACP tests, cross-tested formulas that don't work out, etc., but I don't know of a "creative" solution to Top Heavy! Any ideas will be appreciated. Thanks!
  2. There is a safe harbor plan that is top heavy. The plan also has a New Comp and wants to exclude 3 Non-Key employees from receiving a Profit Sharing. These Non-Key Employees are also HCE that are excluded from receiving the Safe Harbor Non-Elective. Can those individuals be excluded from receiving the 3% Top Heavy/Minimum Gateway OR do they have to receive a funding.
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