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Showing results for tags 'testing questions'.
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Combo testing for plans with different nra
Tedterrific posted a topic in Retirement Plans in General
We have a cash balance plan with NRA of 62+5 and a 401k plan with NRA of 65+5. For 401a4 testing what NRA do you use? Note that software seems to only allow one NRA assumption. I am inclined to use 62+5 since that would be the least advantageous for NHCEs in the k plan. But technically should you test under both NRAs? Or somehow test using different NRAs for each plan? -
Scenario #1 MEP adopter terminates services with MEP effective 1/1/2020. Per agreement, once termination occurs, they immediately are no longer eligible to contribute to MEP. New plan is not effective until 5/1/2020. It is established as a new plan with a short plan year in the document. Can the employer withhold contributions from 1/1/-5/1/2020? I am assuming no since there was not a "plan" in place. If the answer is no, if the employer withheld contributions, what should the ER do with them? Since there is a gap in the time from leaving the MEP to the new SEP, how does this impact testing? Would HCE determination be from 5/1/18-4/30/20? What about prorating the compensation limit? For top heavy, would the 12/31/20 balance be used for 20 &21? Scenario #2 MEP adopter leaves the plan effective 4/30/2020, New Plan is established 5/1/2020. Document indicates it is a short plan year for the first year. How does impact testing? HCE determination. Do we test contributions from 1/1-4/30 under the MEP and only test contributions from 5/1/2020 through 12/31/20?
