52626 Posted August 21, 2013 Posted August 21, 2013 For the 1/1/2014 Plan Year, the Plan Sponsor wants to exclude all doctors from the 401(k) Safe Harbor PS Plan. At this time all doctors are currently in the plan and receiving employer contributions and deferring. Can the Plan Sponsor now ( 2014) say these participnts are excluded? Coverage would be met since they are all HCEs. If they can exclude them, do you continue to include their account balanes for top heavy determination? edit. They are removing the safe harbor in 2014, if the doctors are excluded
BG5150 Posted August 21, 2013 Posted August 21, 2013 Eligibility is not a protected benefit, so, yeah, they can exclude the HCEs. I do not know the answer tot he TH question. If it's a SH plan, why are you worried about TH? Is the SH a match? QKA, QPA, CPC, ERPATwo wrongs don't make a right, but three rights make a left.
401king Posted August 21, 2013 Posted August 21, 2013 Is the goal is to lower the cost of employer contributions? Couldn't they exclude the doctors (HCEs) from receiving SH contributions? R. Alexander
david rigby Posted August 21, 2013 Posted August 21, 2013 Eligibility is not a protected benefit, so, yeah, they can exclude the HCEs. Prospectively, not retroactively. I'm a retirement actuary. Nothing about my comments is intended or should be construed as investment, tax, legal or accounting advice. Occasionally, but not all the time, it might be reasonable to interpret my comments as actuarial or consulting advice.
BG5150 Posted August 21, 2013 Posted August 21, 2013 Eligibility is not a protected benefit, so, yeah, they can exclude the HCEs. Prospectively, not retroactively. OP said 2014. QKA, QPA, CPC, ERPATwo wrongs don't make a right, but three rights make a left.
BG5150 Posted August 21, 2013 Posted August 21, 2013 edit. They are removing the safe harbor in 2014, if the doctors are excluded Are there any key employees who are not doctors? QKA, QPA, CPC, ERPATwo wrongs don't make a right, but three rights make a left.
52626 Posted August 21, 2013 Author Posted August 21, 2013 to my knowldge all key employees are doctors.
ESOP Guy Posted August 21, 2013 Posted August 21, 2013 I don't see how you can exclude Keys from the T.H. test just because they are excluded from contributions.
BG5150 Posted August 21, 2013 Posted August 21, 2013 But if none of the key ee's are getting an allocation, there is no minimum contribution to be made. So what if the plan is 90% top heavy? (That's why I asked if there were any other key ee's) QKA, QPA, CPC, ERPATwo wrongs don't make a right, but three rights make a left.
BG5150 Posted August 21, 2013 Posted August 21, 2013 My question is: if they are excluding the doctors--all of them--then why have a plan? QKA, QPA, CPC, ERPATwo wrongs don't make a right, but three rights make a left.
BG5150 Posted August 21, 2013 Posted August 21, 2013 If I'm an owner and will not be benefitting, why should I offer my employees a plan? It would be something nice to do, however, it's a cost I don't want to bear. I'm guessing the availability of a 401(k) plan is not a recruiting tool when dealing with rank & file medical office employees. QKA, QPA, CPC, ERPATwo wrongs don't make a right, but three rights make a left.
QDROphile Posted August 21, 2013 Posted August 21, 2013 Cynical, but rational. I have always alway enjoyed your tag line.
BG5150 Posted August 21, 2013 Posted August 21, 2013 Thanks. heard it many years ago. Side note: UPS trains its drivers to try to make three rights instead of one left. It has proven to be more fuel- and time-efficient. QKA, QPA, CPC, ERPATwo wrongs don't make a right, but three rights make a left.
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