ombskid Posted May 5, 2014 Posted May 5, 2014 New plan for new company has 5 participants. Immediate eligibility for all. Profit sharing contribution is new comp, by group, each employee is a separate group. At least 4 of 5 are participating in 401(k). Match discretionary to be determined at year end. The first year all will be NHCE. Can a discretionary profit sharing contribution be made for only one NHCE?
Lou S. Posted May 5, 2014 Posted May 5, 2014 No. Unless NHCEs aregettng some benefit in a plan you haven't mentioned it will not pass descrimination.
Lou S. Posted May 5, 2014 Posted May 5, 2014 Oops you said they are all NHCEs I missed that. Yes you can descriminate against other NHCEs. Odd that all 5 are NHCEs none of them are 5% owners?
ombskid Posted May 5, 2014 Author Posted May 5, 2014 Agreed that it is odd, but that is the case. I actually think it's ok, just so unusual, at least for me, I'm looking for something I didn't think of.
BG5150 Posted May 5, 2014 Posted May 5, 2014 Any key EE's? QKA, QPA, CPC, ERPATwo wrongs don't make a right, but three rights make a left.
david rigby Posted May 5, 2014 Posted May 5, 2014 But is a Key EE automatically an HCE? No. Don't forget that HCE includes someone who is a "5% owner" anytime during the year or preceding year. 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 May 6, 2014 Posted May 6, 2014 I was thinking if there were key EEs who had a deferral. There might be TH issues. Maybe not, but could be. QKA, QPA, CPC, ERPATwo wrongs don't make a right, but three rights make a left.
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