ombskid Posted April 23, 2020 Posted April 23, 2020 401(k) plan has SHNE plus profit sharing. General test. I year eligibility New entrant leaves after 3 months of participation. Profit sharing is 0% vested under 6 year vesting schedule. Does the profit sharing piece have to be vested to count in the general test?
C. B. Zeller Posted April 23, 2020 Posted April 23, 2020 No. Free advice is worth what you paid for it. Do not rely on the information provided in this post for any purpose, including (but not limited to): tax planning, compliance with ERISA or the IRC, investing or other forms of fortune-telling, bird identification, relationship advice, or spiritual guidance. Corey B. Zeller, MSEA, CPC, QPA, QKA Preferred Pension Planning Corp.corey@pppc.co
Larry Starr Posted April 23, 2020 Posted April 23, 2020 2 hours ago, ombskid said: 401(k) plan has SHNE plus profit sharing. General test. I year eligibility New entrant leaves after 3 months of participation. Profit sharing is 0% vested under 6 year vesting schedule. Does the profit sharing piece have to be vested to count in the general test? No; but everyone should remember that if you do a -11g amendment giving money to a participant like this, there needs to be some vesting on it (we usually add 10% for that first year as part of the -11g). Lawrence C. Starr, FLMI, CLU, CEBS, CPC, ChFC, EA, ATA, QPFC President Qualified Plan Consultants, Inc. 46 Daggett Drive West Springfield, MA 01089 413-736-2066 larrystarr@qpc-inc.com
Mike Preston Posted April 23, 2020 Posted April 23, 2020 1 hour ago, Larry Starr said: No; but everyone should remember that if you do a -11g amendment giving money to a participant like this, there needs to be some vesting on it (we usually add 10% for that first year as part of the -11g). There is a big difference between what the OP is talking about (a regular PS contribution) and what Larry is talking about. You don't need or want an 11g3 amendment to allocate a regular PS contribution.
Larry Starr Posted April 23, 2020 Posted April 23, 2020 2 hours ago, Mike Preston said: There is a big difference between what the OP is talking about (a regular PS contribution) and what Larry is talking about. You don't need or want an 11g3 amendment to allocate a regular PS contribution. Yeah, what he said. But OP said it is a general tested plan. Maybe this participant is not entitled to a contribution cause he's not there at end of year and they need him in the test to pass? It was the general test comment that had me mention the -11g issue, just in case...... Lawrence C. Starr, FLMI, CLU, CEBS, CPC, ChFC, EA, ATA, QPFC President Qualified Plan Consultants, Inc. 46 Daggett Drive West Springfield, MA 01089 413-736-2066 larrystarr@qpc-inc.com
Mike Preston Posted April 23, 2020 Posted April 23, 2020 26 minutes ago, Larry Starr said: Yeah, what he said. But OP said it is a general tested plan. Maybe this participant is not entitled to a contribution cause he's not there at end of year and they need him in the test to pass? It was the general test comment that had me mention the -11g issue, just in case...... Yeah, this could be a question on a test: Describe the circumstances consistent with the above discussion that might cause an -11g3 amendment to be needed... [I can think of one].
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