austin3515 Posted April 6, 2021 Posted April 6, 2021 2 Plans in a controlled group. Plan A is a 6/30 year end, and Plan B is a 12/31 year end. How do I determine who is an HCE? Austin Powers, CPA, QPA, ERPA
Belgarath Posted April 6, 2021 Posted April 6, 2021 I assume you mean for the compensation test? (The ownership in each corporation is not aggregated for the 5% owner test.) I'm not certain without some research, but I assume (always risky), since the compensation IS aggregated, that it would be the lookback year compensation from both employers. Is the Plan A using the calendar year election? That would probably be too easy...
austin3515 Posted April 6, 2021 Author Posted April 6, 2021 I was thinking calendar year would make a lot of sense, but alas not elected (I could easily amend). But let;s say I did not. Plan A look back year is based on 6/30, Plan B on 12/31. So when I'm doing coverage testing, who's a highly and who isn't? Whose lookback year controls? Or is it based on the plan year ending within the plan year of the tested plan? This is the first time I was ever in this situation.... Austin Powers, CPA, QPA, ERPA
Belgarath Posted April 6, 2021 Posted April 6, 2021 Not having time to do any research on this, I can only give you my gut impression. I'd think it would be the plan year ending within the lookback year of the plan being tested. However, no degree of confidence in that answer. I've never run into it either.
Bill Presson Posted April 6, 2021 Posted April 6, 2021 Seems to be an ongoing issue for Belgarath. William C. Presson, ERPA, QPA, QKA bill.presson@gmail.com C 205.994.4070
Popular Post C. B. Zeller Posted April 6, 2021 Popular Post Posted April 6, 2021 Assuming you did not make a calendar year lookback election, you will need to know 6/30 year-end comp and calendar year comp for all employees in both companies. For A's plan year beginning 7/1/2020, employees in both A and B who had comp greater than the limit for the period 7/1/2019-6/30/2020 will be HCEs when doing A's testing. For B's plan year beginning 1/1/2020, employees in both A and B who had comp greater than the limit for the period 1/1/2019-12/31/2020 will be HCEs when doing B's testing. austin3515, Luke Bailey, CuseFan and 2 others 5 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
Belgarath Posted April 6, 2021 Posted April 6, 2021 Ugh - I'd forgotten all about that question. Chalk it up to CRS Syndrome... Bill Presson 1
CuseFan Posted April 6, 2021 Posted April 6, 2021 CBZ is spot on. Kenneth M. Prell, CEBS, ERPA Vice President, BPAS Actuarial & Pension Services kprell@bpas.com
shERPA Posted April 6, 2021 Posted April 6, 2021 5 hours ago, Belgarath said: Ugh - I'd forgotten all about that question. Chalk it up to CRS Syndrome... Yeah, I'd like to know how Bill remembers other peoples' questions. I want some of that. I can't remember my own questions either! I carry stuff uphill for others who get all the glory.
Bill Presson Posted April 7, 2021 Posted April 7, 2021 17 hours ago, shERPA said: Yeah, I'd like to know how Bill remembers other peoples' questions. I want some of that. I can't remember my own questions either! Ha! I was searching to see if I could find something that would help and his old question popped up. Don't give me that much credit! William C. Presson, ERPA, QPA, QKA bill.presson@gmail.com C 205.994.4070
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