A 401k plan is written with a safe harbor match plan year calculation formula. They fund the match per pay period and provide a true-up after year end. They also fund lost earnings on the true-up. For example, if a participant is owed a true-up, they fund it in September (for a calendar year-end plan). They also calculate lost earnings from the last day of the plan year (12/31) to the date they fund the true-up. When asked why they fund lost earnings, we were told "because that's how we've always done it." They feel that since the match does not happen until September, they owe their employees the earnings. They feel that had the employee deferred evenly throughout the year, all their match would have been funded by 12/31. Can lost earnings be funded on the true-up?

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If a participant's termination date is 12/31/17 but he is employed on that date, then for RMD purposes is his first calendar year 2017? Or is it 2018? Seems like a simple answer but we have differing opinions in the office. The participant is 70-1/2 in 2017.

An employee was a non-union EE, but now is a union EE. The plan excludes union employees. Can this EE take his money of of the plan now because he is no longer eligible to participate?

The top-heavy minimum allocation is based on compensation that includes taxable fringe benefits even if the plan excludes taxable fringe benefits from the definition of Compensation, correct? The fact that it is a safe harbor exclusion does not matter. Correct?

Let's say a plan designates each person into a separate group for Profit Sharing contribution purposes. For instance, let's say the owner maxes out and gives smaller contributions to some NHCEs and 0% to others. Let's say the General Test passes. Now, let's take a look at the Coverage Test. [1] Ratio Percentage: Let's say the plan fails Ratio Percentage portion of the Coverage Test. [2] ABT: My understanding is that the plan cannot rely on ABT in this case (even if it passes in terms of the percentages) because the nondiscriminatory classification portion (the first part of ABT) is not passed because the allocation of Profit Sharing contributions is not nondiscriminatory. Would you agree? Would you say that if the plan designates each employee into his/her own group for Profit Sharing allocation purposes, the plan must pass the Coverage on Ratio Percentage and can't rely on ABT (even though the mid-point can still be used for General test if both Ratio Percentage and ABT test are passed)?

I'm preparing for the May 2018 EA 2L exam using Dave Farber's EA 2L study manual and the EA 2L solutions manual. Most examples and exercises repeatedly use annual annuity and annual benefit. But the problem 45 solution didn't give any explanation why it was not necessary to convert the given monthly benefit and monthly annuity to annual benefit and annual annuity. Can someone please explain when I don't have to worry about converting the monthly benefit or the monthly annuity to annual (if possible, with examples)? I have attached the 2017 EA 2L problem 45:

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