Say you have a PS plan with each participant in his/her own group for allocation purposes and you want to run average benefits testing. I'm aware of the apparent IRS position that every participant in their own group is not a reasonable classification because it may have the effect of excluding an employee by name. I understand that position if the employer is allocating completely individual rates, including some zeros, with no consistent objective basis (e.g., we like Ann so she gets 5%, but we don't like Ben, who does the same job, so he gets 0%). However, if the actual allocation itself is still made on a reasonable, objective, business-criteria basis (and the group is nondiscriminatory) can you use ABT? For example, an employer has two locations and every participant works at one or the other, say Florida and California. The plan says every participant is in a separate group for allocation purposes. The employer makes the "official" allocations individually, but everyone who works in Florida gets the same percentage allocation, and everyone who works in California gets the same percentage allocation. Is this still a reasonable classification for ABT purposes despite the plan document saying everyone is in their own group for allocation purposes? In other words, do the "reasonable classifications" for ABT testing need to be explicitly stated in the plan document, or are the "reasonable classifications" based on actual practice?

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Any thoughts on whether the IRS considers the average rate of return for the plan as a whole a reasonable rate to use to adjust earnings on corrective contributions for missed deferrals? The plan participants had made investment elections, but employer wishes to avoid that level of complexity. Most participants are NHCEs. It seems that many service providers advise clients to use this approach.

Situation: three employers in a controlled group all have their own safe harbor match plan. The formula is the same for all 3 plans. Definition of compensation will be different for one of them (not safe harbor definition -- 414(s) comp ratio testing needed ... I'm going to refer to this as Plan 1), while Plans 2 and 3 just use 415 compensation. It's possible that participants will be in multiple plans in any given year. [1] When running 414(s) testing for Plan 1, if there are any participants that were with one of the Plan 2 or 3 during the year, would those participants ratios be calculated using: Plan 1 eligible comp/All compensation earned from any employer in the group? [2] Would 414(s) testing be required for Plans 2 or 3 if there are any participants in either that also participated in Plan 1 (assuming their compensation from Plan 1 employer is not eligible in Plans 2/3)? If all plans had the same definition of compensation, would this change anything? [3] Does being able to pass coverage separately (not requiring aggregation) change anything regarding 414(s) testing?

One my plans is under CPA Audit and the auditor doesn't like that they don't automatically re-start 401k at 6 months after a hardship distribution. Is an employer required to automatically re-start 401k for a participant after 6 months? Can they require that the participant fill out new election paperwork?

We terminated a profit sharing plan for a client in 2016 and then submitted an LOI to the brokerage firm. One of the participants couldn't be located. We asked the firm to have the check payable to an eligible rollover institution that handles lost participant accounts. Alas, the investment firm wrote a check payable to the client. The client deposited the check into his corporate checking out and forgot about it. We've told him more than once to get the check reversed, but he's done nothing. The accountant recently advised the client that a Final 5500 can be filed because there is no more money in the plan's trust. That would be nice, but it doesn't pass the smell test, in my opinion.

If a plan sponsor wants to amend the floor-offset provision out of their calendar year CB plan, would that be a straightforward as using the 12/31/18 year end hypothetical account balance with offset as the 1/1/19 beginning balance and going forward without the offset?

A plan did not include bonuses in compensation for the last 2 years. 5 owners and 1 non-owner. Too late to do anything about it now? Their allocation is comp-to-comp. Can I make up the difference in what they got and what they should have gotten, so they can claim on their taxes this year as long as that, and their 8/31/2018 contribution, don't exceed the limit?

I have a situation where Company A started 401(k), contributed, made loans to participants, and then Company A went bankrupt. Although the business is closed, the 401(k) maintained its active status in order to avoid participant loan defaults and consequent taxable income. Six months later, the same owner starts another business, of the same industry type, with 3 of the same employees. A new 401(k) plan was created. The owner has requested to transfer the loans into the new 401(k). Because this is a same owner with a request to transfer assets, is this a successor plan, or a new plan with rollover?