I am helping a Non-Profit terminate their 401(k) and start a SIMPLE IRA program. They have only two employees, so the admin costs of a 401(k) plan didn't make much sense. Is there a way around the 2-year rule for rolling money into the SIMPLE? I guess I don't really understand why people are prohibited from rolling money into a SIMPLE IRA for two years. Are there any penalties for rolling money in before the plan has existed for two years? Would it simply be considered a taxable distribution?

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Anyone else having issues with the system being able to calculate one year of service eligibility provision correctly? I'm on my 4th incident to Relius and they keep coming up with reasons on why its not calculating correctly. The reasons they explain to me have not been the way the system has handled the calculation for the last 15+ years.

A retirement plan's accounting and reporting year is the calendar year. The plan's administrator would like to file its report on 2018 as early in 2019 as it can. The administrator does not have its own filing credentials, and has in years past authorized its TPA to do the submission. Apart from the TPA's service availability, is there anything about Form 5500 software that would make it impractical to file in January 2019?

I have an employer who wants to motivate his employees to defer more and in his ideal world they would defer 15% of pay and he would match 10%. No, for real, I really do have someone this generous! For 2019 he has already distributed a SH Match notice promising the employees dollar for dollar up to 6% of pay -- already really generous. He's trying to figure out how to structure a discretionary match on top of the SH for 2019 that would reward employees who put in more than 6% of pay, in such a way that if someone put in 15%, they would end up with a total of 10% in employer match. He understands that at least some if not all of the match would be subject to the ACP test and that if the test fails, refunds might have to be made, and he doesn't care.

At first he, and we, were thinking that he could do a discretionary match of 44.44% on deferrals between 6.01% and 15% of pay. For the guy who defers $15,000 on a $100,000 salary, this would get him a $6,000 SH match plus a $4,000 extra match for a total of $10,000.

Then we started reading passages about having to calculate the discretionary match on all of the deferrals, not just the percentage over 6% of pay. In that case, the extra match would be 26.66% of all deferrals up to 15% of pay deferred. This would get our $100,000 person the $6,000 in SH Match plus the extra $4,000 in discretionary match for a total of $10,000. However, of course, it would increase the cost of the lesser paid/lower deferring people. I don't think this employer minds doing this, if the rules require it. He just wants to know what to do within legal parameters to achieve his goal.

[1] Must we structure the discretionary match to include all deferrals from the first dollar? [2] What exactly goes into the ACP test? The discretionary match only, or the total match including the Safe Harbor? We mostly deal with employers who won't even pay a Safe Harbor match, let alone do more, so it just hasn't come up before.

Plan sponsor elected to terminate their 401(k) plan effective December 31, 2018. The termination paperwork was signed in May 2018. When does the 100% vested rule come into plan? The effective date of termination of December 31, 2018? Or the date the termination paperwork was signed,?

Client just called and one of his employees works for another company and the employee has determined that he contributed too much in salary deferrals and now has a 402g limit issue. Can the funds with earnings be returned now or do we have to wait until 2018 has ended and return the funds in 2019 before April 15, 2019?

A Solo 401(k) sponsor wants to add a Cash Balance Plan. Is this OK, or is it advisable (or necessary) for the sponsor amend the Solo 401(k) into a regular 401(k) to have any overlapping provisions coordinated?