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We have two plans that are in an affiliated service group. One plan is very large and has a high density of HCEs. The other is much smaller with a more normal population. The large plan isn't an issue -- it isn't affected much by being in the same affiliated service group as the small plan. However, the testing for the small plan is wrecked by being tested with the large plan. I am at a loss for what to do. Anyone have this problem and figure out a good solution?

I've managed to confuse myself on an AFTAP/deemed burn issue. Plan Year = Calendar Year Prior Year AFTAP > 100% because assets exceed funding target, so prefunding balance does not have to be subtracted from assets for AFTAP (but not FTAP) purposes. Current Year AFTAP not certified by 4/1, so presumed AFTAP becomes last year's AFTAP minus 10%. Presumed AFTAP is over 90%. No deemed burn applies at this point. Valuation is run in May. Current year assets are less than funding target, so prefunding balance must be deducted from assets in AFTAP calculation, resulting in an AFTAP of slightly less than 80%. Restrictions would apply, and there is enough prefunding balance so that a burn can bring AFTAP up to 80%. Is there a required burn triggered by the actual valuation results here? I'm thinking the answer is yes, but I haven't seen this happen in this way many times before. Insights appreciated.

Can someone please help answer a few questions? Attorney offices keep pawning me off to other attorney offices and I"m getting nowhere. Husband was receiving an injury related retirement pension from the city he worked in. He elected me as the beneficiary after we were married. He had been divorced prior, and It was noted in the divorce decree that his wife was to receive half. She filed a joinder for the Plan Administrator, but a QDRO was never completed. He passed away in December, 2018, but the city denied me his benefits due to their requirement of a 1 year waiting period and he died in month 9.

Hello. The owner of a plan is going to be terminating his plan in 2019. He also attained age 70 1/2 in 2019. His first distribution calendar year is 2019, and his required beginning date is 4/1/2020. He intends to terminate the plan in 2019, and payout all account balances prior to 12/31/2019. His account balance will be rolled over into an IRA. My question is: would he need to have his first RMD processed in 2019 since his first distribution year is 2019, or can his entire balance be rolled over because his required beginning date is not until 4/1/2020. Thank you very much!!

Hello! I would like to get your input.If there is an outstanding 403B loan for example 15k in Vanguard. The employer switch to a new carrier and now 100k of 401 money is moved to Fidelity. If a new loan is processed with the new services, would the 50k IRS limit apply? The loans are in two different service providers but in the same employer's 403 B plan. Your input is highly appreciated. Thank you.

Can a safe harbor plan exclude the employees of one member of a controlled group? Can the plan be separated into SH and non-SH?

Plan A matches based on total gross pay, but for purposes of the match, they want to amend the Plan effective 1/1/2020 to exclude a lot of different compensation items. I assume I still have the flexibility to leave the plan on prior year testing, thus getting one more year of the "inflated" ACP results? In other words, I know in 2020 the ACP average for the NHCE's is going to take a hit, but I'll still be using the 2019 averages anyway. I suppose it's the flip side of a company discontinuing the match in 2019, forgetting to switch to current year testing, and then resuming the match in 2020 (a scenario we all agree means 100% refunds for the HCE's).

401(k) Plan has a discretionary match that is calculated after end of the plan year. The ACP test fails and there is a return of excess to process. However, the employer won't be depositing the match until probably May or June. Do we still process that distribution by March 15 even though the deposit hasn't been made? Doing so would take the withdrawal from the participant's current account balance. Or do we wait until the match has been deposited and pay the 10% excise tax penalty?

Hello, If the paycredit rate (say 5%) is enough to pass the 401(a)(4) test, but not enough to meet the Top Heavy benefits, what do you do? Say an employee earned $1,000 in paycredits for 2018. Plan passes 410b and 401a4. Say the hypothetical account balance for the employee is $2,000 as of 2018, but if the employee terminates now and therefore receives the Top Heavy minimum, the amount must be increased to $5,000. So you know the paycredit for 2018 is not enough for the "distribution" amount.... Do you increase 2018 pay credit for this person with a discretionary amendment? I don't think 11g amendment applies since there is no failed test? If you leave the paycredit at $1,000 for 2018, do you inform the client that the actual payout amount would have to be $5,000? Creating a DC plan would be the best option, but let's say the client is not interested in adopting one. Thank you!

A client just supplied me with their 2018 W-2's showing total employee deferrals of $22,000. When I balanced the assets of the plan from their brokerage statements, the total deferrals amounted to$20,000. I thought that the missing $2,000 was simply a contribution in transit that would show up early in January, 2019. Unfortunately, only $1,000 showed up in January leaving the plan $1,000 short. When I questioned the office manager, she indicated that the November contribution of $1,000 was never deposited and wants to know if she should deposit this amount now. As I see it, there are a few issues: 1) employee deferrals are cash items. Therefore, the remaining $1,000, yet to be deposited, cannot be considered employee deferrals for 2018. 2) If 1) above is true, then the individual W-2's reflect excessive deferrals amounts and need to be re-done. Conceivably, if individual 2018 personal tax returns have been already filed, they may need to be re-filed. 3) Since the $1,000 has been in a corporate account rather than the 401(k) since November, could this be a prohibited transaction? 4) If the adjustments for most (there are only about 6 in the plan) would be relatively small, if there anything that can be legally done to make this mess just go away?

A client just supplied me with their 2018 W-2's showing total employee deferrals of $22,000. When I balanced the assets of the plan from their brokerage statements, the total deferrals amounted to$20,000. I thought that the missing $2,000 was simply a contribution in transit that would show up early in January, 2019. Unfortunately, only $1,000 showed up in January leaving the plan $1,000 short. When I questioned the office manager, she indicated that the November contribution of $1,000 was never deposited and wants to know if she should deposit this amount now. As I see it, there are a few issues: 1) employee deferrals are cash items. Therefore, the remaining $1,000, yet to be deposited, cannot be considered employee deferrals for 2018. 2) If 1) above is true, then the individual W-2's reflect excessive deferrals amounts and need to be re-done. Conceivably, if individual 2018 personal tax returns have been already filed, they may need to be re-filed. 3) Since the $1,000 has been in a corporate account rather than the 401(k) since November, could this be a prohibited transaction? 4) If the adjustments for most (there are only about 6 in the plan) would be relatively small, if there anything that can be legally done to make this mess just go away?