Small plan -- 8 participants including 1 HCE (owner), total assets around $175K. Plan sponsor made a deposit of employee deferrals but the check bounced. Sponsor replaced bad check and funds are in the plan. However, asset custodian charged small fee ($25) for returned check. Must plan sponsor reimburse plan for the returned check fee or can it be netted against earnings? What do the regs say?

Plan has decreasing tiered profit sharing formula based on compensation:

• 2% of the first 30k in comp
• 1% of the next 10k in comp
• 0.5% of the next 25k in comp
• 0.25% of the next 35k in comp
• 0.1% of the next 65k in comp

Would this require General (Rate Group) nondiscrimination testing?

Owner has 4 hourly employees. The plan was set up with a safe harbor match. None of the NHCE hourly employees has enrolled in the plan although each is eligible. So only the owner has a balance. He continues to put in the maximum 401k and SH match for himself. Plan has no profit-sharing component, so no top-heavy minimum required. I'm not accustomed to seeing a plan in which only the owner has a balance. Any implications?

Must a plan be terminated when there is no longer a business -- the solo owner is retired and has no employees -- he takes no compensation but still has the plan.

Top Heavy Plan. The only contribution made during 2018 were the employee deferrals. (The Key Employees all maxed out.) Is a 3% Top Heavy minimum contribution required, or not (because they didn't receive any employer contribution)?

Is age 65 or 62 to be used when cross-testing a DB/DC plan? The DB Plan document defines NRD as "The later of age 65 or the fifth anniversary of Plan participation, or if earlier, the later of age 62 or the 10th anniversary of Plan participation." The DC plan document states NRA means the "Later of age 65 or 5th anniversary of the date the participant commenced participation in the plan."

We have a partnership consisting of three partners. The company sponsors a cash balance DB a well as a safe harbor 401(k)/PS plan. One of the partners, who will remain a client, is breaking away to start his own firm on June 30, as a sole proprietor, 1099 income. As part of the buyout, he will be paid for 5 years on a 1099. We will be terminating the existing cash balance plan effective June 30, notice requirements have already been prepared. For simplicity, the SH/401(k)/PS will remain through the end of 2019, then be terminated. Would the new sole proprietorship of the exiting partner be considered a successor entity? The only change is the form of business entity; he will be establishing a cash balance as well as a 401K/PS for himself. As of the moment, the employees of the existing partnership will remain with the partnership. Under this scenario, could the sole proprietor establish a 401(k) as of January 1, 2020, assuming the existing 401(k) of the partnership will be terminated?

Let's say an employer has 10 employees, and all employees have enough service to basically enter a plan on day 1 if a plan were to begin. If a deferrals-only plan were established effective 1/1/2018 but elective deferrals were not effective until 10/1/2018, would the beginning-of-year participant count for Form 5500 be 10, or instead would it be 0 (because elective deferrals weren't effective until 10/1)?

Does anyone know if the IRS is actually assessing late filing or failure to file penalties on an ALE if the ALE [1] timely responds to the Letter 5699 indicating they will file within 90 days, and [2] files 1095-Cs and 1094-C within the 90 days? I know the IRS may assess penalties in this situation, but I'm trying to find out if the IRS actually is doing so when the employer has come into compliance.

A Safe Harbor 401k PSP currently permits all participants including terminated participants with vested account balances to take participant loans, with repayment via cashier's check (actives via payroll withholding). They have come to realize the difficulties in collecting payments and the resources used to follow-up, and as a result want to modify the plan to permit loans only to active participants and parties in Interest going forward. [1] Will an amendment eliminating loan availability to terminated participants violate a BRF provision? (Are they a protected BRF?) Any existing loans will continue repayment as per their current terms. [2] Or must the amendment include a provision stating vested account balances as of the amendment date must be protected and available for loan purposes even if termination occurs at some later date?