If the employer over matched on deferrals because they got the formula wrong, are the excess matching contributions forfeited before the ACP test is run or are they included in the ACP test? I read somewhere they're possibly excluded from the ACP test and included in the general test. Yeesh. Any clarification would be appreciated.

Company A owns 20 other companies at 100% ownership. All 21 (20 plus company A) entities have their own separate plans with different record keepers, TPA's and financial advisers. No one has performed combined coverage testing for the past 15 years. The plans vary from safe harbor to traditional 401k with profit sharing. All plans are small plans so on their own have not had an audit requirement. All plan year-ends are calendar year. Is this an obvious VCP submission requiring them to go back and run coverage testing for X years? Or can this be self corrected?

I have a plan with a discretionary match that is calculated and deposited each payroll. At the beginning of the year the board of directors elected to cap the match at 15% of compensation. The payroll department didn't apply the 15% cap and 3 participants received excess matching contributions (2 were $4000 and one was $6000). Is the cure for this error to forfeit the excess?

We have a 401(k) plan for a non-profit entity with a new comparability formula for the profit sharing. The intention in the design was to have each participant in his own group and to vary the contribution level at will. There are no HCEs and of course no "owners." Can the employer give 10% of pay to the 3 oldest employees and nothing to the 3 youngest employees? Can the contribution be literally whatever they want to give to each person? We are so accustomed to the world of small closely held companies that it's hard to think outside the parameters of normal non-discrimination testing. Our first instincts are to say "Oh no, you can't do that!" but perhaps you can!

We are planning on amending our plans in 2020 for the new hardship rules. That includes the no more suspension of deferrals. What happens is some takes a hardship now? Their suspension period would go until February. Does the suspension just go away January 1?

Client set up an LLC for himself. He's also a partner in a larger company. That LLC issued him a K-1 for his income, and then also issued his own separate (single member) LLC a K-1 as well for a separate source of income from the larger partnership. It's that "smaller" LLC that sponsors his plans. The first year, he had a Schedule C to reflect the payments from the smaller LLC to the individual. Since then (the past 2-3 years), the income is not being shown as flowing through the smaller LLC - he just received it on a second K-1 issued by the larger company. So I think that's wrong to use for purposes of funding his plans. But - is it enough for the big LLC to pay the little LLC on that K-1, or does the little LLC then need to turn around and issue a Schedule C every year? Or, is it enough that as the single member, the earnings on the K-1 (from big LLC paid to little LLC) enough to count as income for the individual himself? We're trying to figure out if the CPA needs to re-address past years' tax statements, in terms of how the payments were reported, before we get into tracking what sort of benefit he's actually due under the DB plan.

Anyone with experience with use of level funded health plan and Davis-Bacon? Client has MEWA with a level funded health plan and would like to offer to employers subject to Davis-Bacon. Would contribution of employer premium to MEWA sponsor be considered an "irrevocable contribution to an unrelated third party" under Reg. Sec. 5.26? Because a level funded plan is a partially unfunded plan, we are trying to verify whether the contribution of the premium to the sponsor makes the plan a bona fide fringe plan, despite the fact that the plan is technically partially unfunded.