"We have a client with a safe harbor 401(k) plan that imposes different elective deferral eligibility requirements for NHCEs and HCEs. NHCEs may begin making elective deferrals on the first day of the month following the first day of employment or re-employment. HCEs must complete 12 months of service before entering the elective deferral portion of the plan. However, in practice, HCEs have entered the plan at the same time as NHCEs (that is, the first day of the month following the first day of employment or re-employment).

On a separate, but possibly related note, all eligible employees must complete 1 year of eligibility service to receive the safe harbor match.

We have not seen a plan eligibility provision like this before, and wonder if this provision was intended to address early participation rules and nondiscrimination testing requirements. Has anyone else seen this provision? If so, in practice have you only applied the HCE eligibility provision to 5% owners (because a new employee cannot be a HCE based on compensation that first year)?"

"I'm trying to locate a Revenue Procedure (or it might be an IRS Notice) that came out some time in 2016 (if I recall correctly), which mentioned automatic approval of valuation date for an end-of-year valuation date to either the plan termination date or switch to beginning of year valuation. It was specifically addressing terminating plans. This was something before Rev. Proc. 2017-56."

"Employer missed the SH match for several employees in 2020. Most of the other employees were OK. It's a payroll-based SH Match, so the contribution must be made no later than the end of the quarter following the quarter in which the deferrals were taken. Did they just blow the SH protection for both ADP/ACP tests and Top Heavy?"

"I have two doctors whose businesses do not constitute either a controlled group or affiliated service group. They have a shared employee relationship where one doctor pays the shared employees through his payroll and the other doctor reimburses for his attributable portion of the pay. I know the proposed regs years ago were never finalized but are a good guideline.

My question here is prior service crediting. One doctor's business started in 2018 and the other back in the '90s. I have one employee hired in the '90s. Both doctors have a 401k plan. The 2018 company started his plan effective 01/01/2020. Would I credit the service from the older company back to the '90s for this employee? Or is it permissible to credit all hours of service going forward from inception of the shared employee relationship?"