Message Boards Digest

August 31, 2021

Here are the most recently added topics on the BenefitsLink Message Boards:

AlbanyConsultant created a topic in 401(k) Plans

One Schedule C Has a Net Loss... Possibly Outweighed by the Owner's Other Compensation?

"A doctor owns 100% of three businesses: Sole Prop A, Sole Prop B, and S-corp C. They are all part of the plan. For the first time, I've got an issue with the compensation. Sole Prop A has a net Schedule C (before pension expense) of $34K. Sole Prop B has a net loss (before pension expense) of -$127K. And the S-corp paid him a W-2 of $278K, including $18K of 2% shareholder health insurance premium. Normally, all the numbers are positive and combine to be way over the compensation limit (even after the safe harbor expense for the participants), so this is nothing to worry about. But 2020 was, well, 2020. I'm sure it isn't as simple as combining the three numbers. I thought I remembered hearing that you combine the self-employed amounts, and if that is less than zero, you can treat that as zero... but I can't find that in writing at the moment, so I'm reluctant to go with that until I've got something to hang my hat on."

3 replies so far   |    Click Here to Add a Reply

SPARK Forum - November 7-9, 2021 -- The Breakers, Palm Beach, FL

Sponsored by SPARK
3 days packed with actionable insights for advisors, recordkeepers and plan providers. Explore latest trends, strategies and ideas to lead through disruption. Join the retirement event with the most senior audience and network with purpose. Register Now.

EBECatty created a topic in 401(k) Plans

Testing of 401(k) Plan with Dual Eligibility

"I'm not perfectly clear on how you would test this design, and would appreciate any insight. A 401(k) plan allows immediate eligibility for deferrals on date of hire; the only condition is age 21.

The plan also provides a safe harbor nonelective (also age 21). Eligibility for this portion is the January 1 or July 1 after working 1000 hours (not January 1 or July 1 following a full 12-month period in which the employee completed 1000 hours). So, if a full-time employee was hired on July 1, 2021, they may work 1000 hours before the end of 2021 and enter the safe harbor portion on January 1, 2022.

This does not seem (to me at least) to impose the maximum permissible minimum age and service conditions in 410(a), so it's not clear that dividing line for ADP/safe harbor would necessarily correspond to the participants actually getting those contributions when using the otherwise excludable employee rule (i.e., some participants who have not satisfied the maximum permissible age and service requirements would be getting safe harbor nonelectives).

If that's the case, how would you test? Would it be everyone with less than the maximum permissible conditions subject to ADP (even if some are getting safe harbor nonelectives) and everyone with more than the maximum permissible conditions exempt from ADP testing due to the safe harbor? FWIW, this is what ERISApedia and Who's the Employer seem to suggest."

2 replies so far   |    Click Here to Add a Reply

Here are the most recently posted jobs on, a service of BenefitsLink:

View job as Plan Administrator/ Consulting

Plan Administrator/ Consulting  View details

Associated Pension Consultants
Chico CA / Sacramento CA

View job as 3(16) Account Manager

3(16) Account Manager  View details

Ubiquity Retirement + Savings
Remote / San Francisco CA / AZ / CO / FL / IL / KY / LA / MA / MO / MS / NC / NJ / NV / NY / OH / OR / RI / SC / TN / TX / WA

View job as Independent Enrolled Actuary

Independent Enrolled Actuary  View details

Pension Consulting Actuary
Remote / Palm Beach Gardens FL / CA / NY

►View More Jobs

►Post a Job

►Get Instant Job Alerts, Inc.
56 Creeksong Road
Whittier NC 28789
(407) 644-4146

Lois Baker, J.D., President
David Rhett Baker, J.D., Editor and Publisher
Holly Horton, Business Manager

Copyright 2021, Inc. All materials contained in this mailing are protected by United States copyright law and may not be reproduced, distributed, transmitted, displayed, published or broadcast without the prior written permission of, Inc., or in the case of third party materials, the owner of those materials. You may not alter or remove any trademark, copyright or other notices from copies of the content.

Links to web sites other than and are offered as a service to our readers; we were not involved in their production and are not responsible for their content.

Unsubscribe | Privacy Policy