![]() ![]() The Employer will determine, in its discretion, the amount to be released from the "transferred suspension account." However, the minimum amount that shall be released from the "transferred assets suspension account" for any Plan Year is the percentage of the account based on the following table: ![]() If the Plan does not provide for Nonelective Contributions, then the amounts released from the "transferred assets suspension account" pursuant to the provisions of this Section shall be allocated to each Participant eligible to share in allocations in the same ratio as such Participant's Compensation bears to the total Compensation of all Participants eligible to share in allocations. The amounts transferred into this Plan shall be held in a "transferred assets suspension account." Amounts released from the "transferred assets suspension account" pursuant to the provisions of this Section shall be allocated in the same manner and to the same Participants that Employer Nonelective Contributions are allocated, as described in Section 4.3. The Employer may transfer an amount to this Plan from the Employer's terminated defined benefit plan in accordance with Code §4980(d)(2)(B). TRANSFER OF ASSETS FROM TERMINATED EMPLOYER DEFINED BENEFIT PENSION PLAN The volume submitter doc used for the SH 401(k) PSP has the following provisions: am hoping you will consider the following and reply? In light of the 2017 Prop Treas Reg published. As such, with participants bumping up against the 415 limits, why would you want a 401(k) provision at all? But most I've seen are worried about having so much in the QRP suspense account that emptying it within 7 years is a real concern. I suppose there are some documents that provide for some sort of dribble out of the QRP suspense account. I note that the use of a SH 401(k) document as a QRP is somewhat internally contradictory. I lean strongly toward being able to use QRP suspense account funds. Whatever happened to the general rule that "if it isn't prohibited, you can do it"? And nothing in the language of the PPA document I've looked at makes that connection. However, Tom's original question is whether the general prohibition on use of forfeitures to fund SHNEc's carries over to a similar prohibition on the use of a QRP's suspense account to fund the SHNEc's. I acknowledge that forfeitures are precluded by document language from being used to fund SHCEc's. Instead, the restriction is specific to forfeitures. SHNEc's don't have that specific language. QNEC's and QMAC's specifically state the requirement that they can only come from monies which are 100% vested when contributed to the plan. What is interesting is that the PPA documents I've seen draw a fine line distinction between the two prohibitions. ![]() Every PPA document I've seen, of course, has the QNEC requirement that they can only come from monies which are 100% vested when contributed to the plan. I would guess that those that don't have the SHNEc restriction constitute a mistake on the part of the IRS. Pre-PPA (a/k/a GUST) documents frequently allowed forfeitures to be used as SHNE contributions.Īs noted, MOST PPA documents now restrict the use of forfeitures to fund SHNEc's. Given the IRS general lack of flexibility on safe harbor plans, I'm not sure where they would stand on this question. At the very least, I'd put it to the employer to use ERISA counsel to make the decision. Short of requesting a PLR on this specific question, it seems like "you pays your money and you takes your chances." I would be a little hesitant (as I typically am) to take the aggressive stance and say it is allowable. However, he doesn't address your specific issue of whether those funds can fund the safe harbor non-elective contribution requirement - and this specific question was not asked in the PLR's, nor did the IRS address it. However, he also makes the statement that a safe harbor 401(k) plan may be treated as a qualified replacement plan. Sal references a couple of PLR's - 201147032, and 201221059, where the IRS specifically ruled that the transferred funds couldn't be used to fund matching contributions, as you mentioned. ![]()
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