QKA 1 EXAM QUESTIONS AND ANSWERS
When can you add adp safe harbor and match contributions to a plan if its a calendar
year plan and you want to add for current year ?
When adding a 401 ( k ) feature to an existing profit - sharing plan , you can add a
matching safe harbor for the initial year provided there are at least 3 months in the plan
year . A nonelective safe harbor feature can be added up to the last day that the return
of excess contributions are due ( 12 months following the end of the plan year ) .
Formula that satisfies traditional ADP safe harbor
The tradition ADP safe harbor matching contribution must be, for each rate of deferral,
at least equal to 100% of the first 3% of deferrals plus 50% of deferrals on the 2% of
compensation deferred. A fixed matching contribution of 100% on the first 3% of
compensation deferred, plus 75% on the next 3% of compensation deferred satisfies
this requirement.
Design based allocation method using permitted disparity
If integration level is 100% of TWB, max disparity percentage is 5.7%
What's included in annual additions?
Elective deferrals, employee after tax contributions, ER contributions, forfeitures
Cross testing allocations are designed based safe harbor method ?
False
, When must compensation be paid to terminated employee?
2.5 months after severance or end of limitation year in which employment terminated
You can reduce or suspend safe harbor when
You provide notice to pots at least 30 days prior to change
Amendment
Ppts have reasonable time period to change elections
SH contributions made through effective date of amendment
Operating at economic loss
EACA
Eligible Automatic Contribution Arrangement.
QACA
Qualified Automatic Contribution Arrangement
When can safe harbor non elective be added to a plan?
Can be added as late as last day of year
If using matching safe harbor contribution when can this be added?
Plan must be amended prior to beginning of plan year
If establishing a new plan, when can this be done?
Must be three months prior to end of year
SH plan notables
- SH plans have additional cost and less flexibility
- would have to amend existing plan
- annually plan required to match or nonelective to NHCE
- must notify ppts annually
- plan doc must include provisions
Limit for annual additions
Lesser of 100% of compensation or statutory dollar amount, for 2022 its 61k
Defined by plan limitation year defined in plan doc- 12 month period
When can you add adp safe harbor and match contributions to a plan if its a calendar
year plan and you want to add for current year ?
When adding a 401 ( k ) feature to an existing profit - sharing plan , you can add a
matching safe harbor for the initial year provided there are at least 3 months in the plan
year . A nonelective safe harbor feature can be added up to the last day that the return
of excess contributions are due ( 12 months following the end of the plan year ) .
Formula that satisfies traditional ADP safe harbor
The tradition ADP safe harbor matching contribution must be, for each rate of deferral,
at least equal to 100% of the first 3% of deferrals plus 50% of deferrals on the 2% of
compensation deferred. A fixed matching contribution of 100% on the first 3% of
compensation deferred, plus 75% on the next 3% of compensation deferred satisfies
this requirement.
Design based allocation method using permitted disparity
If integration level is 100% of TWB, max disparity percentage is 5.7%
What's included in annual additions?
Elective deferrals, employee after tax contributions, ER contributions, forfeitures
Cross testing allocations are designed based safe harbor method ?
False
, When must compensation be paid to terminated employee?
2.5 months after severance or end of limitation year in which employment terminated
You can reduce or suspend safe harbor when
You provide notice to pots at least 30 days prior to change
Amendment
Ppts have reasonable time period to change elections
SH contributions made through effective date of amendment
Operating at economic loss
EACA
Eligible Automatic Contribution Arrangement.
QACA
Qualified Automatic Contribution Arrangement
When can safe harbor non elective be added to a plan?
Can be added as late as last day of year
If using matching safe harbor contribution when can this be added?
Plan must be amended prior to beginning of plan year
If establishing a new plan, when can this be done?
Must be three months prior to end of year
SH plan notables
- SH plans have additional cost and less flexibility
- would have to amend existing plan
- annually plan required to match or nonelective to NHCE
- must notify ppts annually
- plan doc must include provisions
Limit for annual additions
Lesser of 100% of compensation or statutory dollar amount, for 2022 its 61k
Defined by plan limitation year defined in plan doc- 12 month period
