Bubbles LLC is a web design company that operates out of Boulder, Colorado. Mark and Jeff started Bubbles twenty years ago and it has grown to be one of the more sizeable web development firms in Colorado. Bubbles offers a 401(k)/profit sharing plan. The plan has the following characteristics: Eligibility: age 21 and one-year of service Match: dollar for dollar match Vesting: 20% per year (years 1 through 9) Highly compensated definition: uses top 20% election Profit-sharing contribution: Bubbles generally makes a sizeable contribution, but the percentage varies. The plan permits rollovers from other qualified plans and IRA EE# Employee Ownership Age Tenure Salary Deferral 1 Mark 60% 48 20 Years $200,000 $10,000 2 Jeff 30% 49 20 Years $150,000 $15,000 3 Chad 6% 33 15 Years $75,000 $5,250 4 Josh 4% 42 10 Years $85,000 $5,100 5 Alex 0% 58 8 Years $60,000 $0 6 Shay 0% 29 6 Years $75,000 $4,500 7 Lisa 0% 53 4 Years $50,000 $0 8 Alison 0% 19 2 Years $60,000 $0 9 Chung 0% 25 8 Months $24,000 $0 10 Chau 0% 19 6 Months $18,000 $0
Bubbles LLC is a web design company that operates out of Boulder, Colorado. Mark and Jeff started Bubbles twenty years ago and it has grown to be one of the more sizeable web development firms in Colorado. Bubbles offers a 401(k)/profit sharing plan. The plan has the following characteristics:
-
Eligibility: age 21 and one-year of service
-
Match: dollar for dollar match
-
Vesting: 20% per year (years 1 through 9)
-
Highly compensated definition: uses top 20% election
-
Profit-sharing contribution: Bubbles generally makes a sizeable contribution, but the percentage varies.
-
The plan permits rollovers from other qualified plans and IRA
|
EE# |
Employee |
Ownership |
Age |
Tenure |
Salary |
Deferral |
|
1 |
Mark |
60% |
48 |
20 Years |
$200,000 |
$10,000 |
|
2 |
Jeff |
30% |
49 |
20 Years |
$150,000 |
$15,000 |
|
3 |
Chad |
6% |
33 |
15 Years |
$75,000 |
$5,250 |
|
4 |
Josh |
4% |
42 |
10 Years |
$85,000 |
$5,100 |
|
5 |
Alex |
0% |
58 |
8 Years |
$60,000 |
$0 |
|
6 |
Shay |
0% |
29 |
6 Years |
$75,000 |
$4,500 |
|
7 |
Lisa |
0% |
53 |
4 Years |
$50,000 |
$0 |
|
8 |
Alison |
0% |
19 |
2 Years |
$60,000 |
$0 |
|
9 |
Chung |
0% |
25 |
8 Months |
$24,000 |
$0 |
|
10 |
Chau |
0% |
19 |
6 Months |
$18,000 |
$0 |
A. What type of qualified plan is Bubbles LLC?
B. Who is not eligible for the 401(k)?
C. Who is highly compensated?
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