Leaderboard

Catchup 'happens'. One does NOT sign up for catchups. In your case khn, if someone who signed up for catchup terminates before deferring $18,000 in total, what do you do with the supposed catchup? unless you have a limit, if that person deferred $9,000 and elected an additional $3,000 for catch up, then the testing is for $12,000 and no catchup. After all these years I find it surprising that payrolls are still separating catchup because that is a testing issue, not a payroll issue.

What rcline46 said! But there are still "standard" forms out there that suggest that you can sign up for catch-up contributions. Come on, you document providers. Isn't life complicated enough without adding non-existent options for participants? [end of rant. sorry I blew up]

That accountant is talking out of the wrong end if you know what I mean

What about the attorney that helped you during the divorce? If they didn't do their job then, they should help now. Or they might need to be sued for malpractice. That's not something an attorney should have missed.

Check what your Plan Document says about Catch-Up Contributions. In the Plan Doc for our 401(k), Catch-Up Contributions are defined in the Definitions section and in the Employee Contributions section. These sections say the usual things about catchups, namely, that they are elective deferrals made to the Plan that are in excess of any otherwise applicable Plan limit and that are made by Participants who are age 50 or older. The standard set of 'otherwise applicable limits' is listed in both sections. There is no mention of a need for a separate election to make catchup contributions. Unless your Plan document prohibits Participants from making catchup contributions unless they separately elect to make catchup contributions, take your Plan Doc to the vendor and ask them to show you where it says that this person is capped at $18k. Personally, I would ask the vendor if they really want to be making a fiduciary decision to limit Participant contributions (unless the limitation is in the Plan Doc or is an instruction from the Plan Administrator). And then I'd start looking for a better vendor. I'm a little peeved about this, because the change of deferral election form from our plan vendor has a section for electing catch-ups. We stamped "VOID" on the form and made our own deferral election change form. [Oops. I guess my previous post wasn't the end of my rant. My apologies.]

Here is a cite that may help clarify: http://www.irs.gov/Retirement-Plans/Retirement-Plans-FAQs-regarding-Loans#6 Note the part where it says: "Because the law bases Jim’s maximum loan on all of his loans during the 12 months prior to the new loan, there isn’t a significant advantage for Jim to pay off his first loan before requesting a second." Here's a calculator you might find helpful: http://wix-dropbox.elasticbeanstalk.com/link-to-file?instance=LQ4VqWbzSBsC04fG-BMtBOGrPWAycXcQhGfxhqdXuQ8.eyJpbnN0YW5jZUlkIjoiMTM0ODg1NDgtZWIzZS01NDlmLTk2OGItZDY1ZWNkZjJmYzUzIiwic2lnbkRhdGUiOiIyMDE2LTEwLTExVDE3OjE0OjE4LjM3M1oiLCJ1aWQiOm51bGwsImlwQW5kUG9ydCI6IjcwLjIxNC40NS4yMTcvMzM4MzciLCJ2ZW5kb3JQcm9kdWN0SWQiOm51bGwsImRlbW9Nb2RlIjpmYWxzZSwiYWlkIjoiOGY0OWRjMzUtMTg3MC00MGQwLTgxOGEtYjlhOTMxZDFlNTEwIiwiYmlUb2tlbiI6ImY2M2YzNmNlLWRjYmUtMTQxYy0zODY4LWNiYWYyNGJiY2M5YiIsInNpdGVPd25lcklkIjoiZmEzY2E1M2YtNzVlMy00ZDI5LWE0YmYtOWQwM2RlMTU5OWYyIn0&compId=TPWdgt1-mgz&path=%2FDropbox+folder+App%2FLoan+Maximum+Calculator.xls

Ken, The rule is that the sum of the new loan and the highest outstanding balance of any loans in the previous 12 months cannot exceed $50,000.

Minor caution: It can be a payroll system issue. A payroll system should include test(s) to make sure only those eligible for catch-up exceed the 401k limit, and also include the appropriate total (k-limit + catch-up limit). But otherwise, what rcline46 said.

Another vote for get an attorney. I know you said you can't afford one, but this is one of those cases where you really have no choice, you need legal representation. Many attorneys will give you a free initial consultation, at the very least you should take advantage of that and see what they say.

Given that an employer must wait at least 12 months after terminating a 401(k) plan before they are eligible to sponsor a new one, it really doesn't make sense. Perhaps the accountant was confusing the terminology and meant to amend the 401(k) or move it to a different investment platform.

lost power at the house for about 18 hours. not bad. and most of that at night, and not being much of a TV watcher even less of a problem for me perhaps no house damage, that I can tell early in the morning have a nice grapefruit that is partially uprooted, hopefully I can get that back in May God watch over those who suffered worse.

I have received 3 within the last month. I work in the western part of the country within the San Francisco DOL region. We have responded each time that we self corrected and provided them with dates. Each time the DOL has sent a response saying the "case has now been closed".

Maybe Boston doesn't have as many scofflaws as Philly so they have to set their sights lower to meet their quota. If your client is on their radar screenr I recommend they seriously consider filing, especially since its "free" (no user fee) other than your fee for preparing the filing.