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Depends on my mood. I might use 002 or 003. 001 seems like it is setting up for just what BG describes, which I'd rather avoid.

I would say 002 for a couple of reasons. First, a spin-off results in a new plan. Second, if you use 001 and use the 86 effective date, you will certainly need to explain at minimum what happened since your last filing of 001. Didn't that Plan "go away" after the merger with the MEP ADP Plan? 002 with a current effective date is cleaner and doesn't create questions about missing 5500 Forms, IMHO.

Definitely overthinking it; not an issue at all.

my point exactly, I didn't see the -11g issue either I'm going to guess you are probably ok (obviously no one knows the future. if you pick someone partially vested they could quit next year, while the new ee may work 20 years) certainly the IRS concern would be picking the lowest paid ee who is either terminated or never will work 1000 hours or something like that. The IRS did recently try to require plans with every person in their own group could only rely on the ratio % test, which would prevent situations like this from arising. I think they sum it up best, yes you can pass mathematically but is that a reasonable interpretation of the intent. of course the testing rules were put in place before the idea of 'each person in their own group' was imagined, so maybe someday things will catch up.

No. Its not an issue. It does not favor the HCEs. The only reasonable way to look at this to see if HCEs are favored is looking a deposits YTD A simplified example. 1 HCE and 1 NHCE. NHCE gets funded over 10 payroll dates during the year, HCE gets funded once after the end of the year. Deposit HCE HCE YTD NHCE NHCE YTD 1 0.00% 0.00% 10.00% 10.00% 2 0.00% 0.00% 10.00% 20.00% 3 0.00% 0.00% 10.00% 30.00% 4 0.00% 0.00% 10.00% 40.00% 5 0.00% 0.00% 10.00% 50.00% 6 0.00% 0.00% 10.00% 60.00% 7 0.00% 0.00% 10.00% 70.00% 8 0.00% 0.00% 10.00% 80.00% 9 0.00% 0.00% 10.00% 90.00% 10 0.00% 0.00% 10.00% 100.00% 11 100.00% 100.00% 0.00% 100.00%

the only cautionary note is that a few years ago the IRS (just because the numbers work it might not be reasonable) it does not sound like you have a failure and are correcting under -11g irs comments on nondiscrimination.docx

As Cuse Fan notes, there is absolutely no problem "cherry picking" for the best result. However, I think it important to note that the person who is getting the allocation must be vested at some level for the -11g allocation to meet the regs. If you have a 2/20 vesting and this guy only has one year and is 0% vested, you can't use him UNLESS (and this is what we do), in addition to the allocation in the -11g, we also through in a 10% vesting on the guy who is otherwise 0% vested.

I vote for 001 and original 1986 effective date since it is a spinoff of the same plan. I also don't think it will matter if you start using 002 and still keep 1986 as the effective date, but I would use 001. Also, there doesn't seem to be a predecessor service issue (there is no EMPLOYER predecessor; ADP was never the employer - it looks like the same employer since 1986). Likewise, I don't think there is any question that you are including all service (at least since 1986).

I will revise my earlier post to agree that if the plan document can be reasonably interpreted as not conferring a protected benefit on HCEs under a uniform allocation formula, as when there is something in the document (AA) at least suggesting that the amount of discretionary matching contribution to be contributed for one or more HCEs can be a separate discretionary amount than the discretionary amount to be allocated to NHCEs, then I acquiesce to that reasonable interpretation. My intention had been only to suggest that such liberty does not automatically flow solely from the presence of the word "discretionary" immediately prior to the word "matching," and that further inquiry is necessary to determine if that discretion extends to things like the allocation formula and the allocation conditions. If no discretion is to be found in those latter contexts, there exists the possibility that HCEs have a protected benefit. I have heard of employers taking liberties that contradict plan language on the theory that a "discretionary match" means I can do whatever I want because I am the boss and it says "discretionary match." Under that theory, I could even exclude NHCEs, perhaps just those that live in a certain zip code. I speculate that the Ft. Wm. document excerpt that refers only to "excess contributions" in the second enumerated item might deliberately exclude any mention of "excess aggregate contributions." I would be reluctant to rely on that language in the context of ACP, but only because I'd rather be safe than sorry. In contrast, I would be delighted if a preapproved AA were to have an option providing that HCEs were not required to receive any "discretionary match" (even when the NHCEs receive that match), but that the employer could nevertheless choose to make a separate discretionary match for any HCE in an amount that would not exceed any limit on that HCE imposed by any applicable nondiscrimination test. I know that many plans have specific language saying that you can avoid a 415 failure by NOT contributing or allocating the full amount required by a contribution or allocation formula (but, if you do actually do allocate an excess annual addition, then you must correct via EPCRS). Some plans have interesting language with regard to ADP SH contributions for HCEs, i.e., HCEs are technically excluded from the arrangement, but the employer has the discretion to operationally add them back (not to exceed the amount that would be contributed if they were a NHCE). It appears to me that such language is structured so as to avoid any anti-cutback issue. [I don't know why my font size changes midstream when I cut and paste from my clipboard (and please don't clutter this thread with a response on that issue). I'll figure it out at another time. I've been trying to make all of this response have the same bigger font size as it appears in the first two paragraphs.]

There has been an uptick in fraudsters impersonating regulators, not only EBSA and IRS but also banking, insurance, and securities regulators. It’s frequent enough that last year the Financial Industry Regulatory Authority sent securities broker-dealers an alert about the problem. And some fraudsters use techniques much smarter than those your client described to you. There are many ways to get rid of a faker while not offending a caller who is a legitimate government inquirer or investigator. Among them, one can respond that the person the to-be-examined fiduciary will assign to respond to the inquiry or investigation will initiate her own communication with the regulator. It’s unnecessary to ask for a telephone number or even a name because an experienced person already knows how to communicate with the regulator and get the status of a matter.

Lou S. and Fiduciary Guidance Counsel have won the prize on this one. There are old insurance plans without loans which do not have trustees. ANY asset (loans) outside the insurance contract requires a trustee. Would not surprise me if Mutual of America had issued some of these. PNJ

If the plan was designed properly and the fringe contributions are made properly, they absolutely should be counting as offsets for both your Safe Harbor and your profit sharing contributions. I work exclusively in the design, testing, and compliance of prevailing wage retirement plans, if anyone has additional questions let me know. Jason Sperfslage jsperfslage@beneco.com