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what is guaranteed is that such election forms are never back dated. they might have been sitting in a desk drawer and no one else knew about them, but the election was certainly made ahead of time wink wink nudge nudge.

If the auditors are just putting that BS in the Management Letter you can explain it away as just their attempt to justify the outrageous fees they charge (they have to find something wrong). If they're putting anything in the footnotes to the financial statements which get filed with the 5500 that's a whole different ballgame and they should be called to task (throw back in their face the wonderful accounting principle of "materiality).

I don't think the titling itself is going to blow anything up, as long as it is coded properly in their system and you maintain the RMDs. The wording you describe is perhaps a bit awkward but I think it gets the message across ok. Nothing official/just my two cents.

Thanks CBZ, I was going to repeat that. Send, withhold taxes if required, re-issue checks if necessary, issue 1099-R's and repeat annually - that is the plan's obligation. A letter/notice to participant from the IRS might change his/her disposition but until then, the plan needs to comply even w/o cooperation.

The regs are quite specific A partner's earned income for a year is deemed to be currently available on the last day of the partnership taxable year. As a result, a partner in a partnership (or sole proprietor) may not make a salary reduction election after the last day of the partnership or sole proprietorship taxable year after the last day of that year. [Treas. Reg. § 1.401(k)-1(a)(6)(iii)

It is done in lieu of refunds. If the calculations support HCE A receiving an ADP refund of $4,000, but they have not used up their full catch-up limit for the year, the $4,000 is reclasssified as catch-up instead of being distributed to HCE A. What should NOT be done is reclassifying catch to all the HCEs at the beginning of the test. just because HCE B only deferred $5,000 and is over age 50, and 100% of their deferral would fit within the catch-up limit does NOT mean it should proactively be classified as catch-up to give them an ADP of 0% to help the test at the beginning. The reclassification to catch-up only only occurs in lieu of refunds. The ADP test is performed AFTER catch-ups are reclassified due to the 402(g) limit. So the scenario only applies to people who are age 50 or older and deferred less than the 402(g) limit + mac catch-up. Hope that helps.

Like most plan related questions, the answer is "what does the plan say?" If the plan says the $500 minimum applies to recurring distributions, then allowing smaller recurring distributions would be an operational failure. If the document language isn't clear, then it needs to be interpreted by the person the document says has the authority to interpret the document. That is normally the ERISA Plan Administrator, which may be the employer.

I hear you! If I was only able to bill for all the times I’ve had to say “it’s not a match”.......

You should let that TPA find a different profession.