I have a client who is simply wanting to encourage his employees to save. I have not had such a creature cross my path too often. The only two HCE's in his company make well over the comp limit, so their ADP will be in the 6.86% range. He wants to encourage people to defer 10%. Because I am afraid even a rich match won't make it an automatic ADP pass, I am suggesting he use the basic SH match to start with. If he adds a crazy non SH match formula like 0% up to 5%, 100% for 5% to 7% and 50% for 7% to 10%, does that blow up the ACP safe harbor for the basic match portion and I have to test the whole match or do I just need to test the non SH match?

I think I would have a good chance of passing just the non SH match if he can get some people to defer 10% because he and the other HCE will only get a limited portion of that extra because their deferrals cap at 6.86%. If I have to test all matching dollars together, though, it may not go as well.

Due to glitch in shifting over to new payroll system / software, a relatively small division had their 401(k) deferral missed for a single pay period. The employer realized the mistake right away and informed all participants of the problem and that they intended to simply double up on the 401(k) deductions the next pay period so people should anticipate having double taken out from pay the next time and so hold on to the extra pay now.

Anybody been through a similar issue. Is this sort of self-correction possible or would the IRS say they clearly needed to correct by treating the pay period as a missed contribution with the company kicking in 50% of the missed amount?

How would you expect the plan's auditors to react to this corrective action if the overall amount was small relative to the overall plan amounts?

I have an old profit sharing plan ( sole proprietor ) for a physician who left private practice several years ago.

Prototype document.

There is still one employee in the plan.

WE want to close it out and rollover to an IRA for him ( and this is also what the employee wants to do )

Other than sending the tax notices and distribution forms to each of them and doing the distribution to close out the accounts is there anything else that needs to be done ( plan amendments, notices to anyone, etc ) ? Do they need a spousal waiver for a profit sharing rollover ?

I know a final 5500 will be needed.

Just wondering what else I need to do to avoid any IRS/DOL problems down the road.

Many thanks !

the Grinch is reposting the Christmas Song Quiz.

130 pictures to identify the song.

the song list is on the second page on the excel file.

simply type in the number of the song.

the first song is already answered.

the individual who has created most of these has actually increased the number to 150, but then also increased the song list. his website is indicated on the excel sheet. maybe someday I will redo this puzzle to include the additional 20. He did say it was ok to post these.

christmas_puzzles__130_to_solve.xls

Four employees eligible for a profit sharing allocation. Two are older (55-60) co-owners making over compensation maximum. One is 45 year old employee. One is a 35 year old employee who recently (this year) became an HCE.

Owners want max (50K) and level percentage for other two employees. This worked in prior years a both were NHCEs. Now with the youngest employee as an HCE, can't pass testing.

Is there a way to solve this while still keeping it just a cross-tested profit sharing contribution?

Or is the only alternative to add a cash or deferred option?

Or is there another way?

Thanks.

This client of mine is a 403(b)7 client - we are the single provider. Are there any special provisions regarding fee disclosure that I need to be aware of for 403(b)7 plans that is covered under either 408(b)2 or participant paid fee disclosure?

Company A has two retirement plans 1) traditional 401(k) Plan (PYE 9/30) and 2) Prevailing Wage Plan (PYE 12/31). Both Non-Union Plans. Some or all of the employees are in both plans.

Plan 1 excludes compensation received from the Prevailing Wages. I know that I have to test the compensation, however since none of the HCEs receive Prevailing Wages, the group's ratio is 100%, whereas the NHCE group's ratio is 70.42%.

I have not aggregated the plans together, however should I for purposes of this test? If so, what PYE am I suing for the Prevailing wage plan - 12/31/2011?

I need to obtain benchmark data on earnings by retirement plans that do not allow participant direction of investment (all investment decisions have been made by the plan trustee) for years in the period of 2003 to current.

Are there online sources that you can direct me to?

We have a take over plan where the employer deposited the accrued match contribution twice into the participant accounts. The result is that the employer contribution into each participants account exceeds his required match contribution. What is the remedy for this situation?

Client came to us today, December 3rd and asked to be safe harbor for next year. Currently are a 401k plan with match.

Client says December 1 fell on a Saturday, so we should be able to give a notice today, December 3rd and satisfy the notice requirement.

Any thoughts?

Didn't want to insert this in the other active thread concerning Plan Administration, so started this new thread.

Specifically regarding their document system - we currently use the Relius Document system. Wondering if folks here have used the FT William Document system and if so, what is your experience?

We're giving some consideration to switching over from Relius to FT William for documents only - if anyone else has done this, what was your experience? Did the "mapping" project go reasonably smoothly? Is their amendment system/module user friendly and does it work well?

Do they have a good "Pension Library" similar to the Relius Pension Library, with specimen forms, amendments,etc.?

Any and all comments appreciated!

A 403(b) client is insisting that summer camp counselors are excluded from the plan because they exclude anyone who is scheduled to work less than 20 hours per week. They wan to apply this because of the months the people do not work.

Has anyone seen anything 'official' on just what this means? That is, may it be averaged over some period, or some other concept?

A daughter of a deceased employee called. She wants to claim her deceased mother's pension. She lives on the West Coast and we are located in Massachusetts. She is not the listed beneficiary. There is no beneficiary listed on this account.

The spouse is deceased. Our plan document states that we can pay to the spouse and in the case that the spouse is deceased then pay to the Estate. Their is no estate set up. It was closed about 6 years ago and she would have to hire an attorney for a percentage to set it up again to collect these funds under the estate. Is there less then 11K in the account.

Is there any way we can pay this to her directly?

Thanks.

Can 2 unrelated employers recognize both past and future service with each other for vesting purposes?

I know service is recognized within a Controlled Group and/or Affiliated Service Group. However, if there is a relationship or similar business interest between 2 separate unrelated tax-exempt organizations, could service after separating from one be recognized for vesting purposes if immediately go to work for the other?

Both Company A and B will be recognizing service for eligibility, contributions and vesting with each other, but what if an employee terminates company B and goes to work immediately for company A, if the employee is not fully vested in B, can they recognize service with A for vesting service credit and not create a forfeiture until such time as they may terminate from A or vice versa?

Does anyone know if I am allowed to invest in a Roth IRA while on disability (private LTD insurance + social security insurance) or invest in any kind of tax advantaged retirement plan?

Thanks.

We have a safe harbor plan using the basic safe harbor match formula. Plan is top heavy.

The plan is considering amending for 2013 to allow the discretionary non-elective contribution to be allocated putting each employee into their own class.

Assume Participant A defers 5% and receives a 4% safe harbor match.

Assume Participant B does not defer.

Participants A and B are NHCEs. Each meet the allocation requirements for the non-elective contribution, and assume the employer wants to give $0 to each in the non-elective allocation.

Since the plan is top heavy, each must receive a top heavy minimum.

Am I correct in that:

Participant A's top heavy minimum is satisfied with the 4% safe harbor match, does not benefit under the non-elective, and thus is not eligible to receive the gateway?

Participant B must receive the 3% top heavy minimum and thus must also receive the gateway?

If that is the case, then I am assuming the employer could opt to provide $0 non-elective to any participant who receives at least 3% match, and would not need to provide additional gateway, assuming coverage and non-discrimination passes?

Thank you for your assistance.

I read that Potrezibie Consulting claimed they are a leading force behind the reemergence of defined benefit plans across the country.

I wondered which country?

Is it possible for an individual to participate in both a governmental 457(b) and a non-qualified deferred compensation plan of a private employer? Can an individual contribute the maximum annual deferral to the gov't 457(b) and for example $20,000 to the non-qualified deferred compensation plan?

I'm posting this in the multiemployer section because I'm not sure anyone else would have any idea what I'm talking about.

A Taft-Hartley defined benefit plan changed its accrual formula in 2009 to provide that a certain portion of each hourly contribution rate would be "outside" the accrual formula. In other words, for each $1 in contributions, only $.75 would actually earn the member a benefit. The extra $.25 would support the funding of the plan.

This rule was properly put into place for those working under the primary collective bargaining agreement. However, the reciprocal monies received on behalf of those employees who were working out of the area was applied on a dollar for dollar basis.

The group is now trying to figure out how to address the situation. Arguably, the plan could be read to be silent on the reciprocal money. Therefore, the easiest path would be to adopt a clarifying amendment, send notice and deal with the issue prospectively. Others would like to go back to 2009 and retroactively change the allocation formula. This seems like it would invite a host of headaches as some folks have already retired, benefit statements have been mailed and 5500's filed.

Suggestions?

A company is considering terminating a Cafeteria Plan a the end of the year because "participation is low". Despite the obvious fact that more should be done to communicate the plan because it is such a great benefit to the ee's and employer let's say they decide to go through with it. Election frustration and pain over the new $2500 max is driving this one so there is not much I can do to alleviate the insanity at the moment.

Is it as simple as amending the plan document, communicating it to the employees, making sure a 5500 is filed (if required in this case), and distributing any left over funds? What are the ramifications if their new plan year begins 1/1? They are certainly outside the 60 day guideline for communications of this type.