Gilmore

I found the benefits attorney's comments on the previous page most amusing. Usually when things get "simplified" we work even harder.

Thanks very much!

Happy Holidays. I was wondering if anyone out there had an excel formula for calculating the basic safe harbor match. Thanks!

Thanks Tom, I appreciate your help. Actually, even if you don't check the Gateway test option it still includes Gateway test language on the discrimination testing reports. Relius just told me to ignore it for pre-2002 plan years. But actually, it was that Gateway test option that got me to question whether the top heavy only ees needed to be considered benefitting or not benefitting for purposes of running the testing. As I read your response I understand that, yes, they should be considered benefitting and the 3% contribution is tested along with the other groups' contributions. Thanks again for your help.

In my original question I stated that the plan year began November 1, 2001. So for the plan year ending 10/31/2002 I'm assuming that I don't need to be concerned about the Gateway. Does this mean I can give the NHCE with less than 1000 hours just the Top Heavy contribution? And to further the question, and I am using Relius Admin software, when I run my compliance tests do I run the cross test with that NHCE as benefitting or not benefitting? Relius has a new test called "Minimum allocation Gateway" or something like that, and when I check that option it automatically puts the Top Heavy only receiving ee in the test with her top heavy contribution. Is that correct? Thanks for the help.

Sorry if this one has been beaten to death but... I have a cross-tested profit sharing plan, plan year end is October 31, 2002. There is one participant who worked less than 1000 hours and will be getting a top heavy contribution. It is my understanding that for this plan year I don't have to worry about the gateway. But... In looking forward to the next plan year, would I need to raise the participant's 3% top heavy contribution to 5% to meet the gateway? Thanks.

We have been sending reminders throughout the year. Our last reminder was sent the beginning of October with "Final Reminder" in big bold letters across the top. In addition to plan disqualification we also described the fines that were put in place for those plans that missed their February 28th deadline. This last letter got us in most of the stragglers. And with the smallness of the pension world I would much rather lose a client than be known as a firm that will tolerate anything being backdated.

Mav, I spoke to Gina at DATAIR on Wed. of this week. Thanks for checking and I'll await your answer.

Hey Maverick, I spoke with DATAIR, our document provider and they said no way date the GUST restatement for later than 2002. Nothing like swimming in muddy water.

We have a client with a December 31, 2002 deadline for restatement. It is a 401(k) plan and they are considering amending to a Safe Harbor Plan effective January 1, 2003. I called the IRS help line to see if one of the following was acceptable so that we could incorporate the restatement and Safe Harbor amendment at the same time. First choice is to make the restated document effective January 1, 2003, of course making sure that it is signed and submitted prior to December 31, 2002. We have, up to now, used the first day of the plan year, 2002 as the effective date for all our restatements. I received a favorable DL for a plan with an effective date of July 1, 2002 already. Second choice is to make the effective date January 1, 2002, and since they obviously did not met the notification requirements for 2002, the plan would need ADP testing, which they were already prepared to do anyway. The agent on the help line thought that either option would be acceptable, however he lacked the conviction I was hoping to hear. I would certainly appreciate anyone elses thoughts.

I'm not sure if this helps, but we submitted a few plan terminations in 2001, before we got our GUST docs, using GUST amendments we received from the IRS and they all received favorable termination letters. It could be that they were more lenient because the plans were terminating and the GUST docs were not available at the time.