austin3515

Maybe I'm just too nitpicky, but I got two QDRO's in one week (both from Oklahoma, I think there is a connection here!) where the award is worded as follows: "50% of benefits accrued during the marriage, plus or minus any gain or loss on the award up to the date of distribution..." To which I responded to the attorneys, "That's just cooky. If you meant to say 50% of the account balance as of a date, you would have just said that." So what does this language even mean? For example, It seems to me that I would need to add back any distributions because the award is 50% of the BENEFITS ACCRUED adjusted only by gains/losses. Oh, and what happens if I don't catch a break, and they were married AFTER participation in the Plan began. That would be buckets of fun. Is this an Oklahoma thing? I've been reviewing QDRO's for a long time and its first time I've seen this language.

Exquisite!!!

The answer is of course "no" but still I'm looking for something in writing that says "403b's need not concern themselves with that limitation, and as such if your contributions exceed 25% of eligible comp, that's no problem." I'm honestly surprised I can't find an article on point. But admittedly the plan where this coming up is " very unusual."

Your loan payments can be suspended up to a year for any leave. This is from the regs, but it is actually written in a pretty straight-forward manner. § 1.72(p)-1 Loans treated as distributions. Q-9: Does the level amortization requirement of section 72(p)(2)© apply when a participant is on a leave of absence without pay? A-9: (a) Leave of absence. The level amortization requirement of section 72(p)(2)© does not apply for a period, not longer than one year (or such longer period as may apply under section 414(u) and paragraph (b) of this Q&A-9), that a participant is on a bona fide leave of absence, either without pay from the employer or at a rate of pay (after applicable employment tax withholdings) that is less than the amount of the installment payments required under the terms of the loan. However, the loan (including interest that accrues during the leave of absence) must be repaid by the latest permissible term of the loan and the amount of the installments due after the leave ends must not be less than the amount required under the terms of the original loan.

I tried to read it but it was gobbledygook.

Any reason why a 403b plan cannot contribute more than the max deductible? So two people make $100,000 each. Can they each get $50,000 in profit sharing? That's 50% of comp. I'm inclined to say no because, duh, they are not deducting anything. But the closest I can come to guidance is through the process of elimination. I want something more concrete, like a McCay Hochman article or an IRS FAQ. Anyone? (assume reasonable comp is not an issue as that is a matter for the CPA to address and not me!).

Is there something hard I can point to? It does seem a little insane that this is such an interesting question! But I like the "quarters ending in 2015" approach better than between.

I'm trying avoid sloppy plan drafting Do you think the "on or between" makes it unambiguous?

Sounds like a ridiculous question, but would the values of 5 and 10 (i.e., the end points of the range) be included? So if the plan says: "For the calendar quarters ending between 1/1/2015 and 12/31/2015 the employer will contribute 15% of pay, and subsequently the employer will contribute 5% of pay." Does the calendar quarter ending ON 12/31/2015 fall between 1/1/2015 and 12/31/2015? As you can see it could make a big difference. Should I be writing "ending on or between" or is that over-kill. I googled for about 10 minutes to try and find something on point about this but to no avail. The Dictionary.com definition was not too helpful. 2. intermediate to, in time, quantity, or degree: "between twelve and one o'clock; between 50 and 60 apples; between pink and red."

Cafeteria Plan. You're going to tell me the documents should make it clear?

Company give a $250/month allowance to its employees. If employees benefit premiums come to $300 per month, there is a $50 deduction from their wages. If their benefits come out to $50 a month, they get $200 "bonused" to them as income. 1) I am pretty comfortable that the cash bonus is a taxable fringe benefit (although I know not everyone will agree, perhaps). 2) I am much less comfortable with the following question: If the employee spends the $250 per month, is the $250 considered wages for purposes of 415 comp OR is it employer paid medical benefits which would NOT be comp.?

yes and yes. We;'ve been running on net comp for years now.

Tom, an actuary's got nothing on those math skills!

Ah yes, I remember it well...

This has been one of my favorite threads in a long time... I don't follow the math (I'm pretty sure it was all made up except that I felt I recognized some of it from high school algebra), but it was hilarious anyway. I went back and looked at it again. I'm thinking the algebra is all true but the equation was never "equal" in the first place. Did I get it?

BRB, I'm running out to Staples

That's it, thanks! (3) Anti-abuse provisions. This section and §§ 1.401(k)-2 through 1.401(k)-6 are designed to provide simple, practical rules that accommodate legitimate plan changes. At the same time, the rules are intended to be applied by employers in a manner that does not make use of changes in plan testing procedures or other plan provisions to inflate inappropriately the ADP for NHCEs (which is used as a benchmark for testing the ADP for HCEs) or to otherwise manipulate the nondiscrimination testing requirements of this paragraph (b). Further, this paragraph (b) is part of the overall requirement that benefits or contributions not discriminate in favor of HCEs. Therefore, a plan will not be treated as satisfying the requirements of this paragraph (b) if there are repeated changes to plan testing procedures or plan provisions that have the effect of distorting the ADP so as to increase significantly the permitted ADP for HCEs, or otherwise manipulate the nondiscrimination rules of this paragraph, if a principal purpose of the changes was to achieve such a result.

If Tom told me 2 +2 was 5, I'd go buy a new calculator

Does anyone have a good template or article on BR&F testing for a match formula based on YOS that has a 1,000 hour/last day rule? Specifically, my question is, do I need to treat people who termed as not benefitting in the higher match rates solely because they terminated (with more than 500 hours). So in my case, the match increases after 5 YOS from 50% of 6% to 100% of 6%. If someone with 7 years terminates, do I need to treat them as not benefitting in the higher rate of match? Since it's coverage testing, I presume the answer is yes.

New client has been excluding pre-1/1/09 contracts for participant counts, but NOT the assets. This is a plan where the pre 1/1/09 contracts will push them over the audit requirement. Is amending the 5500's for the past 5 years the only option available? And presumably if we amend the past 5 years of 5500's to remove 40% of the plans assets that might be a red flag...

Can someone point me to the reg that was added to the final 401k regulations that essentially said "hey, no funny stuff--even if a literal interpretation of the regs says its ok, you can't monkey with stuff in such a way that it impacts the testing." I know in practice it can essentially be ignored, but I'm running an ADP test on net op and we have someone clocking in at 1,000 percent (they're deferring 90%, so 90/10 = 900% (she has 125 pre-tax premiums to boot pushing her over 1,000%). I'm just concerned this might be a situation where the IRS might employ this vague rule. I believe it was the IRS response to the bottom up QNEC, which smells like what I have here.

(ii) Under the alternative method set forth in this section, by contrast, an employee's statutory entitlement with respect to eligibility to participate, vesting and benefit accrual is not based upon the actual completion of a specified number of hours of service during a 12-consecutive-month period. Instead, such entitlement is determined generally with reference to the total period of time which elapses while the employee is employed (i.e., while the employment relationship exists) with the employer or employers maintaining the plan. The alternative method set forth in this section is designed to enable a plan to lessen the administrative burdens associated with the maintenance of records of an employee's hours of service by permitting each employee to be credited with his or her total period of service with the employer or employers maintaining the plan, irrespective of the actual hours of service completed in any 12-consecutive-month period. I should have read it first. I think this paragraph closes the loop for me. I assume others agree?

What I am missing is a clear link between the language of 410(a) (which clearly references the max as 1,000 hours in 12 months) and the use of elapsed time to determine OE's. So for example, if 410a said "if the Plan counts hours, then 1,000 hours in 12 months and if the Plan uses elapsed time, then 12 months" I would have no concern. But it doesn't say that. I'm just surprised that there isn't something clear in the regs that makes this easy to figure out.

Why can I? I certainly like that position. Is it clear anywhere that I can use it for this purpose?

It doesn't of course, I'm merely demonstrating that a common assumption (e.g., if you let an OE in the test who doesn't belong, the testing would only be hurt) is not necessarily true. I have seen lots of TPA's base their exclusions on DOH and DOB alone.