austin3515

So I shouldn't say "jpod told me this won't work"

I don't think its a stretch - I think the point is, make sure the total comp including the benefit is not an "overpayment". So we would need to be able to justify the comp in total. Are there 3 people with the same position as the spouse? Is her "total comp" $75K while theirs is $40K?

Non-profit sponsors 401k. Executive Director's spouse is an employee (and is an NHCE). What's stopping me from giving the spouse a big generous profit sharing contribution, all the way up to the 415 limit? I can't do it for the ED because he is an HCE. Assuming ED is happily married, isn't this a clever way to give this guy an extra contribution? I don't think there is anything in the Internal Revenue Code stopping me (my Doc allows for different allocation rates for each employee, and we're on the PPA Volume Submitter). Is there some non-profit law that perhaps someone knows of that will trip me up? In other words, it sounds too clever, too cute, and therefore, perhaps, too good to be true? Or do I add this to my non-profit plan design repertoire?

29 CFR 2510.3-2 (f) Tax sheltered annuities. For the purpose of title I of the Act and this chapter, a program for the purchase of an annuity contract or the establishment of a custodial account described in section 403(b) of the Internal Revenue Code of 1954 (the Code), pursuant to salary reduction agreements or agreements to forego an increase in salary, which meets the requirements of 26 CFR 1.403(b)-1(b)(3) shall not be “established or maintained by an employer” as that phrase is used in the definition of the terms “employee pension benefit plan” and “pension plan” if I think after-tax would sink you ERISA exemption.

ACP Test still applies. I have a feeling after-tax would probably subject the plan to ERISA too, you'd have to read the fine print of the ERISA exemption. Might be limited to collecting salary deferrals and remitting to custodian.

No one has mentioned the ACP Test yet. In my experience, after-tax is generally DOA in a qualified plan because a) you should obviously max out Roth before doing after-tax, and b) most NHCE's will never do that. So now you have HCE's who presumably have already maxed out their Roth who wish to contribute even more on an after-tax basis. But that will never pass the ACP test.

According to GW, everything will show as of 12/31. I am inclined to agree with you.

I LOVE Great West. They are making it happen today. They really are something else!

In this case, we added Roth conversions just befor Christmas but the recordkeeper has not been able to set them up still. Obviously can't process a distribution until it is on the plan. But the point is, nothing really happens. No money is leaving the plan. In essence it is not different than a pooled account just because there happens to be a bigger fancier computer on the other end. IF this was a true cash distribution, different story. Something is actually happening. But with an in-plan conversion, nothing legally happens beyond the election itself.

How is it possible that they didn't spell this one out. Unbelievable...

When is an in-plan roth conversion taxable? All the IRS Notice says (2010-84) is "it is generally taxable when the distribution occurs" which I think is ridiculous because there is no distribution. Obviously I have an 11th hour request from a client. Any value in having them make the election effective as of today? What if the plan was in a pooled account (this one is daily val anyway, but the point is that an entry on a computer should not have any affect on when it is taxable).

I actually sent him the 415 site above and said "here is regulatory support for your answer" and he said "thanks for sending this."

There are soundwaves yes. There might not be ears to detect them but there soundwaves. And from what I've heard, lawyers have ears everywhere.

But that's just it though isn't it? Why would there be no reason to question the prudence of these investments?

That was my original argument, but I think the original sin of course was perhaps to put themselves in that situation in the first place. I presented that exact analysis to an ERISA attorney and his response was that if any new money went to the plan after 1/1/09 that it would be subject to all of the fiduciary standards. .

We talk in hypotheticals all the time that are grounded in reality. Obviously you would not put such language in an IPS, but I found your hypothetical language a realistic incarnation of exactly my dilemma. Fiduciary responsibility with no ability to do a darn thing about it. If you're trying to answer my question it is completely lost on me. Do you or don't think there is an issue here for fiduciaries of these old TIAA contracts?

ok, now we're getting somewhere. You think fiduciaries of these old tiaa contracts are just screwed?

you get the match for the first 3 quarters, but not the 4th quarter. I'm sure "that's not fair" isn't your argument

I'll throw it back at you and say "what should the IPS say?" Surely the answer to this question is the same question that I am asking. What if the IPS did include some arbitrary criteria that did require the elimination of a fund. What then? So it stands to reason that the answer to my question must be known before you can draft an IPS. But I agree there is nothing more to discuss...

I happen to think it's a reasonable question. You may have knowledge/opinions about the appropriateness of these funds that a CFO/HR Director might not possess themselves. So if you were the fiduciary you would obviously be able to satisfy yourself. What obligation have they make those determinations? I think it's irrelevant whether or not the funds are any good. As we all know, past performance is not a guarantee of future results. So the wise fiduciary performs ongoing reviews.

I'm saying that if they meet my requirements that they will necessarily have comp paid in that quarter and therefore will not have any excess contributions under 415. the match is pretty small so even one paycheck would give me plenty of cushion.

A1: We love TIAA-CREF funds, so that's not the issue. But do they even have to be reviewed, and if the answer is yes, just what should the client do in the event that a fund does stink. A2: None, I assume. I'm asking about the ones still under the Plans investment contract., A3: The client is trying to figure out what the heck they need to do. So it's not really hypothetical, it is a very real dilemma faced by my client.

That actually helps my position, thanks! 415 should not be an issue as anyone who meets the conditions will have comp in the following plan year. Thanks!

If fund A is a dog, what obligation does the trustee have to replace fund A with Fund B. And of course legally they have no ability to do that. So the fiduciary responsibility of monitoring plan investments and making sure they are appropriate. IT seems to me there is a perpetual failure because the original failure was to enter into a contract under which the fiduciary is unable to exercise his or her legal responsibility.

Fidelity said they will take it. Use regular applications and sign for participant and put a note that "I'm signing on their behalf because the participant will not respond... and I'm required by law to put this money in an IRA for them."