austin3515

Not sure if this was intentional, but your link is to this very thread

Interesting question from a college. They have some employees who might take one or two classes a semester. Our Corbel 403b document says: © Student Employees. If the Employer elects in its Adoption Agreement to exclude Student Employees, the exclusion applies to students performing services described in Code §3121(b)(10). §3121(b)(10) says: (10) service performed in the employ of— (A) a school, college, or university, or (B) doesn’t apply if such service is performed by a student who is enrolled and regularly attending classes at such school, college, or university; Would it be unreasonable to have a policy that those taking one or two classes a semester do not regularly attend? It just seems like such a common situation that someone must have come up with a workaround!

Amen

yes, my post could have been more clear on that point. Just ED's. It occurred to me that why I am so surprised by this fact is because the darn thing is referred to as "UNIVERSAL availability." Talk about a misnomer. It should have been called "galaxy cluster" availability.

I spoke with Corbel and they said the only nondiscrimination/coverage requirements that apply to 403b is universal availability, and that is applied to each entity separately. So you can have all your HCE;s in entity 1 covered by a 403b and all your NHCE's in entity 2 with no 403b and that would not be a problem. Of course I assume each entity has to employ it's own true employees so I'm sure if this outcome was arbitrary each individual entity would be jeopardizing its TE status. In other words your entity structure presumably has to be tied to operations.

The 2nd entity is a subsidiary.

So someone just blew my mind. Is it true that if 2 501c3's are under common control (in fact in my case, it's a parent subsidiary situation) that you do not have to have both organizations covered by the plan? In other words, universal availability applies only to each entity completely independently? Would just regular coverage apply, or does that even apply?

I went back and look at the original language provided and it does not reference Nonelective Account - it just the "Account" - which of course makes sense because match counts towards the THM. Are you referencing PT language? IT's the VS that we think this applies to ("we" because I don't think I am the only one).

I'm surprised because I honestly felt it was a good interpretation of their document which was also supported by the regs shown above. But are you suggesting that perhaps you were not clear about referencing the VS as opposed to the PT?

Interesting to hear you say that, as we have often theorized that almost all DOL "whatever you call thems" originated with a participant complaint. In my opinion though, it just seems like it would make more sense to walk in the door as their "friend" and then only "attack" after you've proven they're a crook. I know depositing 401k timely is a big deal, but I don't think depositing 401k haphazardly (i.e., once every month and a half) throughout the year warrants a federal "investigation" (certainly not based solely on the phone call of a disgruntled employee). Interest, penalties, etc., etc., all fair game, but all of that could result from an "audit." Now let me beat you to your response - I'm not defending the person who deposits 401k once every month and half, it's wrong. It's just a matter of degree, assuming we all agree that "pulling a Madoff" on plan assets would be 12 on a scale of 10. With that as the benchmark I rather think my scenario is a 2 or a 3 at the most. That's just my 2 cents

Corbel's definition clearly leaves the door open: (l) Disaggregation and otherwise excludable employees. Notwithstanding anything in this Section to the contrary, the provisions of this Section and Section 12.7 may be applied separately (or will be applied separately to the extent required by Regulations) to each "plan" within the meaning of Regulation Section 1.401(m)-5. Furthermore, the provisions of Code Section 401(m)(5)© may be used to exclude from consideration all Nonhighly Compensated Employees who have not satisfied the minimum age and service requirements of Code Section 410(a)(1)(A). For purposes of applying this provision, the Administrator may use any effective date of participation that is permitted under Code Section 410(a) provided such date is applied on a consistent and uniform basis to all Participants.

I would think the document would have to be worded in such a way that you have the flexibility. The document certainly could indicate use of plan entry dates.

401kAZ, I've often wondered why the DOL chose the "Investigator/Investigation" terminology as opposed to "auditor/audit" which employers are much more comfortable with. After all, investigations tend to take place after some suspected wrongdoing (at least that's how it works on Law and Order ) . I understand that approach for those employers/fiduciaries who have abused their role as fiduciaries (e.g., not sending in 401k for a prolonged period), but why not "open an investigation" after wrongdoing is uncovered during an audit? I think at the end of the day the DOL "investigations" are very comparable to an IRS audit, and my experiences with the DOL auditors has been very agreeable, so from my perspective it is an "investigation" in name only - functionally it is really an audit. But it does certainly start off as more of a confrontation. I've had clients ask me if they need an attorney to represent them, which of course they do not (assuming normal circumstances). I'd be curious to hear your perspective.

Did you read all of the posts above Lou S.? We all would have said the same thing before the post started. I don't think it as simple as you suggest.

But it's not an irrevocable election, it is a mandatory employee contribution. I think there is a difference, don't you?

I looked at my PT from Corbel as well and in our prototype the key definitely gets the 3% THM from Er Contributions. I suppose it's a question of whether or not that approach is mandatory, and it seems to me anyway that is not (of course it's mandatory to do what the document says). I agree it, must be a VS document, or maybe it's the PPD version of the prototype (as opposed to the Corbel version). What a great discussion.

And it raised a question for me on 403b's. 414h seems to indicate that mandatory employee contributions can only be pre-tax for governmental agencies that sponsor these pick up plans and meet a whole slew of requirements. So, now I look at the TIAA 403b document and it allows for mandatory employee contributions. Yet the plans are sponsored by 501c3's. Are these supposed to be after-tax? Is there another exception out there for 403b plans?

Well how about this, how about I just always file 5500's for the plan. Seems silly to pay a fee if I have yet to miss a deadline.

So you interpret Corbel's document language above to require a 3% ps to a key who deferred 3%? I don't see anywhere that Corbel has excluded the deferrals for purposes of the minimum allocation. Recall that at the beginning of the paragraph, the THM goes to ALL employees: "the sum of the Employer contributions allocated to the Account of each Employee". As such, if there is some adjustment to keys calculation it must be stated. Note that it is very clearly stated with respect to the non-keys.

I did use the DFVC once for a plan that never filed the top-hat, but we went back for 3 or 4 years on that one. This one, the 5500 is not late. Everything I have read until all of your posts is that the top-hat filing was in lieu of 5500's - no top-hat = 5500 filing requirements. So I'm surprised at these responses. Has anyone ever seen a nice long article that describes what to do in these situations?

Oh, and please let me know if there is anyone who has written up how to prepare a 5500 for a nonqualified plan. This happens to be a 457.

OK, so if I missed that stupid 120 day window, what do I do? Plan is effective 1/1/2013, calendar year plan. Can I just file the 2013 5500 and then file the top-hat filing?

Their answer is in the context of this question: M-20 Q. May elective contributions be treated as employer contributions for purposes of satisfying the minimum contribution or benefit requirement of section 416©(2)? The first part of their answer is "yes, for keys...". Combine that with the wording in the Corbel Document which is perfectly lined up with that interpretation and you have me convinced it is so, however ridiculous.

Same here Bart. I got really excited for a minute about non-shareholder physicians and then realized, nope, they're not keys. So really it changes nothing for me, but I suppose it makes me a better TPA for having known it.

1.416-1 Questions and answers on top-heavy plans. M-20 Q. May elective contributions be treated as employer contributions for purposes of satisfying the minimum contribution or benefit requirement of section 416©(2)? A. Elective contributions on behalf of key employees are taken into account in determining the minimum required contribution under section 416©(2). However, elective contributions on behalf of employees other than key employees may not be treated as employer contributions for purposes of the minimum contribution or benefit requirement of section 416. See section 401(k)(4)© and the regulations thereunder. This Question and Answer is effective for plan years beginning after December 31, 1988. I am dumbfounded right now... Found this reference in the EOB. Practically it is of little consequence, but this is quite interesting indeed.