austin3515

Yup, another allocation. I have had this predicament before and considered doing an amendment that basically says it's a once in a lifetime waiver. But unless you say it's once in a lifetime, it's every year. Another approach is, "is this person really terminated"? For example when they leave in January, is it known that they are coming back for the next holiday season? If so, there might be a case that the person is active.

Take a look at this post that I started. I think you do have problems. Reality is I think a lot of SERP's have this problem, but very few realize it. http://benefitslink.com/boards/index.php?/topic/53313-definition-of-compensation/?hl=deferred+comp+compensation+serp

I agree with ESOP guy. Also, the only problem with restating is you need to watch out for anyone who has already retired and therefore accrued the right to an allocation. You could however make the new provision effective 1/1/2015 with no worries at all (assuming a calendar year plan).

So Tom, you're suggesting that Q&A supports including a zero comp participant who is still active in the ADP test? That just reminded me that Relius always brings in those zero comp people with no term dates. Perhaps that suggests Relius would agree? For example, people on a leave of absence. They are "indirectly eligible" because the only reason they can't is that they had no comp? [of course if we were talking about NHCE's don't be surprised if I use the 0/0 rationale for excluding them - I am such a two-face!]

But there is safey in numbers

Am I alone, that when there is an absence of guidance, and a reasonable interpretation exists (even though it may not be your BEST interpretation), that it would be worthwhile to take advantage of the flexibility? Imagine a plan for example where there is S/E individual and a non-owner HCE making $130K and who contributes 10% of pay. Imagine further that the NHCE's contribute 3% of pay, placing the limit at 5% of pay. Do you a) tell the non-owner that he gets back a refund of $6,500 because "there is no specific guidance and this is "probably" to aggressive; or do you say "there is no guidance and this is at least one interpretation that is reasonable, and therefore you can keep your money in the plan and will have a decent shot at retiring when you want." This is a very realistic set of circumstances. Another variation which is essentially the same is if it is the owners kids, or even the spouse. Why kick them when they're down? Does that serve the common good?? Am I alone here in the land of reason? (sounds like Tom might be with me, and Belgarath seems to think I'll have good company, which is a consolation)

So the EOB is pretty clear that where a W-2 employee has no comp, it is "probably" to aggressive to include as a zero in the ADP test (0 / 0 is either imaginary math or 100%, but probably not zero). It does not address a Schedule C though, which I think is a little bit different as the individual had no control over the outcome. Anyone have any thoughts about whether or not they would include as a zero in the ADP test?

Employee is excluded for half the year as a class exclusion. Plan is top-heavy. Does the participant get the THM for the full year compensation, or just compensation while not an excluded employee.

To me, it seems like the federal thrift plan with an infinite number of complications. Receiving contributions from thousands of employers (potentially)? There is a reason that recordkeepers base pricing on average account balance. It's a lot of work!!

I'm envisioning a recordkeeper style platform where the employer keys in peoples contributions. What happens when there is an over-deposit or the money gets into the wrong account? Is there good customer service? [note: please read the last question with the intended level sarcasm, dripping like an Eskimo in the Sahara dessert).

Here is the IRS's explanation: http://www.treasurydirect.gov/readysavegrow/start_saving/retirementaccountfactsheetenglish.pdf

I was trying to find my post where I wrote more about this, but if you just read what the regs say, thre is nothing to prevent such an amendment. The regs don't say "anything in the notice is off limits." In fact the IRS has said you can amend to add hardships which should have been in the notice. 1.401(k)-3(e) - Plan Year Requirement "1) General rule. Except as provided in this paragraph (e) or in paragraph (f) of this section, a plan will fail to satisfy the requirements of sections 401(k)(12), 401(k)(13), and this section unless plan provisions that satisfy the rules of this section are adopted before the first day of the plan year and remain in effect for an entire 12-month plan year. In addition, except as provided in paragraph (g) of this section, a plan which includes provisions that satisfy the rules of this section will not satisfy the requirements of § 1.401(k)-1(b) if it is amended to change such provisions for that plan year. " In no way, shape or form does the profit sharing allocation method satisfy the rules of 401k12 or 401k13 or this regulation. It just doesn't. All of the controversy regarding this matter is NOT BASED ON A REASONABLE INTERPRETATION OF THE REGS. It is based on comments made by the IRS (yes, including their published notices, which however do not supersede the regs and do NOT say what is impermissible - only what is permissible ). I'm so tired of this topic.

I would based on the fact that means of allocating profit sharing is not a plan provision related to the provisions of 401k whatever the safe harbor section is. I think it generally would negatively affect people even though it would not be a cutback. But in MY Safe Harbor notice, I took advantage of the regs offer to reference the SPD for certain other provisions, so the amendment does not change the content of my safe harbor notice (not that I think that would necessarily change my analysis). I don't like to handcuff my clients unless I am explicitly required to. But I'm sure that is one of the more controversial amendments.

The standard is: Though shalt not make an amendment to any provisions related to the satisfaction of the safe harbor requirements. Who is eligible for the safe harbor to me is clearly related to the safe harbor provisions. So, based on this, I should say "no loosening of eligibility restrictions", right? Once upon a time I may have said that based on my logic above, but now I saw OK. The EOB makes a good point which is that it would be "ridiculous not allow a plan to expand eligibility" because it so blatantly contradicts public policy. Sounds like the IRS applied that logic to their Q&A. I'm with Kevin C on this, I'll amend very many things in a safe harbor plan. There was an earlier thread where I gave a fairly exhaustive list of all the things I would be comfortable amending so I won't restate them here.

I will reserve judgment on whether or not this means competition until I find out what the max is. Presumably it will not be higher than an IRA contribution, in which case I would agree that maybe this won't be so bad. As a matter of policy, the same friend I referenced above who employs a lot of "low skill/low pay" employees has offered to hundred of employees over the past 3 years the opportunity to have payroll deduction IRA's and not one has taken the option. You can't get water out of a stone is an old adage that comes to mind...

Can I do $15K a month?

Did they say what the contribution limit is for these accounts?

It does impact for a small business owner who would otherwise sponsor a 401k plan but decides not to because of this other option. I have a friend who is a business owner who would do this in a heartbeat.

From the ASPPA PAC http://secure.elabs10.com/functions/message_view.html?mid=3011233&mlid=255706&siteid=2010000643&uid=f9b0e0fa57

In case you missed the State of the Union: http://blogs.wsj.com/washwire/2014/01/29/nine-things-to-know-about-obamas-myra-accounts/ I was a very mediocre Obama supporter and sort of scoffed mildly at people who suggested maybe Obama wanted to take over every aspect of our lives. I suppose I am beginning to see it more there way. What an exceedingly bad idea...

I'm inclined to agree with Bird. Imagine for example they had written you must take "at least the minimum" - they didn't say that, they said you must take "the minimum" a term which is quite specifically defined. [As I indicated above I was originally trying to justify the answer I was looking for . The good news for those of us using the Corbel Docs, is that there is a simple way to make this happen. As for a discriminatory availability of installments/ISD's for the owners, to that I say "Hey, you had your chance when you were reviewing my pre-approved document. I have an opinion letter that says I meet all requirements of the code, I am merely operating in accordance with the plan terms." What a fascinating topic, A+ to whoever started it

Tom, I'm confused - you're suggesting the door is open for more, but you seem to have emphasized that part which says "the amount that will be distributed is" which seems to leave no room for increasing?

Permitted disparity at less than the wage base is why you still need to include it in the documents sometimes. We just send our PPA notices to the FBO account plans. I'm prepared to staunchly defend my self if it ever presents a problem that We of course send a statement to the FBO plans at year-end with their vesting. With respect to vesting, we update the vesting with every recordkeeper that we work with, Post PPA (actually 6 years post PPA, or 8 more??) I have a hard time believing that there is a recordkeeping platform that does not track vesting. Are you saying such a recordkeeper exists BG? P.S. I am glad everyone seems to be universally ignoring the three-times-as-silly requirement to disclose each individual security in a pooled plan. Talk about a non-starter. [ok, I know some of y'all are doing it].

Found it. For those of you using Relius Documents, it's included in the text that pops up when you click on the little I in a blue circle that's found on all/most questions. You are no Lame Duck in my opinion. This was huge, thank you very much.

I do find it very interesting indeed. Where do I get that document?