austin3515

I have an update - Cite: 1.414(q)-1T (A-9)(b)(1)(iii)(B) (B) Percentage exclusion provision. If 90 percent or more of the employees of the employer are covered under collective bargaining agreements that the Secretary of Labor finds to be collective bargaining agreements between employee representatives and the employer, which agreements satisfy section 7701(a)(46) and § 301.7701-17T (Temporary), and the plan being tested covers only employees who are not covered under such agreements, then the employees who are covered under such collective bargaining agreements are not counted in determining the number of noncollective bargaining employees who will be included in the top-paid group for purposes of testing such plan. In addition, such employees are not included in the top-paid group for such purposes. Thus, if the conditions of this paragraph (b)(1)(iii)(B) are satisfied, a separate calculation is required to determine the number and identity of noncollective bargaining employees who will be highly compensated employees by reason of receiving over $50,000 and being in the top-paid group of employees for purposes of testing those plans that cover only noncollective bargaining employees. My summarization In other words, I think it is very clear that this exclusion does not apply AT ALL for the union plan. Therefore, when determining the number and identity of HCE's for the union plan, the non-union employees would be included in the calculation - the calculation essentially ignores any distinction between union and nonunion for purposes of determining HCE's in the union plan. Agree? Anyone?

Anyone have any thoughts on this question?

SunGard's response on the match was that it was a no-go because the features of the SHMAC and discretionary match were different, i.e., distribution restrictions, etc. It's funny because it did occur to me that I could try submitting for a DL, because obviously if I can give them zero I can them less. Thanks everyone,

According to Sungard Corbel, the answer is "no" this is not possible.

I can exclude HCE's from SHMAC. Can I provide them with a lesser match instead of no match at all and still maintain the ACP Safe Harbor? I'm trying to maintain the current match for the HCE's and give the NHCE's the SHMAC.

After reading Tom Poje's post from a couple of days ago, it is clear that they actually made things easier. Ilene's article led me astray. See below: There is one alternative to the "operating at a loss" rule. This requirement does not apply if a notice is given as part of the safe harbor notice at the beginning of the year that is a variation on the "maybe" notice discussed above, which our friend, Derrin Watson, suggests should be called the "Maybe Not" notice. Under this option, the plan that is a documented safe harbor plan as of the beginning of the year would provide as part of its notice (i.e., before the beginning of the plan year) that the plan might be amended to remove the safe harbor during the year. For the record, I still think the timing is ridiculous.. Thanks,

Apparently the IRS is taking its cue's from HHS, throwing a new rule for 2014 SH Notices that people have been sending out since October 1. Bravo IRS. Bravo. Thank you for adding a terrific incentive for employers NOT to provide a Safe Harbor Plan to its employees by making the burden for discontinuing a costly and generous benefit so high. http://www.ferenczypaul.com/Documents/FlashPoint/11_15_13_FlashPoint_.Treasury_and_IRS_Finalize_Rules_on_Suspending_Contributions_to_Safe_Harbor_401k_Planpdf.pdf

That is priceless... It's almost as though they do not realize that taxpayers see a notice from the IRS and automatically assume there must be a problem.

I have set up non-calendar year plans for the sole purpose of getting around the "stub" period in the 4th quarter. What you're doing is basically the same thing, even if your objective really was just to switch to a calendar year. Whether by sheer coincidence or good plan design consultation, it is legal either way.

I think the attorney should have been more clear. Allow me to elaborate: "Termination of the plan needs to occur prior to 12/31/13" It is true that the Plan should be terminated as of 12/31/2013, and that this resolution should be executed prior to 12/31/13. This means a resolution needs to be signed terminating the plan, indicating that after 12/31/13, no further benefits shall accrue. "These contributions need to be made before the existing plans are terminated." In my opinion, what he is referring to, is simply the fact that the Plan will not be fully terminated (as separately defined for 5500 reporting purposes, when all plan assets are distributed) until all of the contributions have been funded and subsequently distributed. I would go back to the attorney and ask if this is what they meant. Perhaps he/she was just rushing and not carefully considering the practical implications of their words (a sin which many "so called" ERISA attorneys are guilty of - not the real ERISA Attorneys, of which many contribute on these boards - only the "so called" ones.

Since the Plan does not include any Safe Harbor, it would not be an amendment to the safe harbor provisions. I think that would be as sound a reason as any. I think one possible pitfall would be if your safe harbor notice was specific regarding who would receive the Safe Harbor Contribution if it ever came to pass. So if your notice says "All eligible participants would receive the SHNEC, if any" as opposed to something more vague like "the Plan might be amended to provide a Safe Harbor Nonelective Contribution." With the latter you wouldn't be going back on a promise you made earlier.

I have never heard of the PT rules coming up for a participant loan transaction. I suppose if it was egregious, perhaps. So if he/she took a $100K loan over 10 years, I suppose I would be more concerned then the owner not making the required payments on an otherwise qualified loan. The former example is more a "loan to a party in interest" than a true participant loan.

Thanks indeed. Very worthwhile for clients who are already have been filing. Is it possible that they were more efficient during the shutdown than before or after?

We're getting notices from the IRS for plans that DID file for 2012, reminding them that they need to file again for 2013. Is anyone else getting these notices and/or does anyone have any insight into why they're sending these? At first I thought perhaps they would send to just those who filed in 2011, but not in 2012. But the ones we have received DID file in 2012.

I'm going on the assumption that the document author made an interpretation that this was allowable. I would not write my document this way, but "they" did, and although "they" are not my favorite provider (putting it politely) they are a big player in the 403b market. So I'm comfortable deferring to their judgment on this one. But you do have me convinced with your cite that I will never write a document that way.

Yes it is, and the Plan Document includes provisions for Er Contriubtions, so the author clearly new it was subject to ERISA.

That is interesting... But alas, I have a document that says to do just that, in black and white.

QDROPhile, you read my mind with your edit. I was just coming out here to ask for it

I have the same question now... I was intrigued by the reference to 4975(10) There do not appear to be any parameters, so perhaps we can apply the beloved "reasonableness standard." See below. I also found an article from Groom Law Group that said it was ok to reimburse the employer (subject to plan terms of course), but if it was outstanding for more than 60 days you needed an interest free loan document. They did not reference any sites. (10) receipt by a disqualified person [i.e., the Plan Sponsor] of any reasonable compensation for services rendered, or for the reimbursement of expenses properly and actually incurred, in the performance of his duties with the plan, but no person so serving who already receives full-time pay from an employer or an association of employers, whose employees are participants in the plan or from an employee organization whose members are participants in such plan shall receive compensation from such fund, except for reimbursement of expenses properly and actually incurred;

I have a 403b document ("widely" used by a lot of 403b's) that states in black and white - "Forfeitures shall revert to the Employer." Thoughts? When I saw this, the first thing that occurred to me is that the following is in 401(a)(2) (OK, I had to look for the exact reference!) which would not apply to a 403b plan--hence, it WOULD be possible. (2) if under the trust instrument it is impossible, at any time prior to the satisfaction of all liabilities with respect to employees and their beneficiaries under the trust, for any part of the corpus or income to be (within the taxable year or thereafter) used for, or diverted to, purposes other than for the exclusive benefit of his employees or their beneficiaries Just curious to know if anyone has seen this.

If what you're saying is true, here is a great plan design - give the HCE's a matching contribution = 200% of the first 5% and a nonelective of 10% of pay! That can't possibly be true, can it?

Believe it or not, I have a check box next to the deferral types, that I could uncheck and have no deferrals. Not sure what that would say on a diagnostic check, but it seems to me if deferrals were mandatory it would say so in the adoption agreement, and it appears not to.

403b plan covers only HCE's, and 401k plan excludes HCE's. Both plans have uniform match. I assume I can aggregate the ACP Test? Both plans provide for same nonelective contribution, which I assume would still be able for the design based safe harbor (or at least aggregation is permitted for testing, which will pass because everyone has same allocation rate)?

403b Plan effective 12/1/2013, with a pye of 12/31/2013. My concern is that the 415 limit would have to be prorated down to $4,250 plus catch-ups of $5,500. OK, I can generally avoid by making the plan effective 1/1/2013, but is that possible in a 403b plan (i.e., a retroactive effective date)?

I've never heard of a PEO where the employees are not the common law employees of the recipient. I assume we are talking about the likes of ADP and PayChex, where the PEO does not for example hire and fire people.