austin3515

Our Corbel document says you can limit ALL HCE's based on the same limit (can't pick and choose) but this administrative limit needs to target passing the ADP test. And yes, the limit does allow for catch-ups. So if you limit someonme making $245,000 to 5% of pay, they can contribute 5% of pay PLUS $5,500 and only 5% of pay is in the test. This is defintiely in EOB somewhere. I can find it if need be. It's a plan imposed limit AS LONG AS the document includes the kind of language I referenced above.

When the balance is that low the highest balance in the previous 12 months is a moot point, because the $50,000 limit is no where near an issue. In your examples, maybe the $50,00 limit will drop to $48,000, which is way higher than the 50% limit. Some plans will allow only one loan. If the Plan allows just one loan, then refinancing is the only option. If the participant is taking the max available, then the entire new loan must be repaid wihtin 5 years of the original loan. But the refinancing rules are more complicated than I care to get into... For example, if the new loan is small enough, then the participant might qualify for a new 5 year term.

Kevin C, Thank you thank you thank you.

Not one of your responses has addressed the question I have posed.

I'm familiar with the concept of overpaying for something. I'm not going to bother asking the same question a different way, because I just can't imagine making the question any more straightforward. I had requested that the assumption be made that the CPA's fees are reasonable. Or are you suggesting that the per capita fee can be anything as long as on a plan level the fee is reasonable? How about $500 a person (TPA fee = $1,500 and there are three participants)?? The fee is reasonable, but is it reasonable to do this? The point is at what point is it unreasonable solely because the per capita number is so high? I said I wouldn't reask the same question, but I guess I done did it anyway.

No offense, but really??

Assume for the sake of argument that the CPA's fees are dirt cheap, and very very reasonable. And we've done everything we possibly can to get the counts down to avoid the audit - mind you, this whole project is part of the plan to get out of an audit. Does the mere fact that the per capita fee is extremely high make it unreasonable? That is the question.

Terminating wouldn;t work, and they ahve more than 100 ee's so no SIMPLE's...

Out of curiosity, does anyone have a litmus test for determining whether or not a fee is reasonable? So for example, if the per capita fee for administration comes out to $250 a head (plan has a CPA audit), is that reasonable? Many people have accounts between $5,000 and $6,000 so this works out to be a hefty percentage of their accounts (north of 5%). In this situation, the sponsor WOULD send out a letter to the participant indicating that this fee is going to be assessed beginning on, say, April 1, and anyone who closes their account before this date will not be assessed the fee. My other concern is that this could be considered coercive. The client REALLY wants to get the counts down, which is why we are having this discussion. The crux of my question really is whether or not there is an quantitative guidance regarding whether or not the AMOUNT of the per capita fee is reasonable.

Would computer programming (some of which is custom for individual clients) be considered a service? I think it would since capital is not a material income producing factor...

If a participant is part of an excluded class, than by definition they are not eligible to participate in the plan, so yes their deferrals would stop. The fact that they satisfied eligiblity means the plan must be able to pass coverage treating them as not benefitting. Most plans use the rule of parity. If yours does than to look for a rule other than the rule of parity that talks about recognizing past service is frankly a waste of time. That's the applicable rule.

Definition of a QNEC (401 (m)(4)©). says it must meet the requirements of paragraphs B and C. The problem appears to be that hardship is not listed under (B). I realize that it is somewhere else as an exception for 401k contributions, but apparently not for QNEC's. Does anyone think I have the analysis correct here? (B) under which amounts held by the trust which are attributable to employer contributions made pursuant to the employee’s election— (i) may not be distributable to participants or other beneficiaries earlier than— (I) severance from employment, death, or disability, (II) an event described in paragraph (10), (III) in the case of a profit-sharing or stock bonus plan, the attainment of age 591/2, (IV) in the case of contributions to a profit-sharing or stock bonus plan to which section 402 (e)(3) applies, upon hardship of the employee, or (V) in the case of a qualified reservist distribution (as defined in section 72 (t)(2)(G)(iii)), the date on which a period referred to in subclause (III) of such section begins, and (ii) will not be distributable merely by reason of the completion of a stated period of participation or the lapse of a fixed number of years; <A name=k_2_C>© which provides that an employee’s right to his accrued benefit derived from employer contributions made to the trust pursuant to his election is nonforfeitable, and

My Corbel EGTRRA 401k says: "HArdship distributions are NOT permitted from a participant's QNEC Account (incluidng any 401(k) Safe Harbor Contributions) or QMAC account." No elaboration regarding age 59 1/2. So I'm thinking that if there was an option to qualify it based on age they would have.

I have the same question for Money Purchase money - i.e., participant is over the NRA, but plan does not allow for in-service distributions. I believe the answer is NO to both questions (based on the document) but it seems silly not to allow it in thse situations.

Plan allows hardships, but not in-service distributions. Can a participant age 62 take safe harbor money in the event of a hardship?

Here's a ha ha... My dopcujment was referrign to a short plan year. Read too quickly, and gosh I hate those attorney drafted documents

Got a plan that has a lot of terminated participants. Plan has never paid any fees before. LEt's say our fees are $1,000 and there are 50 people in the plan, so per capita, the fees are $20 per person, and the sponsor wants that $20 to come from the terminated particpant accounts only (not the actives). Now, I know that this is a workable scenario under that FAB thingamabobber. My concern is that participants have never been told specifcially about this fee. The SPD says administrative expenses could be paid by the plan, but no one was ever told that there was a $20 annual fee. The more I think about it, the more comfortable I am with it, but I just wanted to see what people thought. P.S., the plan is NOT participant directed.

Believe it or not, I have a document that I just read to today which requires proration of the wage base for a new entrant. NEver seen it before though.

1) I know my current worksheet works, and if I change anyting, because I'm compulsive, I'll recheck the numbers multiple times before I'm comfortable again. 2) I will just have to change it back presumably in a year 3) It makes no difference. But that's just me

I refuse to update my spreadsheets for $2. Even 2$ time 25% is till just $.50.

Doing a 5500 SF and 100% of plan assets are invested in a singe mutual fund, which is a qulifying plan asset. But the SF does not ask if more than 20% of assets are in a single security. Is this just an oversight in the form? I obviously prefer the SF route and I can't find any reason that I'm not eligible... I just read through the eligiblity again, and thre is no requirement that there be multiple qualifiying plan assets; only that there be ONLY qualifying plan assets.

I don't think the union people get the THM. You should double check that before you finalize your figures for the client. I'm too busy to look it up for you!! Actually, if memory serves, I think it's actually "union people are not required to receive the THM" so it would be a document issue. I remember the Corbel GUST document did not explicitlyu excluded the union people from the THM, but they always said that you could "assume they should be excluded." I think they fixed it in EGTRRA.

We signed them. Recall that service providers were always able to sign the 5558's until they eliminated the stupid requirement.

Do yoiu have a site regarding 404c applying on a participant by participant basis? That's the crux of my question.

Let's say a client sends their fee disclosures to everyone with account balances (despite our advice that everyone needs to receive it). Do they blow their 404© for the entire plan? Sungard mentioend that one of the implications of not complying was a loss of 404c protection. I'm just curious if not sending it to this one group would blow 404c, if they otherwise complied.