austin3515

Bill - I LOVE IT!!! Thanks,

Nope, we do that. They need to go home and think about which investment to choose, and then we never hear from them again. I want them to be comfortable signing the form before they walk out the door. And GMK, I'm not sure the fact that you have "a small plan" (i.e., one) who can handle it, doesn't really discredit my conclusion. What about your other small plans?

They have financial advisros for that. Believe me, I thought about the default percentage too, 3%, something easy to commit to, just to get them in the door.

I see a major difference between handing someone a form and waiting for them return it, as opposed to handing someone a form, waiting a few weeks, and then setting up a payroll deduction for them if they don't respond. I know it doesn't sound like much, but if you worked with small employers you would know that this is totally unrealistic.

I am strongly opposed to auto enrollment. Most of my clients will totally louse that up and wind up with lots of liability. I have a handful who have a sophisticated HR DEPARTMENT where they do this and can handle it. The rest are small (or even relatively large) employers who just don't have the resources to implement such a complicated endeavor.

I have this "theory" that people who WANT to defer take their forms home and never get around to filling it out because it is a lot of information to stew, particularly with respect to selecting an investment. So my theory is this: Send out enrollment forms, pre-filled with names and all other indicative information. The deferral election section will indicate that unless "I have decided to make alternate elections to invest in one of the other investment options in section 2, I have affirmatively elected to be invested in the Balanced Model" or soemthing to that affect. I just think that this one little thing (i.e., all I need to do is say how much I want to contribute, and sign) would be enough to break the resistance enough to increase participation. Any thoughts on whether this constitutes an investment election eligible for 404© (i.e., and avoid the QDIA rules)?

Nassau - You referenced the exact paragraph of the internal revenue code that creates this requirement in your subject - 402(f). See paragrpah (f) http://www.law.cornell.edu/uscode/html/usc...02----000-.html

No - it was ineligible for rollover.

I'm partial to this thread http://benefitslink.com/boards/index.php?s...ic=47730&hl=

Plan allows in-service distriubtions in the form of installments, following age 59 1/2. I know the timing of an in-service distriubtion is a protected benefit - is the installment form of payment protected? I don't think so, but thought I would check.

Let's say two TPA firms merge together and the resulting company is a new entity entirely, with a new name. Does that affect either firms favorable opinion letter? Would the merged company still be considered the prototype sponsor of the legacy documents?

It does help, thank you! I also found in the EOB that "restorative payments" resulting from fiduciary breaches would also be subkect to those same rules (which is slightly more on point).

Do you think I would call myself Austin Powers if this was a "sophisticated" arena

CPA is asking if the lost interest on late deposit of 401k contributions is deductible. Any citations I can point him too?

Here it is: 1) Contributions (other than elective contributions described in section 402(e)(3), section 408(k)(6), section 408(p)(2)(A)(i), or section 457(b)) made by the employer to a plan of deferred compensation (including a simplified employee pension described in section 408(k) or a simple retirement account described in section 408(p), and whether or not qualified) to the extent that the contributions are not includible in the gross income of the employee for the taxable year in which contributed. In addition, any distributions from a plan of deferred compensation (whether or not qualified) are not considered as compensation for section 415 purposes, regardless of whether such amounts are includible in the gross income of the employee when distributed. However, if the plan so provides, any amounts received by an employee pursuant to a nonqualified unfunded deferred compensation plan are permitted to be considered as compensation for section 415 purposes in the year the amounts are actually received, but only to the extent such amounts are includible in the employee's gross income. So I think it would be in then, correct? I still think the only way it would be out is if fringe benefits were excluded. The 414s safe harboe exclusion for fringe benefits lists "deferred compensation.

I also thought the 415 regs regarding deferred comp related to post termination. BUT, deferred compensation is a fringe benefit, so if you're document exlcudes fringe bnefits (based on the 414s safe harbor) then it is out.

Here's my advice: Don;t study. They won't tell you the grade anyway. I was a sucker, and studied a lot. I like to think I got an A, but may have gotten a C- for all I know...

I was grasping for straws and seeing what I could grab onto My trustee is on vacation until after 2/28 (I sent the documents a few weeks ago!!). Looks like we'll need to track him down - hopefully he's got his blackberry with him! Regarding the RAP, I studied for the ERPA, knew that was an area that to me is incomprehensible!! so studied hard, and still cant figure out how that darn thing works (But I did pass the tests...)

Tom - In my case, the Safe Harbor would be effective on the 1st day of the Plan Year (March 1st). But now I'm wonderiong if I can't still argue that I do have the remedial amendment period. Not having the Safe Harbor language is a disqualifying provision (actually, it;s the absence of a required provision, which I think is the same thing), so under the RAP, do I not have until 12/31/2010 to cure it? Or is the cited reg written so stringently as to render the RAP null and void?

Why would someone have two separate plans, for Davis Bacon, one for everyone else. -Plan is not top-heavy -Audit is not an issue (i.e., the immediate eligiblity issue)

Asked and answered From §1.401(k)-3 Safe harbor requirements (2004 final regulations): (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 section 401(k)(12) 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. Moreover, if, as described under paragraph (h)(4) of this section, safe harbor matching or nonelective contributions will be made to another plan for a plan year, provisions under that other plan specifying that the safe harbor contributions will be made and providing that the contributions will be QNECs or QMACs must also be adopted before the first day of that plan year.

Under the remedial amendment period rules, you have until the last day of the plan year to amend a plan for a discretionary provision that is effective during that plan year. Since I am not required to be a safe harbor plan, the amendment must be discretionary. Therefore, don't I have until February 28, 2012 to amend the plan to add safe harbor for the FEbruary 28 (29th?), 2012 Plan Year? The SH notice was sent out in min-January.

http://benefitslink.com/boards/index.php?showtopic=47988 It dawned on me that the question I posted yesterday is strikingly similar. The only difference is that in my case, we never asked for it. The fund company said they were giving it to us (they actually just sentt he check). Also, the compensation is so ridiculously small, you would think it satisfies the reasonable comp test almost by default. Anyway, thought I'd make the connection for everyone.

I guess the opther avenue is that it might violate the "reasonable compensation" exemption for service providers. What is the service for which you are obtaining this wind-fall? I'm sorry, did you say "nothing"? Perhaps that is not reasonable! Maybe that's what one of your cites was referring to, but I didn't feel like looking it up

I'm a little lesss sure of my orignal answer, but I'm going to go with "use of plan assets by a disqualified person." The TPA will be getting a benefit as a direct result of those plan assets. The fact that it is indirect would not give me much comfort.