austin3515

I was afraid of that; this is my first one...

Situation: Terminated Plan. Calendar 2009 was filed already and is filing received. All assets liquidated on 7/31/10, and a final 5500 was prepared for 1/1/10 through 7/31/10. In the Plan Info sheet I have the correct date ranges, and I indicated 2010 in the filing year. I used the 2009 form, because this was all done before it was possible to use the 2010 form. When the client signed, he received this error message. "Fail when Filing Header, Form Year does not match Filing Header, Plan Year Begin, unless the Filing Header Prior Year Indicator is set to 1." Anyone know what I messed up?

Plan was terminated effective 1/31/2009. What compensation period do I use for the ADP tesT? Just January, or full year pay? I cannot find anything on point...

http://www.sgrlaw.com/resources/client_alerts/974/ From that article: The PPA amended the minimum vesting requirements for defined contribution plans to require faster vesting of employer nonelective contributions for plan years beginning after December 31, 2006. Before the change, plans were permitted to maintain either a 5-year cliff vesting schedule or a 3- to 7-year graded vesting schedule; but under the amended Code Section 411(a), plans must provide for either a 3-year cliff vesting schedule or a 2- to 6-year graded vesting schedule.

And generally only if you let go more than 20% of the eligible employees. Also note that a 5 year CLIFF is no longer allowed. Not sure if this what you meant. IF your document says 5 year cliff stiill, you need to change it to 3 year cliff, and perhaps you may have under-paid some people since PPA was effective (1/1/08 or so? - not sure exactly...). Most restrictive now is 3 year cliff.

Only need to sign once as plan admin. See page 7 of the 5500 instructions, the "Note" at the bottom of the page in the right hand column. The section is entitled "Signature and Date."

I think you're suggesting that simply because he elected to make a monthly deposit of a fixed amount, even if the deposits were not actually made, you can still include them in the match. I woudln't do this if I were you. Personally, I would use only actual cash deposits made to the Plan. I guess you could make a case for your approach but I think it would be pretty risky...

I would 1) Prorate the k1 2) Use actual deposits for the 401k deposits made. This is important because you don't want to match 401k for the owner if the 401k was made after the SH Match was eliminated.

So Tom - SH Match Plan in a fast food chain. 20 out of 120 people eligible choose to defer (4 of them are the owner and family who max out k every year). During the Plan Year, $4,000 of forfeitures occurred from some old profit sharing money. They can't be used to reduce the SHMatch, so your position is that the Plan (which is top-heavy) now has to allocate out $4,000 to 120 people, which by the way blew your top-heavy exemption, and now the plan must allocate a 3% top-heavy minimum? If what you're saying is true, than the above scenario is inevitable for many plans across the country, isn't it? Should we discontinue our top-heavy plans with the safe harbor match as a precaution against this clearly devestating possibility? I know you are only interpreting what others have said above, but it is so potentially earth shattering an interpretation it just seems like it shouldn't be possible...

That's my point, though? So it makes perfect sense to rely on it? If anyone out there does not believe it is OK to use forfeitures to offset the SH, please let us know!! Tom, did I read into your comments correctly that perhaps you might believe we cannot use forfietures for safe harbor contributions?

But since we have a favorable opinion letter regarding the language, would it not be prudent to rely on that opinion letter?

Corbel's prototype very clearly states that employer contriubtions can be used to offset safe harobr contriubtions. In fact, in order to avoid the top-heavy minimum, this absolutely must be an option (especially for SHMAC plans).

I for one am frustratd that for a plan design that has been around for 30 years or so (i.e., 403b's), it is still unclear whether entry dates can be used. That is insane.

I would be curious to know what their support of this is. They must have done some research. If you ever get it, please post it! ?Maybe they've gotten determination letters from the IRS?

I have to imagien at a minimum 403b's will get ane xtension, espcially those with audit requirments.I would only expect a last minute extension if the sytem crashes from all the 10/15 filers. But I have to say the system worked perfectly fine on 7/31...

It seems to me that you have all the authority you need, as outlined in bullet point 1. It's definitely out.

1.401(k)-3 Safe harbor requirements Paragraph ©(4): (4) Limitation on HCE matching contributions. The safe harbor matching contribution requirement of this paragraph © is not satisfied if the ratio of matching contributions made on account of an HCE's elective contributions under the cash or deferred arrangement for a plan year to those elective contributions is greater than the ratio of matching contributions to elective contributions that would apply with respect to any eligible NHCE with elective contributions at the same percentage of safe harbor compensation. I think what you are suggesting could cause you to violate this paragraph.

I've always understood that the general intepreation of 100% of pay is the lesser of 100% of pay or what is available to withhold (doesn't say that of course, but logic dictates that it is so). For example, another scenario might be that half his paycheck is being garnished for child-support. Can he defer 100%? Certainly not.

Is a schedule C needed for TIAA-CREF plans? Do they have a Schedule C report?

In TIAA-CREF's Auditor FAQ's (which appears to be drafted before Advisory Opinion 2010-01A) TIAA says that some plan administrators are taking the position that terminated participants can be excluded from the participant counts. This is in addition to the DOL's transitional relief regarding contracts as of 1/1/09. Are others using this exclusion? It doesn't sound like the subject matter of 2010-01A is directly on point with this, but when I noticed that properties of TIAA's pdf document indicated that it was last edited in January 2010, I thought I should make sure. It's the last question on page 9 of the attached. tiaa_cref_faq__s.pdf

Yes, typo. I'm not sure I agree with your correllation to the elective deferrals, where people were not afforded the opportunity to defer, because these people WERE allowed to make the contributions.

It's definitely an ERISA plan.

Pre-tax Employee Contributions are mandatory as a condition of employment. According to sungard, these should be treated as nonelective contributions. Also, the employer makes a "matching" contribution for those employees not making the mandatory contribution. In this particular plan, TIAA will NOT accept money unless a form has been signed by the participant. client has not been as good as they should be about forcing them to fill out the form, so there are a good number of people not making these contributions. Can I treat this as a coverage issue? Because the participants did not make the mandatory contribution, the would not be entitled to the match. All of the people who are not making the contributions were provided with the TIAA Forms. I'm honestly not sure what they've done from that point forward but certainly no one was let go on account of this. My other concern is that the program would not be treated as mandatory deferrals, which would mean that they would be considered ELECTIVE deferrals, which in turn means they are subject to 402g, and there are people in the plan doing the full 402g limit in a separate tda.

have her tell the employer in writing she is revoking her authorization to withhold laon payments from her paycheck, and that she is aware that this will be treated as a taxable distribution. This should do it, in my opinion. Some trustees may not agree, but I think many would.