austin3515

I think you should consider hiring a TPA. No offense (believe me) is intended, but anyone who doesn't know the answeers your very basic question should not be doing this on their own. It's a recipe for disaster, big time. By the way, who's restating your document for EGTRRA? Who's amending it for PPA? Let me guess, you have no idea what I'm talking about, right? I'm sure you are excellent at your given trade, but it's not worth doing this on your own to save $1,500 a year...

If the match is calculated based on deferrals and match for the entire plan year, then you should calculate the maximum match based on the annual comp limit. So if for 2009 the match formula is 100% of 3% then the match should stop once the participant reaches $245,000 x 3% (I don't have a caluclator). If the match is calced every pay period per the document, then technically, you should be prorating the comp limit for each pay period so the max comp for each weekly pay period would be 245,000 / 52 (no cite for you, probably in the a17 regs). I think practically speaking, most people just apply the same logic as described in the first paragrah in both scenarios.

If a client wants to suspend RMD's for 2009 (whcih is an optional amendment) is required to get union approval for that change?

I was surprised that the document did not address this point specifically, but alas it did not...

Doubtful at best...

Guy names his 2 adult kids as 50 / 50 beneficiaries of a sizeable account. Few years later he gets married, and makes no changes to his beneficiaries. Few year's later he dies. And now, of course, there are law suits being filed since the account was very large. Does the marriage supercede the prior beneficiary designations? It seems that the answer is yes, but our client is asking us to provide some "hard-proof." Anybody have anything that might help? Someone must have sued about this before!!

Does corbel's prototype include that "contingnent on distributing the safe harbor notice" language? If so, can someone point out the language?

If they didn't indicate what the contribution would be, then it wasn't a safe harbor notice anyway. 30 days before the beginning of the Plan Year means you're deemed to meet the timely notice requirement. But facts and circumstances could still indicate that you're ok even after that window. In my opinion, if the employer is still deciding whether or not to be a safe harbor, that would be a factor that might suggest delaying the notice was OK. I think the date of the first payroll would also be a legitimate factor to point to (the later in the year the better). If the notice is not provided, does that kill the SH? I can't recall if that has been answered in EPCRS yet or not, and I don't have time to look it up .

If you're a safe harbor plan, there are some extra i's to dot and t's to cross. I think as long as your a safe harbor for the full plan year before the short plan year, as well as the one after, you're OK.

With respect to how it was handled in the past, the fact that it was done wrong 3 years ago is no reason to do it wrong again. It seems like MOST people seem to agree that hired on 1/2/09 = plan entry on 1/1/2010. I just can't find an explanation for making them wait until 7/1 (assuming the coincident language is in ther...

I've always thought it was pretty cut-and dry and dependent on whether or not the word "coincident" is used. If the language says " employee becomes a participant on the entry date COINCIDENT with or next following satisfying eligibility", then: 365 days from January 1, 2009 and is January 1, 2010 (non-leapyear). This, of course is COINCIDENT with an entry date and therefore, this is when they come in. Some documents simply say "employee becomes a participant on the entry date next following satisfying eligibility" SO: 365 days from January 2 and is January 1. The plan entry date NEXT FOLLOWING the date eligibility is satisfied is July 1!! I've always found it hard to believe that every attorney in the couintry is drafting eligibility that leaves any room for interpretation.

Huh? Why did it go from 5.00 to 4,500? You lost me there... But no, there would be no basis for crediting ADP refunds as ACP refunds. You're only hope would be if it happened to be from a pooled account, since there is nothing in the distribution pointing to ACP (ok, maybe the paperwork..). But it might help to know how all of a sudden the numbers changed...

I just ran some quick numbers and I have determined that the odds that this is a random audit are slim to none... My guess is the DOL already knows everything you've just told us. Isn't this the number one source of audits? A participant calling the DOL to complain about no money being sent in? Might not be a bad idea to call an ERISA attorney (on the qt of course, I woudn't defer to counsel yet!!) Also, I've not heard many stories of the auditor actually calling to announce an audit... Maybe they wanted to hear your client's initial reaction?

But of course the 3% SHNEC satisfies the THM (OK, almost always...)... 1) Comp as a participant 2) dual eligibility are the two situations where that would not be the case...

Interesting that you mention that point, which I think is absolutely crucial (though not to the OP;). If the Plan Year has not yet ended, and the sponsor must avoid a top-heavy minimum, plan termination solves the problem. Where this is important is if the Plan wants to discontinue it's safe ahrbor mid-year. If the Plan is top-heavy, plan termination is required to avoid the THM.

a) there';s no last day rule on the safe harbor, so it would be a cut-back. b) I got the impression from the "OP" that the goal was to not receive the SH. He/she phrased it as "Does he owe anything for himself?"

Don't know how you could legally do that... Cut-back rules apply to the owners too. Here's a thought though, you know how they deem Sched. C comp to be earned on the last day of the plan year? You could use that to your advantage here, and say the Plan is terminated before he was credited with any comp! I like it...

P.S. is it worth being subject to that insane bane of the small employer's existence - top-heavy?

I'm looking for a good write-up on what the paid prepare penalties rules means for the TPA, particularly when we encounter clients who are looking to bury things in the sand (for example, business owner strapped for cash takes a loan, but misses a payment). Once upon a time, it's been said that as TPA we are not the Pension Police. Is that basically what this new rules says? We are the pension police? In other words, not even a CYA letter will help?

Anyone have a good web-site that summarizes all of the state's withholding rules, particulalry those with mandatory wtihholding?

Sal Tripodi, author of the ERISA Outline Book, past president of ASPPA Fred Reish of Resih Luftman something or other Craig Hoffman and/or Derin Watson from Sungard Corbel Google any of their names and you'll get tons of hits...

Ah well I suppose if you make the amendment the day after the owner retires, you would have a problem, since amendments cannot discriminate in favor of HCE's. But that sort of thing is ALWAYS something to watch out for in every decision you make.

Just to be clear, do we all agree that the QDIA rules are impossible to comply with in the real world, particularly the small employer world? (and I know they're just safe harbors). -For example, 30 days before the contribution is funded, you may very well not even know if there is going to be a contribution. -OR let's say you play it safe and tell clients to distribute the notice in January, and then they don't fund until September 15th. An 8 month delay seems like a bit of a stretch for a notice. -And how many people are really sending out additional annual notices to plan participants who never changed the default? Real world answers only please As a follow-up, I had heard from someone who had heard that the money market might return as an acceptable default investment. Anyone else hear that?

I see something on page 5 that discusses the $100 threshhold, but only in the context of VFCP. But it does give more weight to the $100 threshhold that I've heard thrown about. If anyone happens to know of a place in published IRS guidance that says de minimis equals $100, but deposit the tax to the trust, I'd love to see it. The question comes up constantly on these boards!!

Anyone who dies, retires, becomes disabled BEFORE the amendment MUST receive the match in the document, since they have already accrued a right to the benefit. Everyone else is fair game, since they have not met the allcoation conditions due to the last day rule.