austin3515

Believe it or not there are plans that allow for participant direction that have all investments in one brokerage/trust account and hire a TPA to perform allocations quarterly using a separate software program. Then in addition to allocating the money to each participant, and to each source, they neeed to determine which invesments (and the related income) are allocated to each participant (at the source level). This is often done for smaller plans that wish to minimize investment expenses incurred by the plan (through economies of scale), while still allowing participants to choose their own investments. It's a nightmare though, and I do not recommend it. We beg and plead with our sole client that does this to change to a more sophisticated platform.

I can assure all that I am VERY ethical (often to the chagrin of my clients), and I do indeed believe that the interpretation I have set forth is reasonable. What's more, I have already discussed with the owners here obtaining the opinion of an ERISA attorney before moving forward. I was hoping someone would say this!! So by that rationale, if the Plan was integrated at ANY TIME IN ITS HISTORY, then the Plan needs to include the integration disclosures, right?

Man, I really think I got the analysis right on this one. It really doesn't seem to be that aggressive of a position, especially considering the "good faith" requirement. Can anyone point me to some sort of a flaw in the argument I've presented (one that doesn't include general opinion) that discredits it as good faith? Have I said anything that is clearly incorrect? So far the only reason for not omitting is "why take the chance?". If there is no clear mis-reading, then by definition, it is a good faith interpretation.

We have a lot of Hancock plans, and the only reason we're sending them statements is b/c of integration. So if this is classified as good faith it eliminates the need for us to do anything on a LOT of plan!

Wait a minute, I think I can easily make the good faith leap now: The law says (emphasis added): "must include an explanation of any permited disparity under section 401(l) of the internal revenue code "that may be applied in determining any accrued benefits described in clause (i). Clause (i) discusses a) total benefits accrued, b) nonforfeitable balance, etc. In a DC plan, the way in which total benefits accrued are determined is based on the ACCOUNT BALANCE, and not any formula. Because a description of permitted disparity is not relevant to detemining one's account balance (i.e., the market value of investments is determinative), it is not applicable in determining accrued benefits, and therefore the plan's use of permitted disparity need not be disclosed!!! Note too that Accrued Benefits refer to the benefit as of a particular date, and NOT a current year allocation. Please comment NOT on whether you think I'm correct (because that is irrelevant!). Please comment on whether you think this meets the good-faith requirement.

Sounds like maybe you're using the corbel prototype: If so if you check both the "exclude comp while not a participant" and then indicate "special effective date for safe harbor provisions" as 10/1/07 in the field provided, you will get the outcome you are looking for (in my opinion).

I was hoping someone else had a good faith interpretation that would lead to annual disclosure for integration!! I suppose "Congress couldn't possibly have intended THIS" wouldn't count as good faith...

I've seen some providers (one fairly large one, in particular) take the position that SS Integration need only be disclosed on an annual basis (they indicate that they have spoken with their legal counsel on the matter). I couldn't agree more that disclosing this fact quarterly is way over-kill, but the way I read the law the only exception to quarterly info. is for vesting. So are people disclosing SS integration Q'ly, or annually? If annually, what is the basis?

My professional opinion is that Corbel rocks. I'm sure it's on the high end of the spectrum, but as with most things in life, you get what you pay for...

The original post was that the employer would contribute more or less to certain employees based on their elections regarding health benefits. If some are HCE's and some are NHCE's, the nondiscrimination could get ugly. Of course, I have never heard of what you are discussing, so maybe there is a way to achieve their goals that I'm not aware of.

I just can't see that working. Even if it did, it would be a nondiscrimination testing nightmare!

Fender: Which of the safe harbor requirements was violated?

The requirement is SOLELY that the plan year be 3 months long, which in your case it is. (1.401(k)(e)(3)). There is no requirement that there be no operational defects for that short 3 month plan year (imagine the whole thing being blown because ONE person had no deferrals withheld! The only difference here is scale). Therefore, I think your safe harbor is in tact, and you correct this operational defect through EPCRS (which I should point out is no walk in the park--it will be pricey!!).

On what basis does he refer to himself as a pension attorney? Of course, are you certain he is not truly referring to employer contributions? As someone already mentioned he could contribute $12,500 through the date indicated by the attorney. And from the sole owner of a corp's perspective, that's a mere $2,500 less than the full 401(k) limit. The fact that it's profit sharing vs. 401(k) means nothing. i.e., perhaps it is you who are misunderstanding him?

When did anyone suggest that the loan became a distribution Question Mark. Let's say you had $10,000 in a checking account and you loaned your friend $3,000. What you're suggesting is that you should be able to withdraw $10,000 from the bank even though there is only $7,000 in your account. This analogy is dead on to your situation.

If you're looking for a section of the code/regs that will say "you cannot withdraw more money than you actually have" I can assure you it will be a fruitless search. Your other sources are not eligible for hardship. It's as though they do not exist.

I have an infant and a toddler, so it's not like my wife and I are gallavanting on the coast! Sometimes I have a spare minute or two, and with that I check out the boards, reads a quick NYTimes article or something like that!! I always wanted an Avatar, and when I finally found this one I was really disappointed that it didn't show up... don't if I'd say I was giddy when it appeared, but it was pretty cool...

The participant could take the full $7,900 if only it was available. But alas it is not... The plan limits hardships to 401(k), so the story ends there. If I think of it, I'll take the loan from a non-401(k) source for just that reason (i.e., so the particpant can still take the full hardship distribution). Try this: refinance the loan to repay the 401(k) loan, and then turn around take a new loan from a different source. Yeah, I think that might work!! Rememeber, you need to reset the interest rate though! Also, double check the refinancing rules to make sure you're okay, but I think you will be.

Interesting, as my question was secretly about an ASG... Every year I wait for them to clarify what it is that they mean in greater detail, but they never do!

3H is plan feature for "member of a controlled group." Do people agree that if ALL members of the controlled group and/or affilliated service are covered by the Plan, that 3H should NOT be selected? Being a "member" of a group implies that there are other members as well.

You can kick someone out who is an HCE, so I don't see why you can't go the other way. The only requirement is that you pass coverage. I know you don't want to divulge any trade secrets but the only this works is if you have another plan with NHCE's that you are aggregating for testing. Just for ha ha's, is it something more interesting than that?

Definitely voluntary and definitely pre-tax.

a) This has nothing to do with "gateway" at all. that relates to "Cross-tested" profit sharing contributions. b) This formula may or may not pass the ACP test, but the test is run the same way you would run any other ACP test. The fact that the formula is tiered has no effect on the ACP test. c) What you do need to make sure of is that each tier of matching contributions passes the nondiscriminatory classification test because each rate of matching contribution is a benefit right or feature. I suggest you get assistance from someone who specializes in retirement plan administration. This could be equated loosely with "do-it-yourself" open heart surgery (of course, the stakes are not nearly as high, but you get the idea!).

You should see my teeth...

Andy, that's taboo!! You can't edit a post after someone replies to you! Now Mike's post makes no sense!