austin3515

How do you get the information? Are the insurance companies providing this on request? Is it in the standard reports you are getting? I've just never seen fair value reported.

That was a nice write up of fair vs. contract value, but did not indicate which one should be reported on 5500 (at least not that I could see)?

On schedule H, is the value of "benefits responsive" insurance contracts reported at fair market value or contract value? The instructions to Schedule H say use the same basis as line 3 or line 6 on schedule a, but the instructions in those line items don't tell you what basis to use? Is anyone inquiring regarding Fair Market value? Is there anything published which explicity states contract vs. fair value?

-Put on the enrollment form in bold lettering. -Circulate a memo to the participants at the beginning of every year. -Warn people who are at risk for the issue (i.e., high income high percentage)

Please, call me Austin

You are not wrong. One might also say, "you are right" Yeah, I think the wink is my favorite...

The fact that the definition of comp implies annual should not be a "rub." The plan should explicitly provide that the match is calculated based on pay-period deferrals and pay-period compensation. The fact that somehwere else in the document, comp. is defined as annual, should not render another part of the document null and void. Tell your co-workers not to think so hard

If match is pay-as you go, calculatated every pay-period (or month or quarter) then you do NOT need a true-up as long as the plan document provides for the calculation each pay period (or month or quarter). Note that the the contriubtions need to be deposited (I believe) by the quarter folowing the quarter to which they relate (ONLY if they are calculated based on pay-period method). If the doucment is not specific, then generally you need the true-up (i.e., annual is assumed if nothing else is excplicitly stated).

One day?? You get a gold star by any measure, Miss Mary Mac Mac Mac (I just couldn't resist .

In-Service distribs are the 5 years. All others are one year.

I think a plan that covers only a sole owner, or only a >50% owner and his/her spouse would be exempt from ERISA. Actually, the isntructions to the 5500 do get into this (under Who should File), because plan's not subject to ERISA need not file a 5500 (though they might need the EZ form). Interestingly, if they were all partners unincorpoated, I believe the answer is different.

Yes for the ADP test - only 401k contributions can be recharacterized as catch-ups.

LSULLIVAN - The HCE's should have received a check personally - it is their personal money. The BUSINESS should be depositing the funds.

Pay-Date rules. Plus (generally) this is more likely to let someone defer (assuming the pay-date is later), and when it's that close I just can't see the harm in letting someone in one pay-date early. Now maybe Mike Preston will chime in and tell you that risking disqualification of the plan isn't worth that one measley paycheck, but in my opinion, you should be okay. Sorry Mike, I couldn't resist

Well if it was wait and see, participants could not make an informed decision regarding what level of deferrals would be appropriate. Is that enough information to answer your question (okay, it MUST be the nonelective)

Yes, for certain purposes (assuming the document is amended): Yes, for eligibility to make 401k contributions (which was your question); Yes, to allocate profit sharing and/or matching contributions; No, for nondiscrimination testing (including the ADP test) UNLESS the plan's definition of comp. satisfies 414(s) ratio test (because the definition is not a safe harbor), which, if we're talking about a VERY small percentage of pay for the employee group as a whole, should not be a problem. The implications are pretty broad as far as PS contriubtions go if the definition of comp is not 414(s) (i.e., reate group testing is required, etc).

IT;s not like a TPA to say such a thing. I bet 10 to 1 that the ADP test in question is the calendar 2005 test. If refudns were not made by 12/31/06, then as a condition of not being disqualifed, a special contribution is made to the employees in an amount that is equal to the late refunds. Sort of a "penalty" for missing the distribution deadline.

Just that I'm comfortable based on a literal reading of the regs that this falls well within the line. The only grayness is the 0% limit, in my opinion. But I am omfortable by the "catch-ups are elective deferrals too" argument. Plus the fact that an example was in the proposed regs (which I did not know) and then removed with no explicit explanation and/or prohibition is a tacit confirmation that we (me and TP and Bird) are on the correct side of the line.

No one has suggested that a limit can be placed on catch-up eligible participants. The limit is being placed on HCE's. The fact that some HCE's are also catch-up eligible is a coincidence. And Mike, just so we're all clear, assume the document limits HCE's to 5% of pay. You're position also includes that if a sufficient number of NHCE's are also limited to 5%, that such a plan design would be allowable? Or have I misunderstood your concerns with respect to BRF's?

Don't blame me, I'm just a free-lance poster Tom Poje's the one who gave my argument credibility!!

I love how good plan design is an "end-run." By that rationale, testing by otherwsie excludables would also result in discrimination. The point being that both the 0% limit on HCE's and testing by OE's are clearly allowable by law.

The question is, does it ever actually happen. I have never seen it in 7 years, and I find that strange.

Regarding TP's last paragraph, I would like the record to note that this is exactly what I speculated the requirement to mean (See post #12).

He says this can be done in black and white, I even provided the cites. So just to be clear, you think is Sal is wrong on this?

I've found 2 or 3 major providers NOT asking for WP-4's. Anyone esle agree that they're out there?