austin3515

I think you'll find that ERISA Outline Book would say it's reasonable to pro-rate. I recall that the IRS position on 401(k) contributions during the year is that 401(k) can be made during the year because income really is earned throughout the year - the fact that it's deemed earned on the last day doesn't change this. Based on this, I would be comfortable pro-rating, but definitely check out the outline book.

Let me guess: that's why a one member LLC files a schedule C, and does not get a K-1? And another piece of the puzzle falls into place...

So in laymen's terms, QNEC's cannot be included in the gateway (assuming you want to use them in the ADP test)?

Tom - It;s late, but your last two statements seem to contradict each other. Would you elaborate?

Got to pass 401(a)(4) with AND without QNEC's. There's some controversy about whether or not QNEC's can be included in the gateway, I'm not sure if there is a concrete answer on that.

Then my original response remains unchanged.

I missed the word "now" in the OP - rlb64 asked a good question - were they related in 2005? You could aggregate in the year of acquisition, but not they year before acquisition.

Yes for ADP (because you can aggregate two 401k's in the same controlled controlled group.). For ACP though, it's a no go (only employees eligible for the Plan can be included in the tes), but you did not indicate that the ACP was failed anyway. I think a clarifying point is that you can aggregate the "401k plans" without regard to your ability to aggregate your "match plans." For coverage/nondiscrimination, they're treated as completely different plans.

In a word: EPCRS.

Blinky - I decided to go straight to the regs to prove you wrong, and there it was... evidence that you are indeed correct. I put stars around the relevant sections. 1.401(a)(4)-2 Nondiscrimination in amount of employer contributions under a defined contribution plan. (ii) Allocations taken into account. The amounts taken into account in determining allocation rates for a plan year include all employer contributions and forfeitures that are allocated or TREATED [emphasis added] as allocated to the account of an employee under the plan for the plan year, other than amounts described in paragraph ©(2)(iii) of this section. **For this purpose, employer contributions include annual additions described in §1.415–6(b)(2)(i) (regarding amounts arising from certain transactions between the plan and the employer)**. In the case of a defined contribution plan subject to section 412, an employer contribution is taken into account in the plan year for which it is required to be contributed and allocated to employees' accounts under the plan, even if all or part of the required contribution is not actually made. I still think this is more of an operational failure though, since it was included in participant statements.

-Deduction issue: No biggy, deduct it next year! -415: As long as all of the employees are still employed (common in a small company), 415 might not be an issue anyway (i.e., their 415 limit might not be exceeded). So that leaves basically non-discrimination and coverage. And there are NO regulations that I was able to find that indicate when a contribution must be deposited to be included in a particular plan year for non-discrimination and coverage. IF it's out there, please let me know where!!! As an aside, many documents specify that contributions will be made by the extended due date of the federal tax return. If your document has this, J4K, then you might have an operational failure. But I'd say due to cut-back issues you'd better make the deposit (forget about employee morale!!).

You;'ve got a bad site there - I couldn't figure out which reg it was. But an ASG doesn't need to worry about anything that a multiple employer plan needs to worrry about, that's for sure! It is treated as one employer for everything.

Nice tip Fredman!! This one works! The report includes only participants with ending balances, and terms are printed at the end of the report (because they get sent out and not hand delivered). Prints perfectly on Avery 5160. labels_5160.rpt

Can't be done. All service is aggregated with very few exceptions (none of which apply here). I'm assuming these were paid employees?

It got me in the right direction, but I didn't need addresses, etc. Also, the report you attached was pulling from RPTEE so all participants were getting pulled in, even those with no activity. I based this one off of RPTEEACCT. This report prints a label only for people who had account activity (I'm trying to supress those with no ending balance). One key issue was not getting people's names to be listed 3 times if they activity in 3 accounts. In this report, I selected (under the database menu) "Select Distinct Records" and that seemed to do the trick. If anyone knows how to get the select expert to work to suppress those with no ending balances, please let me know (or modify the report and reattach it). Thanks! labels_closer.rpt

Interesting. Definition of benefitting is "receiving an allocation." (Match participants are deemed to be benefitting if the only reason they didn't get a match is that they didn't defer). My opinion is that if they satisfied the conditions in EITHER period, they are benefittiing for coverage purposes. So it becomes and ACP issue only.

Would anyone be willing to share a crystal report that would prepare labels for participants with account balances? The savvy users will know the trick is not to get a label for every account, but just one per person. I talked to Relius who said it cannot be done, BUT at my last job we had reports that did this. At the risk of being picky, we use Avery 5160 labels. Thanks!

I'm sure amendments will need to be adopted before 12/31/07. Are you using Corbel documents? If so, I'm sure they will be forthcoming. Really any document provider should have them eventually. They're probably waiting for some more guidance to materialize. I think starting with EGTRRA (i.e., post GUST) they abandoned the "wait till the next big restatement" philosophy, but you never know...

Although it was worth nothing, it blows my mind that his hasn't been repealed. This is a burden on small employers and even larger employers that have been owned by the same person for 20 years+. I can't understand why passing nondiscrimination on contributions each year doesn't suffice. I'm suprised there isn't more lobbying to get rid of it, but I suppose lobbying is a luxury of the fortune 500.

Bird, I'm looking at FAB 2006-3 "Form of Furnishing Statements" paragraph 3, and the only requirement I'm seeing regarding the multiple source notification is that it has to be "furnished in advance of the date on which a plan is required to furnisht the first pension benefit statement..." I'm interpretting that to mean we have until 5/15/07. Also, I'm incorporating the "multiple sources" language into my supplemental notice. Any thoughts on that?

Far be it from me to argue with Tom! I learned something new today

I think ECPRS suggests you would correct at a 50% rate. So maybe take half of what they elected and contribute that to the Plan.

This does not need to pass BRF's. Everyone is subject to the same match schedule. The fact someone chooses not to contribute at a certain level is the turf of the ACP test. If you had different levels of match for people with different lengths of service (as an example), that would need to pass BRF, because different groups of people are entitled different matches based on the same level of 401k contributions.

I think we all THINK we're experts If this employee is an HCE (i.e. if he/she earned more than 100,000 in 2006) then this is a definite no-go. I don't think you can specify that "individuals for whom a match was negotiated in their employment contract will get the match, but no one else will" because a Plan must provide for a definite allocation of contributions (i.e., based on objective criteria). I suppose a super aggressive position would be that this does meet that requirement but I hugely doubt it. What's more, there's no way your plan document provides for this today, and you have to follow the terms of the Plan. Depending on how the document reads you may still be able to amend it for 2007 (i.e. if participants must be employed on the ).

It's actually the opposite of deductible, in that it's double taxed!! Once when the interest is repaid with after-tax dollars, and then again when it is distributed!