austin3515

As long as the assets are not commingled you should be okay. I'd issue a strong caveat that there better be a legitimate business reason for separate plans (i.e, two different companies/divisions). You don't want it to look like the point of the arrangement is to avoid an audit. I don't think that's a good way to make friends with the DOL. What's more, I'm not sure you'd save much money considering the cost of admistering two plans is probaly close to double the cost to administering one plan for everyone...

Daggonit! But I have to say, you hope for answers like yours (i.e., a perfect site, not just the page but WHERE on the page. The technical equivalent to a GPS!).

ADP/ACP is tested separately for union and nonunion.

http://benefitslink.com/boards/index.php?s...t=0entry50929 Found an old post on this.

Can you provide that a deemed distriubtion to a zero percent vested participant will occur when employer sources are 0% vested? I.e., allow a forfeiture even if there is a 401(k) balance allocated to the participant.

Amen to that brother! If it's that or bankruptcy, perhaps the answer is scriveners error...

What? Please expand...

If we're talking about a ridiculous amount of money, I'd consider a scriveners error approach. If the Plan never gets audited, it will likely never have to be defended. IF it does get audited, the correction would likely be far worse if the IRS quashes the scriveners error, then if you corrected it now. I guess your case would be helped by another attoorney concluding that there was a scriveners error. I guess it depends on the sponsors risk tolerance...

A restatement is a giant amendment. I say it's an amendment. I guess a rule of thumb is, all you can ever do to an existing plan is amend it... That's my vote anyway.

How bout the one specified by your Plan Document. It should be in there...

Is she only one payroll at a time? OR does she receive pay from both companies all year? Assuming thatt the document indicates that the match is calculated each pay-period, and that she receives pay from one company at a time, then I'd say you could exclude comp from the other company in the match calculation. Otherwise, I think it's in based on a literal interpretation of your document.

It could be construed as the participant's deferrals never being remitted. Nothing was owed to the IRA - it was owed to the Plan. But if you keep real quiet, maybe it'll be okay... Sometimes the cost of correcting insignicant things is significant and at some point you just have to let it go. Maybe you want to get some lost earnings paid though?

Now I see what you were trying to do. Maybe if I was more familiar with the teachings of QDROPhile I would have fared better?

Critical question: Are they all different controlled groups? If so then all testing is separate, without regard to anything going on in the other "employers." If there is only one controlled group, then all testing is done together, as though there were just one entity.

You mean you're not really a 3-eyed fish?

I'd say the conservative thing to do is give them the 3% from the plan document eligibility date (7/1/04). I think you could make a case for excluding pre-9/1/04 compensation, but probably not a very good one. It certainly carries more exposure...

Just went through your situation VERBATIM. You have the option to run one tests (I believe, if you have the ERISA Outling book look up Mergers and Spin-Offs in the index) but for a lot of reasons, testing separately makes a lot of sense. And yes, each plan would need to satisfy coverage for this to work. The employer is NOT sponsoring the PEO's plan - ADP is sponsoring that one. If the HCE's contributed nothing to the PEO plan, this may be a scenario where you want to combine the testing. But read up on the requirements for this before you go too far. I think there are some snags to be aware of.

How about one brokerage account? You would need to do quarterly vals though if you want individual direction. I have a client that has no participant direction (which I think is a luxury for most people), and the val is done just once a year. This is often a good solution specifically for the reason you've identified.

You need to look at the definition of compensation. More likely than not, if the 401(k) provisions are effective 7/1/04, the plan will call for a 3% from 7/1/04. A lot of documents too though will, based on a literal interpretation, call for 3% of full year pay (or at least pay as a participant). That's because it really is a nonelective contribution. Really though, you need read the nuances of the document, so speculation is almost worthless...

rate group testing is 401(a)(4), and coverage is coverage. Fail-safe doesn't apply to 401(a)(4). Anyone getting a contriubtion is benefitting under coverage, and under the ratio percentage test it doesn't matter how much they get. So I say the answer is you can use the avg benefits test to pass your rate groups.

I just looked it up in 98-52 (and a couple articles). It can be any 414(s) definition, except that the rule that says you can disregard comp over a certain amount is not allowable.

I hear ya, and I agree. But I have seen documents that say what I wrote, so it must be true!

Most plan's say you can use any 414(s) definition for non-discrimination. A good plan document will give you this flexibility, and most do. Are you sure your nonelective isn't a safe harbor? Coverage is based on the whole year. When doing the ratio percentage, of course compensation or the amount of the benefit means nothing. IF your doing the average benefits test, the same 414(s) requirement applies. All I can tell you for a sight is the applicable regulations...

The document could say "if the sponsor elects to disaggregate the plan into two plans pursuant to 410b.whatever, then the QNEC only goes to the nonexcludables." This is still a definite allocation formula. The same logic applies to the gateway contribution when cross-testing. The way it was explained to me (as to why it's still a definite allocaiton) is because the QNEC is designed to pass nondiscrimination testing, and the decision to disaggregate is an operational one. Something like that anyway.

Test on the basis of otherwise exlcudables and basically ignire anyone with less than a year or under 21 (assuming no 5% owners fall into that category). This basis is almost always the best way to go.