austin3515

Perfect! Thanks guys!

Archimage - I take your word as gospel truth but if there is anything you can point me to, that would be great, otherwise, don't worry about it. I have the ERISA outline book 2002 edition...

Is there any scenario under which I would need to be concerned whether or not a plan is super top heavy. The Plans in question are a money purchase and a 401(k) profit sharing plan covering the same employees.

Has anyone seen a "check the box" Summary Plan Description before? The language is a template, and you check the boxes that apply, and fill in the blanks appropriately. It seems to me that they could easily be misleading to participants. Any thoughts? Should we recommend that our client get a regular SPD drawn up?

Thanks!

Thanks Tom - So nonexcludable, nonbenefitting for coverage and Not included whatsoever in ACP, right? Thanks a lot!

Doing coverage calculation for a 401(k) Plan with a match. Initial eligibility is 12 months, regardless of hours (i.e. elapsed time). After such period you are eligible to make deferrals as of the first to occur of 7/1 or 1/1. For the match, as long as you're eligible to make deferrals you are treated as benefitting under the match. But, in order to receive the match, the part must work >1,000 hours in the Plan Year. My questions is this, if someone did not receive for two reasons, 1) They did not defer, 2) they did not work the 1,000 hours, are they then treated as not benefitting? Thanks

Well 401(k) Worker, what's important is that you learned a valuable lesson. Come to Benefitslink.com next time you have a question! Everyone doesn't always agree 100% but as you can see from these posts, they agree on about 99%! Just so we're all clear, you are not double taxed on loans!

With a 401(k) it seems to me that the most important thing is that people aren't let in BEFORE the plan entry date. So if someones ENTERS the Plan on 1/1/03 (after meeting elig requirements in November 02), but joins in February, even though the next entry date isn't until July 1, no big deal because he IS a participant in February and therefore able to excercise his rights to change his deferrals. So unless the doc says you can only CHANGE deferral elections once a quarter, no problemo. Can someone confirm? I've run into this many times. That comment on 410(a) also seems important, unless the Plan's eligibility is automatic on 1/1 regardless of hire date. You can't have retroactive participation in a 401(k), and can't make em wait more than a year. Kwarren, is there also a 7/1 entry date?

Expanding on what veba brought up, you should definitely make sure that the PEO is handling the 401(k) the right way. The IRS came out with some policies/interpretations of the exclusive benefit rule that really screwed the PEO's. Like veba was saying, if the plan was not a multiple employer plan, the employees participating could have some very significant impacts - i.e., if the Plan is ultimately disqualified. The revenue ruling is 2002-21. http://www.irs.gov/pub/irs-drop/rp-02-21.pdf

Agree with above, but if I'm not mistaken the burden of proof in that sort of a situation is much greater on the administrator to ensure that there is a hardship. You don't have to be safe harbor, but as the name would imply, it is much "safer." I'd consider amending. Unless you are an employee, in which case this is more beneficial to you.

What is match for free?

Generic for you is detailed for me... Thanks!

Mike - Can you expand on what the Plan doc should should say for cross testing to be definitley determinable? Do you mean in terms of defining who would fall into each rate group?

Good question. I have no idea, but I'll take a stab. The only requirement I know of is that under a DC Plan, the allocation has to be determinable. I.e., based on straight compensation, integrated compensation etc. This plan takes an interesting twist on that, because truly no matter what, anyone should be able to determine what the allocation rate is in any given year. So it may not fail to satisfy that requirement. Then of course, it would have to satisfy all nondiscrimination requirements regardless (410(B), 401(a)4, etc.). One last thought is that perhaps by design the Plan discriminates in favor of HCE's because it's geared to benefit the highest paid employee in the most beneficial way. That seems to be at least one potential interpretation, and it would obviously create a problem... I'd get the letter!

Where can I find the most recent underpayment interest rates. We're doing a correction of late deposit of participant deferrals and we may need to credit earnings based on this rate, as described in the DOL's VFC program. Any internet links would be most appreciated!

That was awesome

The regulations on depositing participant deferrals reference "business days." What the heck is a business day? Is it basically everyweekday except for a banking holiday?

2muchstress - Thanks for saving me some research - I was about to look up that very quesiton on Monday!

Actually my recollection is that if all of the account balances for all of the transferred participants are transferred to the new plan, that the new plan is treated as the continuation of the old plan, and therefore, all eligibility/vesting should be creditted as if one company. Just a guess though. This merger/acquisition stuff definitely needs to be addressed by the Plan's legal counsel - the stakes are high!

I read a really good book once on Amazon called 401(k) Today. It was pretty basic but seemed to touch on all of the important facts. I also liked the CEBS program from the International Foundation of Employee Benefts. Course III is on DC Plans, and general qualification items. That was a bit meatier. Alternatively, you could always just read the 401(k) Answer Book. That book is quoted on this site extremely often.

I'm pretty sure the limits are all set based on the calendar year in which the Plan year starts. So whatever the limit is in calendar 2003 ($12,000?), is the limit in the plan year starting 11/1/03.

Thanks! Is there anywhere on the internet that one could review the PTE's?

Katherine - I like your last response the best! Does it get more authoritative then this message board? I think not!

There must be someting in the 401(k) answer book as well..