austin3515

Plan A matches based on total gross pay, but for purposes of the match, they want to amend the Plan effective 1/1/2020 to exclude a lot of different compensation items. I assume I still have the flexibility to leave the plan on prior year testing, thus getting one more year of the "inflated" ACP results? In other words, I know in 2020 the ACP average for the NHCE's is going to take a hit, but I'll still be using the 2019 averages anyway. I suppose it's the flip side of a company discontinuing the match in 2019, forgetting to switch to current year testing, and then resuming the match in 2020 (a scenario we all agree means 100% refunds for the HCE's).

So in other words, it would be a luxury that I'm sure my clients will not pay for...

Well then I would be ok with it! I just have not ever seen such a document. But maybe its because never asked. Although perhaps too attorneys only do it when requested and perhaps then for a fee? i.e., is it a standard procedure that is always done to "restate" into a working copy each time?

Buisness owner has Mom come in for 10 hours a year. Comp is $450. Now she was eligible once upon a time, she worked in the office for about a year and hit her 1,000 hour requirement. Needless to say as a zero in the test, she has a nice favorable impact on testing. Now I read through the Carol Gold Memo and Relius's response, and the memo certainly could have made accusations about this type of arrangement, but does not in any way (focsing instead on young NHCE's and frankly only the most obnoxious of scenarios). So would you exclude her from the testing based on the Carol Gold thought process or include her without worry because Carol Gold never even mentioned this. I'm feeling pretty good about including her but was curious what others thought. http://www.relius.net/News/TechnicalUpdateDetails.aspx?T=P&1=1&ID=628

Now this statement sent chills down my spine. Do you know how hard it is to administer a plan that is held together with duct tape like this? It's an absolute nightmare. Since this new DL elimination came out, this is the number one thing I fear. A 75 page document with 12 amendments. Terrifying. Absolutely terrifying.

Scout's honor I almost uysed that firm in my example! I guess my point is, my God who is maintaining the document otherwise? You'd better have a DHC keeping it updatd for law changes, etc. I remember the other scenario I thought of, is an auditing firm insisting that its clients obtain an independent review. I actually think within a few years as the DL's get more and more stale this will turn into a big thing in that scenario. If DHC made a mistake would they admit it or try and bury it? Who knows, but of course there is an incentive to bury it and hence a lack of independence, and independence is the whole point of an audit.

So if I use the ERISA Attorney Firm of ABC to draft my ERISA document, I'm sure they will be thrilled that we're going to go to firm XYZ to review their work.... I have read these websites and definitely see the market for this but I just don;t see it as a practical business model. Perhaps in the Fortune 500-like market place, but not in the less than 500 life world. That's my theory anyway. As a TPA with relationships with the ABC attorneys I'm certainly not recommending my clients call XYZ (and as far as I know, neither have the ABC attorneys). Some of you I think are the ABC attorneys. What are you doing?

Ha! No good deed goes unpunished. Too bad your client didn't procrastinate like mine do. Sometimes it works out!

I find that it always helps to preface these conversations with "ya know, the IRS calls them SIMPLE's but they're not so simple after all!" Hardy har har. ?

So a client calls you and says "someone's last day in the office was 2/27th, what should I enter on your census file as their termination date?" To which you say what exactly? Never mind, I actually give up. I wish some others would chime in and confirm my suspicion that the term "termination date" is not in dispute, but that's all I will say abut that. Over and out.

I agree that makes it more complicated, but please comment on the simple example first :)/. Then we can throw the complications in there. Most of the time it really is as simple as I'm suggesting.

So the IRS apparently has the same position then. But KEvin C, here's the real question for your clients. If they put a termination date on their census response back to you that says someone's termination date is 2/27/2019--Does that mean: a) the last day they were in the office was 2/27/2019, OR b) that the last day they were in the office was 2/26/2019 and 2/27/2019 was the first day they did NOT work for the employer, Cause I'll be shocked if you're working on the assumption that the term "termination date" is defined in b). And of course it is relevant in certain situations such as last day rule, or even determining if someone is employed on a plan entry date.

Well there is no accounting for a layperson might think is a reasonable definition of retirement. I'm talking abuot HR people across the country, to the 99.99th degree, would all put the retirement/termination date as the last date someone was in the office,. They just all would. All of them.

A-2. (a) Except as provided in paragraph (b) of this A-2 with respect to a 5-percent owner, as defined in paragraph (c) of this A-2, the term required beginning date means April 1 of the calendar year following the later of the calendar year in which the employee attains age 701⁄2 or the calendar year in which the employee retires from employment with the employer maintaining the plan I'm with jpod and BG150. Someone's term date / retirement date is universally defined as the last day on which they did work - NOT the first day on which they did not work. The IRS does not need to define what is meant by retirement because it is commonly understood and universally applied in the same manner. I googled this topic because I am currently answering this question for a client and this thread came up. So sorry for bumping an ancient topic, but I'd venture a guess that this is the time of year this will come up (as we get back our censuses and find out which Septuagenarian's retired (I had to google this word!)!

That;s what's nice about using the W-2 definition in the first place. Is it included in box 1? Yes? Then it's eligible comp.

§1.410(b)-7 Definition of plan and rules governing plan disaggregation and aggregation. (f) Section 403(b) plans. In determining whether a plan satisfies section 410(b), a plan subject to section 403(b)(12)(A)(i) is disregarded. However, in determining whether a plan subject to section 403(b)(12)(A)(i) satisfied section 410(b), plans that are not subject to section 403(b)(12)(A)(i) may be taken into account. OK, so here is my question. the 401(k) covers all of the HCE's and the 403b covers all of the NHCE's The first sentence above seems to suggest that I should disregard the 403b PLAN. Perhaps what this is saying is that if I disregard the PLAN, then what I have remaining is a bunch of nonexcludable NHCE's who are not benefitting even if they all get the same employer contribution? I want to make sure I understand what this reg is telling me I can and cannot do (I don;t actually have this scenario!). I guess what it is also telling me is that if need the average benefits test to pass coverage for the 401k plan i have to include all of the people covered by the 403b plan as zeroes?

ie. she has already done that so that according to the regs the hardship itself has been relieved. She has a different hardship now, one of consumer debt, which is not a hardship. That's essentially the logical conclusion, but it is good to know that it's not only logic but also generally written into the regs. I suppose the answer should not be different depending on the source of the financing. So for example, what if she did pay for it on her credit card or on a HELOC? Should she have been at a disadvantage merely for not segregating the debt? This is a rhetorical question - the answer should be "no".

Participant had a medical procedure 2 years ago and financed the procedure. The participant now wants to take a hardship to pay off the loan. It is clear that the financing was for the medical treatment. My initial response was "two years ago was just too long." Anyone have a different thought? So for example, what bills has she prioritized over this one? Did she pay off credit cards ahead of this? In other words at what point does it convert from a medical expense to decision regarding cash flow and personal financial management?

I was thinking Field of Dreams!

Oh geeze, me too! But the person I spoke with, probably every "senior" pension consultant is very familiar with this person through national speaking engagements and widely read publications. Kevin C's distinguished reputation does not extend beyond beyond these boards! At least not just as Kevin C. Who knows, maybe he is really Kevin Costner?

He said that int he 403b regs there was a statement that you can't use elective deferrals in the ACP testing. I was not able to locate that site but the case had already completely collapsed by then so I did not push it. It was like I had pension royalty on the phone and I didnt want to push my luck!

I checked with an industry "guru" and he shot it down too :(

I definitely like the idea of putting it back on clients to see if THEY want to go above and beyond for their employees. Some will be "absolutely I don;t want to "cheat" anyone out of what they are entitield to" and others will be like "No, let them come to me.," And I think I would know which clients would say what!

(f) Section 403(b) plans. In determining whether a plan satisfies section 410(b), a plan subject to section 403(b)(12)(A)(i) is disregarded. However, in determining whether a plan subject to section 403(b)(12)(A)(i) satisfied section 410(b), plans that are not subject to section 403(b)(12)(A)(i) may be taken into account. That does seem to pull the rug out from under me!

Sometimes it amazes me that other people have better ideas than Relius. This is such an obvious provision. I wonder if they added it to their newest pre-approved document. Disguised service conditions. An exclusion of employees by job category may not indirectly impose an impermissible service condition (i.e., a service condition that fails to satisfy the requirements of Code §410(a)). The exclusion of part-time Employees, seasonal Employees, temporary Employees or other job categories may be considered a disguised service condition where such categories are based solely on the amount of service performed by those Employees. A disguised service condition will not violate the minimum service conditions if such Employees are eligible to participate upon completion of a Year of Service. If the Employer excludes Employees under AA §3-1 or under AA §6C-3 of the Profit Sharing/401(k) Plan Adoption Agreement using a disguised service condition, such as part-time or seasonal Employee status, and any such Employee completes a Year of Service, such Employee will no longer be treated as an Excluded Employe