austin3515

No 410(b)(6)© transition period I take it? It would seem to me that you would use the ADP for the non-SH Plan. Seems hard to argue with that approach. Probably a candidate for VCP.

https://www.barracuda.com/products/emailsecurityservice/features/#section_8 Sounds like this is it. Believe it or not, we currently use Barracuda so I'm thinking we can just flip a switch... Thanks!

What are they using for those scans? Is it a particular software?

HAs anyone ever heard of an outlook plug in that will scan emails and attachments and warn you if it finds SS#'s?

This would be hugely helpful if you have this in writing? Was it a Q&A or something?

Wow, that one goes back a while Kevin!

Thoughts on my theory that it needs to be a classification determined based on business principles? So here is an example I thought of. You have two employees who are both nurses. The two nurses both work for the same Doctor. They are both salaried and have the same experience. They are both hourly employees. They are indistinguishable except by name and hair color . The only difference is that one was hired 10 years ago and one was hired 2 years ago. (assume 410a is not an issue even though as discussed I do personally think it is, but I have a leading industry expert telling me it is not). Assume further that the employer wants to exclude people with less than 5 years of service from the contribution. That distinction is not made based on business level criteria. It is based on an individuals particular circumstance. Therefore, length of service is not a business classification, inasmuch as the examples in the regs would suggest. If on the other hand, RN' were entitled to a greater contribution than CNA's, that would be legit because job description is specifically listed as a reasonable classification in the regs.

EWveryone is in there own group. You can do ANYTHING. That's the point and that's where this 410a thing gets more complicated (though I reiterate my agreement with Mike Preston). Of course you need to pass coverage and that's when the reasonable classification thing comes in to play.

FWIW, our recommendation is going to be to add a 3% SHNEC since they also have testing issues. Then we all go home happy...

I agree with you 100%. But he was VERY adamant... I even pointed to the example in the regs where only employees if Division B are elgible for the plan, and to be in division B you have to be employed for 5 years, but he was not swayed.

I did, certainly. I was totally floored by their response. One thing they pointed to was the match section of their document that allows different matches based on years of service, and there was no stipulation that each level "must" have a match. And if I told you the vendor I think you would agree that they have a lot of sway.

(b) Reasonable classification established by the employer. A classification is established by the employer in accordance with this paragraph (b) if and only if, based on all the facts and circumstances, the classification is reasonable and is established under objective business criteria that identify the category of employees who benefit under the plan. Reasonable classifications generally include specified job categories, nature of compensation (i.e., salaried or hourly), geographic location, and similar bona fide business criteria. An enumeration of employees by name or other specific criteria having substantially the same effect as an enumeration by name is not considered a reasonable classification. Here is what the regs say. One thing I notice in the examples is that the classifications do not seem to be determined at an individual level, they are at a business level. It seems to me that something like an individual's status or an individuals years of service departs from the business level classifications like hourly/salary, department type. Maybe someone can articulate it better than me what I'm saying...

Don't be silly, its to reward long-term employees!

I have a plan where the following groupings are used in a "everyone in their group" plan: Department Heads (probably ok!). People w/ More than 5 Years of Service People who terminated AFTER the end of the plan year People who work less than 30 hours per week. For those of you who read this and say "hey, is this the same plan he was posting about a couple of weeks ago?" the answer is yes, but my specific question here is, can I use the Average Benefits test. I should point out that I have it from a very very trusted ERISA expert that allocating a zero % contribution to people with less than 5 years of service does NOT violate 410(a) as long as the plan otherwise satisfies coverage and nondiscrimination. So, can I use the average benefits test with these groupings dictating whether or not people actually get contributions. It seems to me that a reasonable business classification can either be interpreted very broadly (hey, of course it's business!) or very narrowly (e.g., business lines, geographic locations, position)...

I don't think so because of the 12 month plan year requirement. You can't add safe harbors mid-year. What you want to do is change the plan year-end. That's the ticket for you. The only requirement there is that be a safe harbor (does not specify which kind) for the next "12 months."

I'm not with you on that. The regs talk about how to suspend or reduce the match (and now the nonelective too). You are wanting to suspend one and add another. But the latter is beside the point because your suspending one. If you are suspending the match, you must follow the rules regarding suspending the match. I don;t think I'm oversimplifying it.

From the recent IRS Notice: The following mid-year changes are not subject to the provisions in the first paragraph of this section III.B, but instead would violate the requirements of §§ 1.401(k)-3 and 1.401(m)-3 unless the applicable regulatory conditions corresponding to each specified change are satisfied: (i) Adoption of a short plan year or any change to the plan year (permitted only as described in §§ 1.401(k)-3(e)(2), (3), and (4) and 1.401(m)-3(f)(2), (3), and (4)); (ii) Adoption of safe harbor plan status on or after the beginning of the plan year (permitted only as described in §§ 1.401(k)-3(f) and 1.401(m)-3(g)); and (iii)Reduction or suspension of safe harbor contributions or changes from safe harbor plan status to non-safe harbor plan status (permitted only as described in §§ 1.401(k)-3(g) and 1.401(m)-3(h)). And the regulations say this about reducing or suspending the match (for example) (g) Permissible reduction or suspension of safe harbor contributions (1) General rule (i) Matching contributions. A plan that provides for safe harbor matching contributions intended to satisfy the requirements of paragraph © of this section for a plan year will not fail to satisfy the requirements of section 401(k)(3) merely because the plan is amended during the plan year to reduce or suspend safe harbor matching contributions on future elective contributions (and, if applicable, employee contributions) provided that—

I have to say though, I think the design you suggested is such a good idea, where no one is harmed, that I think it actually ought to be added as a doable option eligible for ACP Safe Harbor Treatment. OF course it goes above and beyond the ADP Safe Harbor, but it seems silly not to make it eligible for the ACP Safe Harbor. Neat idea...

You've changed your story from your original post. Based on what you have said here (in which the first 3% is explicity NOT a match) you should refer to Lou S. first response. See also the last sentence of his last response.

Do the rules regarding partial plan terminations apply to 403bs? For example, if we froze a 403b plan and started up a 401k plan, would that trigger 100% vesting? It seems to me that those rules (411(d)(3)) appear to apply only to 401a plans.

That's what I'm thinking... As far as I know, the PC's have no other "clients" aside from Dr. Group, Inc.

Aha - But no common ownership at all. From your text: "Ten percent or more of the interests in the organization must be held, in the aggregate, by persons who are highly-compensated employees (pursuant to IRC § 414(q)) of the FSO or A-Org."

Doctors Group, Inc. is owned 50/50 by two Doctors. Another 4 Doctors work for Doctors Group, Inc. Each Dr. owns his own P.C. Doctors Group, Inc. pays the P.C. for their services based on contracts. These are not "management" services. The P.C.'s are being paid for the medical services their respective owners render. Something doesn't seem right about this. Clearly it is an affiliated service group, except that the services rendered are not management services, they are actual medical services. Perhaps the issue here is that they shouldn't even be using the P.C.'s because they are common law employees? The PC's do not do work for any other entity.

C'mon, that's gotta feel good Kevin, right? Thanks!

Can I limit Catch-up Eligible HCE's? So all HCE's eligible for catch-ups are limited to 5% of pay plus catch-ups? Or would that be age discrimination since your limiting people who are over age 50 exclusively?