austin3515

Thanks!

This is what you are referring to, this blows it for me, correct?

Can I have a deferral limit = 5% of Compensation PLUS catch-up contributions for anyone eligible for catch-ups, but then have no limit for anyone else? Or would that be age discrimination?

Let's face it we all practice law every day whether we care to admit it or not. I research regs, provide advice, craft amendments, assist in EPCRS corrections. Heck, my job description is essentially to practice law. We don't call it that, we call it being a TPA, but there's not much difference aside from the fact that we are paid for a "project" and not an hourly basis. OK I did not go to law school. And by the way, I have my favorite ERISA attorney on speed dial and I call him for help more frequently than he probably would like (he's made plenty of money solving my client's problems!). But to say that a TPA can't "practice law" is to deny the entire system of thousands of people who can efficiently assist plan sponsors in administering their plans. You call it practicing law, I call it helping my clients comply with rules regulations. Probably no difference aside from semantics.

The auditor is ignorant. If someone makes 2,400,000 a year and elects to defer 1% of pay that is NOT a problem. It just isn't. It's that simple. The amount you are contributing is NOT based on compensation. Employee's are permitted to contribute $24,000 (if they are 50). How they get their is an administrative/operational issue. Can I close this topic?

Our document specifically says changes to Employer Information does NOT require a plan amendment.

Well wouldn't you know, that's my precise scenario...

So are we all in agreement that prohibiting a restatement of a safe harbor plan effective 4/1/2016 (for example) in which NO changes are being made to anything that matters (eligibility, vesting, distribution options, contributions, definition of compensation, etc etc) would be ridiculous? Was there nothing out of an ASPPA Q&A that supported this? Relius had a newsletter in 5/2015 in which they dramatically advised not to do it, but said if you had no option, just don't make any other changes. My oh my how the IRS has destroyed safe harbor plans through these idiotic policies.

For us common folk the statement "Prime is 3.5" is more than sufficient to keep me out of trouble!

Has anyone in the last 6 years heard prime + 1 defined as anything but 4.25? I certainly have not.

Prime as announced by the federal government? http://www.federalreserve.gov/releases/h15/current/

Does everyone agree that Prime + 1 for participant loans is officially 4.5% (3.5 + 1)? I'm just surprised I haven't seen articles or email blasts on this topic yet.

By any chance does anyone have a table created by an actuary that extrapolates those factors out? I guess I could ask an actuary that we work with but thought I'd check!

THANKS!! OK so I guess the good news is I had the complete table... But what do I do if, because of a 65/5 rule for NRA, someone's NRA is 71 or above. That;s the problem I was tyring to solve...

Does anyone know where I can get the permitted disparity factors for a DB Plan? I'm looking for the grid that adjusts the factors based on the juncture of NRA and SSRA. So 65/65 = .75 and then everything else is adjusted upwards and downwards.

I don't see why that would be an issue? If they leave before meeting the service requirement they still forfeit? Does there also have to be a risk of losing all of your money if they go bankrupt?

The assets held in a nonqualified plan are subject to the claims of creditors in the event of a liquidation/bankruptcy. Do you know if there is a particular kind of insurance a company can acquire to protect the participants against the risk of default? In this particular case, the participant has several hundred thousand dollars. Note that we have a rabbi trust but of course that does not help alleviate the risk presented by the insolvency/bankruptcy of the plan sponsor.

You can only take the deduction if the contribution is funded. In this case it was not deducted. If it had been, then certainly an amended return would be required since the tax return claimed an ineligible deduction. But I think that is a non-direct relationship to the original question.

Good point, and now allow me to use it against you! The value of a contract of course is that you are only obligated to do what the contract says. And the contract does not make it mandatory But enough of that already. I see your point and it is a good one...

This is much more plain vanilla. There won't be any profit sharing so there is no testing. And there is no DB Plan. The document has no language regarding board resolutions fixing the contribution. It merely says "a discretionary contribution to be determined by the Employer." Good point on participant communications. In this case, nothing was communicated one way or the other. However, if you want to go down that road, when I consulted the attorney in the past he indicated that although it is not a good employee relations policy, there is no legal obligation to make a contribution merely because you said you would. Saying you will do something that is explicitly discretionary does not make it mandatory. Nowhere does the plan document ever provide for a mandatory contribution (aside from THMs). So since no language in the document ever crystalizes the discretionary contributions, it can be revoked. Like I said, I am hoping for something like an ASPPA Q&A or perhaps a Relius article on the topic, but I certainly appreciate your opinions from such esteemed contributors!

Board approved a profit sharing contribution of 5% of pay but cash flow turned around (and is now very bad). Can someone point me to something that will clarify that the discretionary nature of the contribution survives this resolution and can therefore be eliminated/reduced to zero? Obviously the contribution has not been funded yet. An attorney once answered this question in a very straightforward manner: "The contribution is discretionary."

I was uner the impression that a plan never existed if never funded. Something about there needs to be a "corpus" or something. I would definitely not file personally. There is no plan by any (reasonable definition) to file for. Until there is money/liability involved, it's just a stack of paper...

But the recordkeeper was not the regulated financial institution? Just some 3rd party? That just sounds awful to me. Now, if John Hancock, Empower and Fidelity do that, so be it - they are a regulated financial institution.

I couldn;t agree more, that has nothing to do with it. IT's the commingling of the underlying assets.

yes, we all know it is doable/ The ONLY question (at least for me) is if there are 65 participants in Plan A and 65 in Plan B, is an audit required. Someone mentioned pooling 300 unrelated plans in a single trust account, and I think that is extremely uncool. I have commingled two plans in one contract for related entities/plans, but that is it.