austin3515

OK, in this case, the options were pretty much everything but Grantor Trust. There was living trust, employee benefit plan trust (which I ruled as applicable to qualified plans), and "usurary" (not spelled right) trust. Nothing that seemed to fit. Or should it just be a corporate account? But again it seems to me that it can't be a corporate account because then the corporation has control.

The individual is the finance guy on the Board of directors? I think you did go off target, I'm down with everything you said. Our goal is to have this individual (Mr. Treasurer) be responsible for ensuring that the money is not diverted. Any help on registering the account in this way?

I've read a few articles and there is one obvious question that I have not seen answered - will the sponsors be required to restate their documents periodically? I sure hope so as I have dealt with plans written in the 90's with 35 amendments attached (and yes I am exaggerating).

An individual? I've always said (based on an attorney;s advice) that the registration is John Doe, Trustee, FBO ABC Co 457(b) Plan.

Does anyone have any guidance on what to tell these compliance departments at the wire houses for which boxes to check regarding type of account? We use a Rabbi Trusts. Of course there is no option for Rabbi Trust on the forms, not even a grantor trust. Should it be just a corporate account? Butt hat would seem to negate the purpose of the Rabbi Trust because then the corporation would control the accounts and not the Trustee...

But the user fee is just $300 now, and it's not too difficult of a process.

This conclusion again is based on DRAFT instructions written almost a year ago, at a time when 12/31/2015 was 16 months away. Now it is 5 months away and not so much as a peep from the IRS. To me it seems over-the-top-cautious to even pay attention to this thing. And because the 2015 5500 SUP does not even exist today, how could the IRS possibly go back to people who have already filed and therefore fulfiled all of their reporting obligations based on existing laws and add NEW requirements. No no no, not even the IRS. Prediction: The 2015 5500-SUP (if there is one), will exempt anyone at least who has already filed.

Try entering the 2015 dates on your filing software and see if you get a validation error. As for the 5500-SUP, there is no such form so that should not enter into the equation. Frankly I do not see how it is remotely possible that that could be imposed for 2015 at this point. It seems to me that you should be able to file the 2014 form with 2015 dates. We've done it a million times and never had any issues. If the new form is not available, use the old. I believe it to be that simple. The following note is shown on FT's 5500 preparation site on the 2013 Form series: No such message appears on the 2014 Form.

I believe it is a requirement for all documents to specify the allocations in writing. I thought that the "in writing" was to address the definitely determinable issue, because absent some written documentation whose to say why it was. I'll tell you what we do is slap a board resolution right on the contribution spreadsheet that we send. "The corporation hereby resolves that we're doing what is shown above" or something to that effect.

Prototype.

I think that 98% of the TPA's who signed up for the EGTRRA PT did so without knowing the distinction. We signed in for the PT years before there was ever any training. I personally blame our document provider for not making a bigger deal about this. Once we all knew about this important distinction, I think PT's pretty much dropped off the landscape, at least in the unbundled TPA world.

The regs can be quite helpful sometimes, I don't know why I am always so surprised (b) Safe harbor nonelective contribution requirement (1) General rule. The safe harbor nonelective contribution requirement of this paragraph is satisfied if, under the terms of the plan, the employer is required to make a qualified nonelective contribution on behalf of each eligible NHCE equal to at least 3% of the employee's safe harbor compensation. © Safe harbor matching contribution requirement (1) In general. The safe harbor matching contribution requirement of this paragraph © is satisfied if, under the plan, qualified matching contributions are made on behalf of each eligible NHCE in an amount determined under the basic matching formula of section 401(k)(12)(B)(i)(I), as described in paragraph ©(2) of this section, or under an enhanced matching formula of section 401(k)(12)(B)(i)(II), as described in paragraph ©(3) of this section. (2) Basic matching formula. Under the basic matching formula, each eligible NHCE receives qualified matching contributions in an amount equal to the sum of— (i) 100% of the amount of the employee's elective contributions that do not exceed 3% of the employee's safe harbor compensation; and (ii) 50% of the amount of the employee's elective contributions that exceed 3% of the employee's safe harbor compensation but that do not exceed 5% of the employee's safe harbor compensation. (3) Enhanced matching formula. Under an enhanced matching formula, each eligible NHCE receives a matching contribution under a formula that, at any rate of elective contributions by the employee, provides an aggregate amount of qualified matching contributions at least equal to the aggregate amount of qualified matching contributions that would have been provided under the basic matching formula of paragraph ©(2) of this section. In addition, under an enhanced matching formula, the ratio of matching contributions on behalf of an employee under the plan for a plan year to the employee's elective contributions may not increase as the amount of an employee's elective contributions increases. (4) Limitation on HCE matching contributions. The safe harbor matching contribution requirement of this paragraph © is not satisfied if the ratio of matching contributions made on account of an HCE's elective contributions under the cash or deferred arrangement for a plan year to those elective contributions is greater than [Austin3515: i.e., it could be less than, including zero] the ratio of matching contributions to elective contributions that would apply with respect to any eligible NHCE with elective contributions at the same percentage of safe harbor compensation.

OK, here's the deal. The VFCP has no self correction options. The VFCP does say that lost earnings are calculated using the DOL online calculator. So if you are filing under VFCP you can definitely use the calculator. The VFCP provides no other method for calculating earnings. [edit: There is that "restoration of profits" piece to the on-line calculator, so for example if plan assets were used to buy a power-ball ticket and you hit the winning number, the plan gets the profits] In previous iterations of VFCP, the loss was calculated as the greater of a) the return that would have been realized had that failure not occurred, and b) the on-line calculator (which is interest calced based on the IRS underpayment rate). The interesting question is what happens if you are NOT filing under VFCP. I think in that situation the DOL could come in and request interest at the greater of the two rates mentioned above. But in practice, in my experience, the DOL has accepted the on-line calculator in all situations.

The simple answer here is that there is absolutely no problem with this. The Plan allows for contributions. Check. The Plan allows for withdrawals. Check. That is that.

Me too - they did not become participants until July 2016. Until then it was not known if they would be eligible on 1/1. I'd say "they are treated as being eligible on 1/1" but in reality it didn't happen until July 2016.

I asked this very question of Corbel and they said "yes." Their irrefutable logic? If you can give them nothing, surely you can give them something that is less than the full match. I don't know if you are using the Corbel PT formatted VS, where you can make the SH Match discretionary for the HCE's. That was a sweet little addition that made me quite happy... We're using that as a "default" for our closely held/owner is the only HCE SH Match plans...

I think I said everything correctly. This was something he had said earlier. This is a true statement. I think in his particular situation the point is moot because he mentioned he cannot pass it, but I was just trying to be thorough. Let's keep it really really simple. Component Plan 1 has just 1 NHCE (C1 NHCE). Component plan 2 has 1 HCE (C2 HCE) and 1 NHCE (C2 NHCE). C2 HCE is getting a 5% EBAR and C2 NHCE is as well. The ratio percentage for the only rate group is 50% because only 1 of the 2 total NHCE's is getting at least as much as the only HCE. This is true even if C1 NHCE is getting a 7% EBAR because you have electively chosen to test based on component plans, which requires that you treat C1 NHCE as not benefitting. I think the fact that no one would ever use component testing in my example is besides the point. I fancy it was a very illustrative example...

We;re not talking about coverage when we talk about component plan testing. The plan still needs to pass coverage the old fashioned way. We're only talking about 401a4 nondiscrimination. Each rate group in Component plan 2 must pass the ratio percentage test, and because as you mentioned you can't pass ABPT, each group needs to be at least at 70%. If there are 10 people in Component plan 1 who are NHCE's you are already starting 10 in the hole because they are all treated as not benefitting. If any of the rate groups were under 70%, you would need to pass the average benefits test, which as you know would include the entire plan.

It wasn't effective in my particular situation, but I assume they will find that overall they got a lot of people to file their 5500's as a result of this email blast. Would a 30% compliance rate be classified as effective, in light of the minimal effort involved? My guess is "yes." Say they sent this blanket email to 500 sponsors and 150 filed as a result. I think that would make them happy.

Another lively discussion on the same topic. This one includes the EOB section, which references the 2003 Q&A you mentioned. http://benefitslink.com/boards/index.php/topic/28318-adpacp-prior-year-testing/

No actually it is definitely a plan imposed limit. The PLAN says I can impose a cap on HCE's to pass testing. This is pretty well documented, I didn't come up with it on my own.

My guess is "because it's really easy." Edit: And also "because it's really effective.."

I'll try not to read too much into that sigh...

To be more clear, you treat them as not benefitting.

That's the way to do it!