jquazza

CAP, Gateway will apply to anyone who receives a nonelective contribution even if it is the TH minimum only.

You have to either prorate the 205k for each payroll period or stop matching once participant's comp reaches 205k, otherwise, you will be taking into consideration compensation in excess of 401(a)(17). Most plan docs will be silent on the issue so it will be left at the plan admin interpretation.

I agree since these participants would be excluded from the test anyway.

You basically have three definitions of 415 comp (Current Includible Comp, W-2, Wage Withholding Comp,) some of these items are includible in one definition and may be excludable from the other (i.e. Term Life Premiums might be on W-2 and in CIC but not on 3401(a).) As far as the Car Allowance, it depends if it is taxable or not. Severance should be in all three. To make things simpler, you can modify the 415 definition in your plan by excluding certain items like Fringe benefits, Reimbursement/expense allowance, Moving expenses, Deferred compensation, Welfare benefits. If you choose to modify your definition of 415, you have to exclude all these items or none.

Plans need to be aggregated for nondiscrimination if they are aggregated for coverage, hence, if you don't need to aggregate for coverage, you don't need to aggregate for ADP/ACP.

Blinky and Perkinsran, I agree with you as far as the gateway minimum is concerned (not having to give it to the otherwise excludable) however, I do think that in order to exclude the otherwise excludable from the discretionary PS contribution (the extra 3.5%,) your document has to specifically exclude these employees (I suspect the document doesn't otherwise, they would have been excluded from the SH as well.) Bottomline, it is not because the employee is otherwise excludable that he is not entitled to the discretionary PS if he met the accrual requirements.

Tom, I think there was a similar discussion few months back. I think it is too aggressive. The mere fact that you don't have refunds because deferrals can be reclassified as catch-up contributions doesn't make your ADP test pass. You have a failing ADP which is being corrected by a recharacterization of the contributions.

They can be forfeitable if the participant is missing.

Elective contributions are usually considered employer contributions (except on 5500.)

What does your document say about the forfeitures?

IMHO, you would have to consider whether the acquisition was an asset or an equity sale. If it was an equity sale, then, the company did not change, only it's owners and therefore, you would have to consider 2003 compensation and ownership to determine the HCEs. If it was an asset sale, you may argue (I know some people have different opinion on this subject) that the compensation earned while employeed by the predecessor (and ownership of predecessor employer) is irrelevant. As far as people not employed in 2004, why would you want them in your 2004 test (no comp, no contribution etc...) There are 253 posts on the subject in this forum.

Blinky, Don't make it look to easy, or your clients will think they can do it themselves. Plus, if you oversimplify it, it might be really hard to justify the extra fees...

Kirk, That's because you're a visionary with IRS insider info and you know which problem area they will tackle next. You have to admit it was not as prevalent then as it is now..

Plus, you can't blame it all on the employer, the employee should have noticed the loan payments were not deducted from his/her paycheck.

NIPA and ASPPA both offer very comprehensive programs for pension administrator. Each organization recognizes the other and grants credit for certain exams taken with the other, so if you want to pursue both designations, it a plus. As far as being recognized as professional designation vs. para-professional, I don't know what that means. Maybe that you don't have any rights or powers granted to you once you have one of these designations (except for the right to call yourself APA or QPA etc...) I do know that as a hiring manager, I personally value these designations more than a college degree.

MS did not exclude from its plan reclassified employees. People started to add that language in their docs after that case settled.

Blinky, you nailed it, and when I look at the code, nothing tells me to segregate the loans. Intent, schmintent indeed! jsb, no limit on # loans or timing restrictions.

The 10k he just took increase his current balance to 20k. That doesn't change the fact that his highest outstanding balance during the past 12 months is still 40k. His current balance was only 10k before the new loan. 10+10=20k that's his new current balance, that is still way under the 40K highest outstanding balance over the past 12 months.

That’s the exact formula I am using.

Why is everyone saying the highest outstanding balance is 50k? Over the past 12 months, the HOB was 40k. The current balance of the loan is 10k, if I take an additional 10k, that puts the current balance at 20k, but the highest over the past 12 months is still 40k!

This doesn't look right, but I cannot find a flaw in the logic, see if you agree with this: A participant has a 40k 12-months highest outstanding balance (HOB) on his loan. His current Balance (CB) is 10k. Under 72(p), he is allowed to borrow 10k (50 (max allowed)-(40(HOB) -10 (CB))-10(CB))=10k. The next day, his 12-months HOB is still 40k, so he can borrow another 10k (50-(40-20)-20)=10k. So, I can't let him take 20k today, but I can let him take 10k today and 10k tomorrow. Am I missing something?

The 50k is in a SEP, the sponsor has no control over that.

rrfahey, You got it right, if the plan consists solely of deferrals and the safe harbor contribution, your plan is not top heavy even though the plan's top heavy ratio might exceed 60% (IRC§ 416(g)(4)(H).)

What does the document say about allocation timing and compensation? Is the match allocated by payroll, at year-end or other (e.g. quarterly)? If the document says it's allocated by payroll, you would base it on 15k comp, if it is allocated at year-end, it might be based on full year comp or even date-of-participation compensation.

What makes B fail coverage? After all, if they exclude A employees, there is a good chance they would pass coverage on their own, no?