WDIK

I did not think that ownership was a factor in determining the top-paid group.

I resemble that remark.

Doesn't 410(b)(6)(E) include contributions subject to 401(m) as well as 401(k) within the eligibile to contribute definition?

From the Form 5500 instructions (emphasis added): Active participants include any individuals who are currently in employment covered by a plan and who are earning or retaining credited service under a plan. This category includes any individuals who are eligible to elect to have the employer make payments to a Code section 401(k) qualified cash or deferred arrangement. Active participants also include any nonvested individuals who are earning or retaining credited service under a plan. I'm with your uninformed opinion. See also.

Credited service to the employer, but not to the plan until they meet the eligibility requirements under the plan. At least in my opinion.

I'm afraid you may have a case of mistaken identity. I may qualify under this category.

If you feel the situation described is a "deemed CODA" (opinions among posters are strong and varied) then aren't the issues as follows? 1) Deferral limit of $13,000 (for 2004) 2) ADP Test should include these amounts.

If you are required to file Form 5500 instead of Form 5500-EZ the audit/bond requirements apply.

First, I'm trying to wrap my feeble intellect around the concept of being on the payroll while working no hours and receiving no wages. It seems to me that these individuals are former employees, not current employees and do not meet the definition of "active participants" in the the Form 5500 instructions. The instructions state in part: Active participants include any individuals who are currently in employment covered by a plan and who are earning or retaining credited service under a plan. This category includes any individuals who are eligible to elect to have the employer make payments to a Code section 401(k) qualified cash or deferred arrangement. Active participants also include any nonvested individuals who are earning or retaining credited service under a plan.

Can you respond that it would be elgibile up to some nominal amount, say $50? This would allow the purchase of a foot bath, but not a hot tub.

Line 14 of Form 5500-EZ asks for information about employees other than the individual and the individual's spouse as well as whether or not the plan passes the coverage test. If no other employee is eligible, Form 5500-EZ may be filed, and if assets are less than $100,000, no filing is required. Be careful that the other employee(s) are not actually eligible. I would keep careful records of hours worked, etc.

The employer pays wages to the employee. This is their expense. The participant elects to defer an amount reducing their personal income tax.

From the information provided, it sounds to me like the plan is terminated for the following reasons: 1) The sponsor of the plan no longer exists. (Who is maintaining the plan?) 2) No substantial recurring contributions are being made. 3) All participants are separated from service because their employer no longer exists. Therefore all participants are 100% vested and should be provided notices. With regard to the Schedule SSA, this is attached to the Form 5500 filing. I do not think it is generally sent to plan participants. EDIT: Sorry KJohnson. I didn't mean to duplicate your thoughts

I think you are on the right track, as you must follow the terms of the plan document.

Prior "spritited debate" addressing similar issues.

It is my understanding that if the plan does not meet the safe harbor matching definition, you must provide any required top-heavy contributions. This thread may also be of interest.

Hopefully, you have the "bad information" provided to you by the CPA in writing to justify your position in case anyone remembers their instructions differently. With regard attempts to change an executed document that contained "errors", you will probably have to defer to the attorney's big meeting.

I would appreciate the expertise of other members of this forum. The plan year for a safe harbor 401(k) must be twelve months long, unless it is a newly established plan (excluding successor plans) or, under the proposed regulations, a terminating plan. A current 401(k) plan (not safe harbor) is on a calendar year. If the current plan elects a short plan year, say ending June 30th, can the plan adopt the safe harbor provisions effective July 1st? (This assumes proper notice is given and the safe harbor plan year ends June 30th.) This scenario seems to meet the requirements of Notice 98-52, but something about it is nagging at me. Thanks for the help.

Try here.

I had the same thought about the Schedule H vs Schedule I as well. I guess only lindamichals can tell us for sure.

Audits are now required for small plans if nonqualified assets make up more than 5% of total assets and are not bonded.

This must mean that the filing is done on a cash basis. Correct? Otherwise, I don't think that there is a distinction on the Schedule I between received and receivable. That's the $64,000 (unadjusted for inflation) question.

I don't think 415 states precisely what you are asking for. However, 415(f)(1)(A) uses the terms "plans...of an employer" [emphasis mine]. Also 415(g) uses the language "maintained by the same employer". If I'm not mistaken, this is a distinction from two plans maintained by two separate employers that are not members of a controlled group.

Related thread.

http://benefitslink.com/boards/index.php?showtopic=18347&hl=