WDIK

I found the following situation humurous and wanted to share it here, since I have no other friends. The local dairy is running a promotion entitiled, "Fresh or it's Free!" What exactly does this mean? Customer: This milk is sour and curdled. Checker: No charge, Sir.

I'm not comfortable with the position that the plan could require an additional payment amount if the promissory note indicating the repayment terms (even if they did not follow the plan document) was properly executed.

This link may be of some assistance.

Apparently, no one was willing to answer my questions because they didn't want to make me look like an idiot, but I'm used that. After rereading Rev. Proc. 2003-72, I find that Section 6.03 clearly applies to my situation. (The nonstandardized issue brought up by ljr is not addressed there.) I will now quietly retreat with my tail between my legs until my impetuous nature once again overcomes my common sense.

I'm glad to see that these boards do not advocate discrimination against incisor-impaired individuals.

Any help at all would be appreciated.

Why is the recipient firm saying they can either transfer all or none? Wouldn't it be the current custodian that would make the transfer?

Annoyance and wasted time from dealing with the government?

That was understood, but thanks for watching out for me.

Thanks for the clarification. The issue is that salary deferrals are counted in determining the highest contribution percentage rate, but may not be used to satisfy top-heavy minimums.

Tom: If the highest contribution percentage rate for a key employee is less than 3 percent of compensation, isn't the minimum contribution rate reduced to the rate that applies to said key employee? If so, it follows that this participant, the only key employee, will always receive the minimum contribution rate. Have I overlooked something?

STATISTICALLY SIGNIFICANT Definition: Describes a mathematical measure of difference between groups. The difference is said to be statistically significant if it is greater than what might be expected to happen by chance alone. I don't think that "statistically significant" is the proper choice of words either.

pax: Could you elaborate on your reference to a problem under 404(a)(3)(A)(i) with regard to 25% contribution being deducted? Did you mean that the deduction limit was 15% for plan years beginning on or before 12/31/01? I'm just trying to make sure I'm not missing something obvious. Thanks.

If the sole owner is the only employee (and there are no controlled group or affiliated service issues), there should be no problem with the ADP test either.

Obviously you need compensation to determine the match amount. Is your question specific to those employees who have elected not to defer? Are you asking, "Do you need compensation amounts for employees that are not deferring?"

I don't think that there is any need for the 3% contribution in the scenario you describe. Top-heavy rules in a defined contribution plan require that a contribution be made to all eligible nonkey participants (the document can also indicate top-heavy contributions to key employees) in an amount equal to the lesser of 3% or the highest contribution percentage rate for key employees.

By the term "corrective 3% action", do you mean the top-heavy minimum contribution?

It is my understanding that if the plan covered fewer than 100 participants as of the beginning of the plan year, that it can file as a small plan, using Schedule I and avoid the audit requirement (assuming of course that it meets the bonding requirement for non-qualified assets).

My understanding is that the $75/day "reduced" penalty would apply since the expiration of the extension for filing (presumably 10/15/03). If you were to use the DFVC program, the $10/day reduced penalty would be assessed back to 7/31/03. Of course the $75/day mentioned is not a guarantee, hence the risk.

Refer to this thread for an opinion regarding the actual amount the IRS and DOL will charge for a late filing. Based on jashendo's opinion, the total amount assessed for a late filer who files on their own is $75/day. If that is actually the case and you filed the Form 5500 today, the total penalty assessed would be $375. Are you much of a risk-taker?

I would like to restate ljr's question in the hope of getting some additional input. Is a prototype adopter that would not have filed for a determination letter if they had adopted the plan by 9/30/03 allowed to adopt the prototype plan after 9/30/03, submit the plan for a determination letter, pay the $250 fee under Rev. Proc. 2002-73, and be considered a timely amender? (I agree with ljr that Rev. Proc. 2002-73 does not address this situation.)

I think that 412©(8) applies to retroactive amendments adopted after the close of the plan year.

Perhaps my terminology is incorrect or inadequate, but I do know that under standardized prototype documents, the 7.5% to 8.5% interest rate must be used for certain purposes.

I particularly appreciate Mike Preston's comments on the topic of the interest rates used to value lump sum distributions. He stated: I have never quite fully comprehended the logic behind requiring a plan to use "reasonable" interest rates (defined between 7.50% to 8.50%) for the definition of actuarial equivalence, while for purposes of lump sum distributions another interest rate is required.

Thanks jashendo. It's been quite a while since I felt young. I don't know if I should admit it, but I'm a "post-ERISA administrator."