msmith

A large 403(b) Plan with more than 200 participants - but only 50 with account balances is frozen in 2012 (for eligibility and contributions). For the Plan Year beginning 01/01/2013, would the participant count be limited to the participants with account balances because the others are no longer earning or retaining credited service?

Plan Year begins on 10/01/2011. Safe Harbor Notice given timely (30 days before plan year begins). Can the Plan's definition of compensation, for safe harbor allocation purposes, be amended prior to PYB 10/01/2011? A supplemental notice would be provided.

For the calendar year 2010, an Employer elected to contribute a 3% profit sharing contribution to all eligible participants. The contribution has not been deposited. However, the Corporation's tax return (not sure if extension applied for) and Form 5500 have been filed - both reporting the 3% allocation to all. Now, the Employer states he cannot afford the 3% allocation and only wants to contribute the 3% top heavy. Can both returns be amended for the lesser contribution? I am not certain that Rev. Rul. 76-28 applies here.

Our document software provider supplied a copy of the HEART/WRERA Amendment for Employer signature. While the WRERA portion does not have to be adopted until 12/31/2011 (calendar year plan) the HEART portion (all one amendment) must be adopted by 12/31/2010. Is the final adoption date 12/31/2010 or can they adopt by the due date of the 2010 Corporate Return - assuming both plan and corporation are 12/31?

They would be like plans, with separate trusts. TPA would handle all nondiscrimination testing.

If a Plan is reaching the 120 participant threshold, what do you think about the Employer adopting a new Plan to avoid the large plan audit? If possible, are there any unreasonable eligibility classifications to stay away from?

Employer wants to allocate a 7% PS contribution to all eligible participants. The document has a last day requirement for the allocation condition - all active and terminated participants will receive the 3% safe harbor contribution. If the gateway/non-discrimiation testing are not required, must the terminated participants still receive a gateway minimum?

Our office has been trying to make a determination on the new feature code 2T. Is this new code referring to a "general" default investment option contained within an investment contract or is it specifically referring to the QDIA rules? If other than a QDIA, what if a default investment option is available in the contract but isn?t being utilized because affirmative investment elections have been made by all participants? Should 2T still be used under these circumstances? We have yet to see a participant directed contract that doesn't contain a default investment option and are not even sure under what circumstances that would ever occur. In which case, it would seem that if 2T isn?t for a QDIA, then every single filing we do with participant direction should have 2T listed. If so, what?s the point of having the code?

Sieve - You are correct, this is not a Roth (k) question. Roth(k) was simply used as an example of a discretionary amendment. The Plan is a Volume Submitter and is using the normal language to exclude union employees (subject to collective bargaining). We are looking into any union consent to the inclusion of union employees. To get back on topic - let's suppose that the Plan excludes salaried employees and mid-year the Employer allows salaried employees (highly and non highly compensated) to defer to the Plan. Can the Plan be amend by the last day of the Plan Year in question, to include salaried employees as an eligible class? With or without EPCRS? Thank you!!

Not true - if adding Roth, the amendment must be done by the last day of the first year in which it is used.

A Plan document currently excludes union employees. The employer has decided to change the Plan’s eligible employee definition to include union employees and has already begun submitting 401(k) contributions to the Plan on behalf of the union employees since the beginning of this year (2010). Question: If the Plan is amended no later than the end of this Plan Year (2010) to include union employees as an eligible classification, would this qualify as a timely adopted amendment under the “discretionary amendment” rules or did the amendment need to be in place prior to the employer’s implementation of this change? In other words, does the ECPRS correction method for the early inclusion of ineligible employees only apply if the Plan was not amended by year-end?

The rules indicate that contributions must be deposited not less frequently than quarterly. Does this mean 3 months from when the contribution was determined (May contribution deposited by August 31) or by the calendar quarter (May contribution deposited by June 30)?

2 separate plans of a Controlled Group - Plan A (I am TPA): Only union employees excluded and the 401(k) portion has immediate eligibility. Plan B (another TPA): Excludes Japanese employees on temporary assignment at Plan B's Company, and has a 3 month wait for 401(k) eligibility. For the coverage and ADP/ACP testing, I have used the lowest service requirement. However, can I include the Japanese employees that have met eligibility (immediate) in my ADP/ACP tests? Plan A does not exclude Japanese employees from Plan A. Are there any cites to either a yes or no answer?

2 Companies in a Controlled Group - each have their own Plan - administered by different TPA's. For the Plan the I administer, I cannot pass coverage on my own, so I must ADP/ACP Test the combined group. My ADP Test fails and corrective distributions are required to some participants of the other Plan. However, they pass coverage and they ADP/ACP Test on their own (only their group) they pass ADP and ACP. Do I still correctively distribute, to their participants, based upon my test?

If the non-HCE's are classified as "not otherwise excludable" or "all" and the "not otherwise excludable" group provides a better ratio (2.39% as opposed to 1.9% for all) would I start my targeted QNEC calculations using the lowest paid in the "not otherwise excludable" group?

Has anyone heard of an election a participant must make to either participate in the 401(k) or defined benefit plan? Any citation available?

Larry: Are you saying that what I propose is okay?

Any thoughts to: Adopt a new 401(k) Plan before the old Safe Harbor 401(k) Plan is terminated. If there is a successor plan wouldn't we have to transfer to the new Plan or remain in the old Plan until a distributable event occurs?

Is it 1 year after the termination date or final distribution of assets? We would not be distributing assets in this case.

Client has a Safe Harbor 3% non-elective (not a "maybe") provision. Due to the economy, they want to cease all Employer contributions. Could they: 1. Terminate the Plan (Plan A) during 2009 and contribute only up to the termination date? 2. Adopt a new 401(k) Plan (Plan B) without Safe Harbor provisions? 3. Instead of distributing from Plan A, there will be a Plan to Plan transfer from Plan A to Plan B. Can this be accomplished? 4. Are they violating any participant rights by not allowing distributions from the terminated plan? 5. Would Plan A be subject to an ADP Test for 2009? If so, would aggregation with Plan B be required?

Can a current 401(k) elect to start the EACA or QACA arrangement mid-year, provided the Notice is timely distributed?

It is not a true co-pay in the sense of the word. It is classified as such on the payroll records. It is the employee's portion of the health insurance premium. Further, the Employer has been reimbursing, through the FSA, the dependant premiums, COBRA payments (for a spouse) and the above referenced $5.00 premium. If these are not expenses that can be reimbursed, how do they correct for a prior plan year? Thank you!!

The co-pay is not the co-pay that you normally see on an EOB. It is a payroll deduction.

A Company sponsors a Cafeteria Plan, with only health and dependant care reimbursement. Outside the Cafeteria Plan, the Employer provides Group Health Insurance with a $5.00/per pay co-pay for the employee and the employee can elect to cover spouse and dependants. The employee pays for any spouse or dependant coverage and this is deducted from pay (post tax). My question is - can the employee be reimbursed, from the Cafeteria Plan, for the co-pay and dependant coverage?

I would be interested to hear how other TPA's will be pricing their document restatements. Any feedback would be appreciated.