Bird

It could be 1/1, as long as it doesn't create some conflict between what's in the new document and the way the plan was operated (not likely).

If it is a deficiency then you have lots of company. I'd ask the document provider first. I might be over my head but it's possible that the phrase "through which benefits are provided" limits the application to true annuity or insurance contracts that actually provide a benefit rather than hold accumulated assets, although the later thing about "maintains a fund" seems to be a catch-all. I'd think an enrollment kit with this info might suffice, even if it doesn't explicitly say it is an addendum to or part of an SPD.

No, you only get safe harbor reliance if you have a safe harbor formula, and if you have a grouping allocation, which I think you are saying you do, then you don't have a safe harbor formula, and using an integrated allocation methodology is just as arbitrary as allocating by shoe size. You may test using permitted disparity (@ 100% of the TWB) but that's not the same as allocating. If you create allocations that happen to be the same as an integrated allocation @ 100% of the TWB and 5.7%, then the allocations should pass testing (unless you have an HCE under the TWB and an NHCE over, and probably some other semi-rare circumstances).

We do it all the time.

I don't like per pay period matches for a lot of reasons, and don't want to get sucked into a discussion that is only theoretical to me, but I can say... I don't think you can amend until the end of the year. I think partner matches have to be based on the full year's compensation. I don't see how you could match based on a periodic draw; I've seen plenty of times where partners took draws during the year and then had losses that wiped most or all of that income away, and it would be wrong, I think, to match based on draws which are, IMO, arbitrary and meaningless for plan purposes. I don't think it would be discriminatory to match partners on full year's pay since they technically have one pay period per year, on Dec 31.

Sorry, I just don't want to follow your line of reasoning. As I see it, you do an IRA rollover for the $1,000 guy and you just get rid of the $24.

My point was that if the MPP said you must cash out for less than $1,000 and do an IRA rollover for $1,001 to $5,000, then that's what you must do (and should have done maybe some time ago). You're focusing on what the regs say you may do rather than what the plan says you must do.

It sounds like an earnings adjustment to me (other income) - definitely not a contribution.

Seems like a different set of circumstances than your earlier post. If the terminating plan has (had) the automatic rollover provisions all along, why didn't you do that earlier? That's not optional. That will take care of one problem. I could find an expense to get rid of $24. Not necessarily. How is it in any way good to keep $24 and $1029 hanging around, with the hassles involved in direct evidence right here?

OK... No. The formula tells you how to allocate the contribution, and it can't be changed after participants have earned the right to share in it, generally after earning 501 hours of service in a standardized plan.

Yes. I've been pleasantly surprised to not get correspondence about "where is your 5500" in the year of the change, so it seems they recognize the switch.

Yes, it seems the 401(k) plan must be amended to accept these transfers. I think* for amounts under $5,000 it's sort of a theoretical exercise because you don't have to make annuity payments for those amounts, and you could turn around and force out the accounts as lump sums in cash if less than $1,000 (and in fact force out amounts between $1000 and $5000 as lump sum rollovers...plan language permitting/requiring such actions). *Warning - I'm only half paying attention, and refer you back to QDROphile's post about seeking professional guidance. I'd hesitate before amending the 401(k) plan as that may have qualification consequences...maybe the reg could be interpreted to read that you have to transfer only if the 401(k) can accept them, and you could in fact force out to IRAs from the MP...? Lots of nuance on this.

You might want to pore over every section of the 401(k) plan, especially the basic plan document if it's set up as a prototype or VS on prototype format. They often have language that says "if [the plan accepts transfers from MP plans]...then [annuity benefits are preserved]."

They can be rolled over. http://www.irs.gov/retirement/article/0,,i...0.html#rollover

The way it is should work is...the plan is the owner and beneficiary of the policy, and the proceeds are paid to the plan. The proceeds become part of the amount payable to the plan beneficiary, who completes the forms to request a distribution. Part of the proceeds are tax-free (the "at-risk" portion, which is the difference between the cash value and the face value), plus, if PS-58 costs were properly reported, the cumulative PS-58s are recoverable tax-free. It wouldn't be unusual for lots of things to be messed up, like the ownership and/or beneficiary. An agent sold the policy and should be helping with the payout (bwa-ha-ha).

I think you've analyzed it well - you're basically swapping one debt for another, and saving a whole bunch in expenses. There is at least some possibility that an increase in the interest rate environment could reduce the value of benefits, but I would guess that is minimal and not worth just hanging on for another couple of years. (I don't know much about valuing DB present values any more so I could be off base.) I suppose there is also some possibility that your company could go bankrupt and foist the unfunded benefits onto the PBGC, but that seems pretty unlikely, and again, I don't know enough to say whether that is a real possibility or not - just brainstorming a bit to help you cover all of the possible outcomes. Yeah, I have a pretty serious heart-to-heart before we install a DB. CPAs do this thing where they look at the contributions for the non-owners and look at the tax savings for that and say "well it only costs you X" and it's too simplistic for my taste.

Just completely ignore his deferral election percentage and base the match on what he contributed (dollars). $1,500 is correct...maybe. When you say "Matching contributions are per pay", well, if that's what the document says, then we have no idea what the correct match is, using total annual numbers. If you mean "matching contributions are deposited each pay but are calculated using annual comp", then $1,500 is correct.

I can't give you an excuse but I would be comfortable "forgetting" that it might be required. Hard to do that with a straight face since you posted the message but yeah, it would be opening Pandora's box on new queries.

It wasn't apparent from the thread that the 1099 income is covered under a benefit plan, but I'll defer to your apparent knowledge and conviction.

Yes, I was stuck in 2011. Yes. $50K Well, the deductibility limit is 25%, but 20% is a shorthand approximation of the max based on SEI minus the appropriate SEI tax deduction.

100%/$49,000 (25% deduction limit for the company). If, as you say, there are no controlled group/ASG issues, the contributions to the 401k plan are irrelevant. Basically, there is a 415 limit for each employer (but note that each taxpayer gets only one 402(g) limit of $17,000; they couldn't double up on 401(k) contributions).

A SIMPLE is just a vehicle to get money into an IRA - it's a special IRA with special restrictions, but an IRA nonetheless, not a "qualified plan". There is NO affect on accumulated money and you don't have to do anything special with the accumulated money, just leave it in the IRAs(s)...or the participants can take it out or roll it over somewhere else, subject to the SIMPLE restrictions for the first two years. The only problem is the current year contributions. I think you've described their treatment properly (they "just" become excess IRA contributions and probably must be withdrawn). I used to think that it would never be worth the trouble to start a new plan while a SIMPLE had already begun for the year, but maybe it's not the end of the world, especially if done early in the year.

My point is that someone can be a statutory employee for one source of income and an independent contractor for another. I'm actually pretty confident of that, but hey, I've been wrong before.

I think you might be giving up too easily. If the 1099 income is not covered by the insurance company plan (and I don't know that that's been determined), I don't see why you couldn't set up a plan for it. Just because he is a statutory employee for some income doesn't mean the rest is excluded - the fact that it is coming from a controlled group doesn't mean anything, IMO. (I admit to thinking on logical grounds, which is dangerous in this business, but it doesn't make sense that legitimate earned income should be ineligible for any retirement plan coverage at all.)

I don't think there's any doubt that if the compensation is properly classified as 1099 that it does not count as plan compensation. It's unusual, but if it is carved out as contract work it might indeed be properly classified.