TPAnnie

I uploaded fake dates of birth, hire and termination for a takeover plan. I didn't realize I couldn't just upload over the top of the dates, but rather I need to go into history maintenance and delete all records for each person. Because there are so many, it's taking forever. Is there any way to globally delete all date history for the plan? thanks!

Thank you all for your suggestions, I'm looking into them all now. It was actually the Benefits Insights program that made us start questioning how safe Microsoft password protection in emailing really is. I won't claim to understand it all, but in researching it, I've read that microsoft's passwording and encryption is not strong enough cracking applications are run against it. That, added to the emailing of the file, rather than uploading to a secure server, make it a weak defense. I haven't been questioned by a client yet, but I want to be ready for the inevitable. Thank you all again!

I don't think my M/S Office password protection will cut it anymore. Mind sharing how you receive your emailed census data securely?

Thank Gov't for safe harbors! haha I agree, compiling a list seems nightmarish and where to draw the line even more so. It's definitely easier to say here are the confines, fit into them, but not always possible when clients want to test the limits.

Thank you for your response. Moving forward, should we need to create a list of reasons, can anything be put into this list? For instance, could the list contain "for legal expenses" or "for an auto"? Are there any guidelines for what may included on this list? Thanks!

My plan does not use the Safe Harbor Rules for Hardship, rather it's a VS that uses Facts & Circumstances for Hardship. Problem is, I don't know how to apply F&C. Does anyone have any guidelines to determine if something qualifies based on F&C? PP is facing legal expenses defending himself against criminal charges by the US Govt. He has no other assets and plan does not allow loans. Any guidance would be most appreciated!

Thank you!!

To anyone using RGF/Relius Web Client: In RGF, on the 2009 Plan Information Worksheet, under Signers, Service Providers, & Interested Individuals, are you checking the boxes "Rank" or "Enable Web Client Workflow"? In Relius general FAQs, there's a question dated 5/7/10 that says: "the Rank or Enable Web Client Workflow fields should NOT be selected at this time". I'm just wondering if this is still the relevant answer today...or if it matters if they're checked anymore? Anyone know? thanks!

Hi! Our firm administers a PS plan whose document states distributions will occur upon close of plan year coincident with or next following date of term, however over each of the past 3 years, we've inadvertently distributed a participant immediately upon termination. (There were roughly 10 distributions per year that occurred correctly.) Each mistake happened unintentionally, probably because of a "squeaky wheel". Is this a disqualifying event? We've been tagged for audit and are trying to determine if there is any type of self-correction method - or if it's too late. TIA! Annie :-)

I think I heard or read somewhere that plan qualification depends on administering the plan in accordance with the provisions of the plan document. I'm with Bird. Is this a disqualifying event? Our plan inadvertently allowed an immediate payout though the doc says after plan year end. We've been tagged for audit and are trying to determine if it's a disqualifying event or if there is a self-correction method. TIA! Annie :-)

Hi all! I have a small Safe Harbor non-elective 401k plan with integrated PS allocation and discretionary match provisions. The plan is top heavy. I usually max out the owner, which results in a pretty large contribution (dollar wise, anyway) to the other employees, as there are several non-owner HCEs and high paid NHCEs. The owner would like to exclude all non-owner HCEs and select NHCEs from PS and Match. The “select” NHCEs are not set in stone, but rather will be determined annually based on the highest-paid NHCEs that can be excluded and still pass coverage. I’m having a hard time figuring out whether the document accommodates what he wants….or if it’s even kosher… Is it possible to incorporate language such as “PS/Match excludes highest paid NHCEs” without defining them by name or division? Thanks!

Ok, that is exactly our reasoning. But, because it is logical, makes perfect sense...and not to mention both the 2008 AND 2009 401(k) Answer Book specifically says that PPA changed the year of reporting for 402(g) refunds...we started to doubt our position. Jim's comment that someone missed the editing seems plausible for one year, though it's hard to believe no one mentioned the error in 2008 so now it's been missed again for the 2009 edition. Wonder if anyone related to that book peruses this forum? I really appreciate everyone's help on this! Thanks so much! Annie

Lou...we agree, we can't find WRERA referencing 402g taxability either. Nor PPA. Jim, do you feel PPA addressed the tax year of excess deferrals at the same time as excess contributions/aggregate contributions? Or, is it somewhere else? I've got a pretty significant excess deferral for an owner, and want to make sure I explain the tax part correctly. By the way, I called the fund company (since they issue the 1099s) to find out what their position was...I gave them specifics, even the pp's account. They confirmed the excess deferral is taxable in 2008 on an 09 1099R code P, and the gain/loss is reported for 2009 on a 2009 1099R code 8. I am hesitant using them as my decision-maker though, as I can envision 2009 1099R instructions changing their decision, yet I'm the one that gave the bad information.

Hi! I'm sorry, I should have been more clear...both questions 1 and 2 were in different sections of the same answer book - a 2009 answer book at that. Maybe Q2 does apply to plan years prior to 1/1/08, but I would think it would be noted something to the effect of "this is the old, this is the new" if that was the case. Regardless, I can't find anything other than this Q&A that says PPA applies to 402(g). Thanks in advance for any more help!!

I'm trying to figure out whether a 2008 excess deferral being distributed prior to 4/15/09 is taxable to the participant as 2008 income or 2009 income. Though it's clear the earning/loss is taxable income in the year distributed, all my research leads to conflicting answers about the actual excess. One contradiction in the same book! 1) What year is the excess deferral taxable to the pp? 2) Can anyone distinguish between these two Q&As? Q1: How are distributions of pre-tax excess deferrals taxed to the participant? A1: For plan years beginning on January 1, 2008, or later, distributions of excess deferrals, as adjusted for earnings (including gap period earnings (see chapter 9)), are taxed to the participant in the year distributed. This PPA-enacted rule simplifies the process for plan participants, since they no longer are at risk of having to file an amended return in the event excess deferrals are returned to them after they have filed their prior year's tax return. There is no penalty tax for distribution of pre-tax excess deferral amounts made to participants who are under age 591/2 . Q2: What is the tax treatment of corrective distributions to employees? A2: Because the amount of excess deferrals is includable in the participant's gross income for the calendar year in which the excess deferral is made, a timely corrective distribution of excess deferrals is not included in the participant's gross income for the distribution year. However, the income or loss allocable to excess deferrals is taken into account in determining the participant's gross income for the taxable year in which the distribution of excess deferrals occurs. Our research indicates PPA speaks only to excess contributions and excess aggregate cotnributions (failed ADP/ACP refunds). However, Q1:A1 above implies that PPA also addresses excess deferrals. thanks so much! Annie

Thank you both for your help! I appreciate it so much, take care, Annie

I have a 2-group cross-tested plan - Group 1 is MGMT (and all are HCE); Group 2 is Anyone Not in Group 1 (and is made up of about 25% HCEs). The employer was hoping to only need to fund 1/3 HCE gateway amount, but due to failing tests, it's taking about twice that amount. Is this allowed: I allocate the minimum gateway amount and fail the testing. So then I apply corrective amendment increasing the allocation rate for ONLY the NHCEs in Group 2, keeping the Group 2 HCEs at the original allocation? Is there any basis for this? thanks! Annie

Hi Tom, I tried that, but then it just puts two payrolls in both plans. For instance, the employee's census screen shows annual comp of $52K, AND annual comp 2 of $40K (the 9 month comp). Is there a way to tell the plan to use only one of those payrolls, not both? My work-around for the time being was to enter 9 month comp as salary and the remaining 3 month comp as commission. Then I just excluded commissions in my MP plan. Not ideal, and hopefully it doesn't affect anything else, but so far it seems to be working. Or at least the contribution allocated correctly...now I just need to see if it all tests right. Thanks for your help!! Annie

I have an employer who has two plans, a MP and a SH401k. The MP contribution was frozen 9 months into the year, so I will be using comp only for that period. My SH401k plan will have teh full year comp. How do you use two different compensations (periods) for the same employer?

I apologize in advance if this is not the right forum... I'm so confused by this issue, I'm not sure where to turn. The employer is a sole proprietor, no other employees. He had a DB plan which was terminated at the end of 2005. For a few years, 2003-2005, the contributions required to meet the DB minimum funding standards exceeded the amount that was deductible, so he was making required contributions that weren’t deductible (for a sole proprietor, the maximum deduction is limited to earned income minus ½ se tax). He was able to deduct some of those contributions in subsequent years, subject to the deduction limitation in those subsequent years. After the 2006 tax deduction, he still has about $60,000 of contributions that were made that have not yet been deducted. He now has a 401k profit sharing plan. For 2007 he has earned income minus ½ se tax of about $200,000. He’d like to get the maximum deduction possible, using both as much of the $60,000 plus as much current 401k and profit sharing contribution as possible. The question is, can he deduct some/all of the $60,000 PLUS make deductible 401k and profit sharing contributions for 2007? If so, how much? Or, if he makes the maximum $50,000 401k/profit sharing contributions (he’s over age 50), is that $50,000 the maximum deduction allowable for 2007, and he’ll have to continue to carry forward the $60,000 for deduction is some future year? Or is the deduction subject to the DB/DC combined plan deduction rules, even though the DB is not currently in existence and there is no current contribution to the DB. Thanks in advance for any insight!!

I want to thank you all for the very detailed replies. I will go over these issues with the trustee and I'm going to guess they'll decide this is much too involved. (Hopefully!) Thank you again!! Annie

The trust allows for all participants to self-direct all funds. It also allows real estate as an investment option. When the trustee/owner invested in his real estate investment, he gave all employees the option to choose that specific property investment as an election. But, does each future property investment have to be given as an election to each employee, or is the option to purchase real estate enough of an option? For instance, if Joe NonHCE finds a piece of Texas property he wants to invest in as part of his self-directed account, do the trustees need to let every plan participant choose whether they want to invest in that same Texas property too? And, would your answer change if it was Susie HCE purchasing the Texas property? Thanks!

A terminated non-owner participant wants to purchase real estate in his self-directed 401(k)/PSP. The trustee is fine with this, as he himself has real estate as one of his investments, but wants to know if all the same rules regarding real estate investments apply to a non-fiduciary. Also, does the participant's real estate investment need to be offered to all plan participants - or is the option of finding their own enough? Are there any other special things to consider? TIA!!

Hi! I might be behind on this, as we're still working with Relius Admin 11.1.3, but does the future release eliminate teh need for SSN as an identifier? We're facing more and more employers who are reluctant to provide SSNs, and using fake SSNs becomes a whole other nightmare (since we're on standalones). I know some pension software (ASC for instance) just uses employee name, no SSN or ER ID necessary. If 12.0 doesn't accomadate this, has anyone heard of Corbel going this route in the future? thanks!

SMM, can you indicate where online you found this? We are researching this exact issue and cannot find anything that tells us that the different tests use the different dates of entry. thanks!