MoShawn

For your first question, any contribution for a Key employee will trigger the TH minimum, even a deferral. For your second question, if they are no longer owners and are not officers they will remain Former Key employees.

I believe I have encountered a similar situation. Participant deferred $22,500 to his 401(k) plan (calendar year 2012), then received a W-2 from side employment with $300 listed in Box 14 with a code 414H. From what I am reading here and elsewhere, it does not appear that there is an issue with 402(g) for this individual. Would everyone agree with this?

I'm used to documents designed as loosely as possible. Doesn't specify who needs to receive it or in what percentages/ratios. As long as it fit under the targeted QNEC rules in the regs, any allocation was fair game.

Why is this using both methods? Why can't you "target" the bottom group for up to 5% and the rest for up to 3%? The whole thing would be a targeted QNEC with the population being everyone in the test.

1) If the document doesn't provide the limit that Tom suggested, then you would need to fund the $100 or you would be violating the plan's matching formula. 2) The comment from BG5150 is not in regard to treating match as catch-up, but rather in whether or not catch-up contributions are matched under the plan. Your wording of "calculated reduction for Match" seems to point to this. Did you mean the amount to be refunded to correct the failed test? 3) If the $470.21 is due to a failed ACP Test, the company does not get to "take back" that money. It is distributed to the particiant.

It should be reclassifying it as catch-up for 2012. Not sure if you need to run a catch-up transaction for that or not. Been a while since I used Relius.

I respectively disagree. See Rev. Proc. 2008-50 Apendix A.05(2): © If the employee should have been eligible for but did not receive an allocation of employer matching contributions under a non-safe harbor plan because he or she was not given the opportunity to make elective deferrals, the employer should make a QNEC on behalf of the affected employee. (d) If the employee was not provided the opportunity to elect and make elective deferrals ... The required QNEC on behalf of the excluded employee is equal to ... (ii) the matching contribution that would apply based on the missed deferral. (f) If the employee was improperly excluded from an allocation of employer matching contributions because he or she was not given the opportunity to make after-tax employee contributions ... the employer must make a QNEC on behalf of the affected employee. Match related to missed contributions is also treated as a QNEC.

Did anyone have issues with any other software vendor? FT William? ASC? Just wondering.

I should think not! I'm not sure what DOL rules apply to employment of the deceased, but I would think the smell alone would make this a less than desirable result.

From spousal attribution. Father and Mother are each deemed to own 40%, 40% and 48% of A, C and E, respectively.

I'll take a stab... Owners 7-10 mean nothing as none of them have ownership in more than one of the entities. Father and Mother are attributed each other's ownership in each entity. A+B+C is one controlled group A+C+E is an overlapping controlled group Poor D gets left out in the cold

12/31/10 determination to determine plan's TH status for 2011 = Key 12/31/11 determination to determine plan's TH status for 2012 = Former Key

Are you talking about 2012 testing? If they were hired in 2011 with a 1 year service requirement, then they would not be eligible until 2012. Then they would only get the TH for 2011 (if eligible for some other component of the plan) and would not be eligible for the gateway. As far as statutory exclusions, I think you're either testing the statutory excludable employees separately, or you're not. I don't think you can pick and choose.

We are reviewing prior returns for a potential client, and discovered that all previous forms have been filed using calendar year dates when the document specifically states that the plan is to coincide with the company's fiscal year (8/31). What is the correction in this instance? It appears that the actual data used in completing the form was correct (9/1 to 8/31), just the dates on the form were wrong. Would all prior filings need to be amended? Just the last 3?

Trying to calculate the amount for distribution for a terminated employee age 71 in 2011. Plan has a 5-year payout schedule for terminees (1/5 per year). Account balance at 12/31/10 is $25,000. Plan formula (for year 1) yields a distribution amount of $5,000. RMD amount would be approx $945. I am unsure whether the individual should receive both amounts, or receive the $945 as ineligible for rollover then the remaining $4,055 as an eligible rollover distribution. I do not see language in the document that addresses items such as this. Thoughts?

Can anyone clarify the requirement in PPA for a DB sponsor to post the Schedule SB on an "intranet used for the purpose of communicating with employees" if it has one? There has been no guidance from DOL regarding this that we are aware of, and now have a client asking the question.

Forgot to mention that part - they were terminated prior to 12/15 with no vesting.

An amendment is made 12/15 (not an -11g amendment) to provide an additional contribution to 5 individuals who were not otherwise eligible in order to pass testing. Plan subsequently terminates on 12/31. Are these 5 required to be vested?

I'm now thinking it depends upon your interpretation: 48 ------- 2(9+3) *or* 48 --- x (9+3) 2

Apparently simple algebra problem posted on another site with very conflicting answers. Any thoughts? 48÷2(9+3)

Yes, Z started up its own plan after the split. They are not really the concern, since they are a separate employer. Thanks for the feedback.

XYZ Co maintains a 401(k) plan covering all of its employees. Ownership is X=14%, Y=14% and Z=14% (the other 58% is owned by outside entities). During 2010, two new companies are formed: XY Co is owned 50% by X and 50% by Y. Z Co is owned 100% by Z. XYZ Co remains in existance to collect old receipts, after the completion of which it will presumably be shut down. Z Co maintains its own 401(k) plan. XY Co employees are currently not covered under any plan. They are not a controlled group, and we do not believe an affiliated service group, since no "work" is being done by XYZ Co, just collection of outstanding receipts. 1. Can XYZ Co 401(k) Plan simply be amended to make XY Co the new plan sponsor? 2. Do we need to terminate the plan and begin a new one? Begin a new plan and merge? 3. Other suggestions I may be overlooking?

I have a similar question. A takeover plan has early retirement at age 60 with 7 years of service. The plan has 3-year cliff vesting, and permits immediate distribution on termination of employment. Considering the early retirement provision cannot "benefit" anyone as it is currently written, is it still a protected benefit? No one can possibly be in a worse position if it were removed.

Can two companies be considered as performing a management function for a single client organization? Example: Bob owns 100% of company A Dave owns 100% of company B Each owns 50% of company C Company C is a materials broker. A and B perform the sales function for C and, receive all of their income from C. Either A or B has the right to hire or fire from C. I know this is not a controlled group, nor could it be an A-Org group since it is not a professional service company. I am less sure when getting into whether it is a B-Org group or a management function group. Opinions?

Currently attempting to determine the 2010 testing wages (414(s)) for an HCE in a plan using high 3-year average compensation. The individual's highest three years (without limiting for 401(a)(17)) are: 1999 - $199,999.92 2000 - $199,999.92 2001 - $275,000.00 Section 611© of EGTRRA allowed the use of the 2002 401(a)(17) limit of $200,000 for pre-2002 years. Is this still true? I understand the the 2007 regs have re-interpreted how this is determined, and the 401(a)(17) limit for the year in question applies? EGTRRA 611© = 199,999.92 + 199,999.92 + 200,000.00 = 199,999.95 2007 Regs? = 160,000.00 + 170,000.00 + 170,000.00 = 166,666.67 2010 Limits? = 199,999.92 + 199,999.92 + 245,000.00 = 214,999.95 Any opinions?