movedon

I'm not bird, but yes, it's a contribution.

I believe since the contributions are corrective contributions, they count as annual additions for the years the contributions apply to (not the current year).

Thanks for the link chc93. I missed that thread. Frankly, I find all the evidence unsatisfying (ambiguous preambles, examples in proposed regs that didn't make it into the final regs, oral comments made by IRS reps twenty years ago), but then I am pretty hardheaded. How is there a "correction period" in the first place if there is no failure? Whatever, if it benefits my client, I'll go for it - but I'll probably always mutter something about how the IRS might possibly challenge it, maybe, if they have any sense. They don't.

I believe the answer is in your document. If it says nonkeys don't get the top heavy minimum unless they're employed on the last day of the year, and there's no mention of an exception for death, then the dead guy gets no contribution (unless he died on 12/31).

Each rate of match (the "service levels") is tested for current availability. The increasing rate of match in the 10 year service tier is an effective availability issue.

Most group annuities I have seen used to fund qualified plans have a single surrender period that begins when the contract is signed or the first deposit is made, not a new surrender period for each contribution. In those cases, no, I've never seen a problem. What sort of problem are you running into?

That's interesting. They seem to go along with the idea, but then they also seem to fundamentally not understand something about the question when they say that either approach would require an 11(g) amendment. Giving a greater allocation to the NHCEs does not require an amendment if this is all happening timely during the normal year end valuation/contribution calc/testing procedure. They seem to be assuming that the calc and contribution and valuation were all done and that the failure was subsequently discovered. My issue remains - assuming the tests can pass without an 11(g) amendment, is an 11(g) amendment appropriate? Can you do an 11(g) amendment without a failure? Or can you fail intentionally only to turn around and do an 11(g) amendment? Seems like silliness to me. Am I the only one?

So someone that defers $10 in a month gets $0 in match? That's an increasing tier formula, and I'd say there's an effective availability question there.

Nope.

I remember this issue being discussed here a few years ago, and I was in the minority then that thought the whole thing was too fishy. My theory is that the purpose of an 11(g) amendment is to cause a plan to pass testing where the plan cannot pass testing without an amendment. If the plan can pass testing as-is simply by giving a greater contribution to NHCEs, then the amendment is impermissable. That was (and still is) my opinion, not the prevailing opinion, and it's just theory - given the safety in numbers and the opinion of industry leaders (I think Sal discusses the issue in the EOB), I generally lay the issue out for clients and let them decide. Usually they go for it. I'd be interested to see anything from the IRS on the subject. You say there is a Q&A, austin?

I would look at the definition of 414(s) comp in the plan and determine whether you have the flexibility to use any definition of comp for testing purposes other than the plan definition of comp. Assuming you do, you don't have a problem as long as all nondiscrimination testing is satisfied when you use a definition of comp for testing that satisfies 414(s). You'll probably need to general test any nonelective contributions. If that doesn't work, then yeah, I guess you would need to amend the comp definition, but I don't think I've ever seen it come to that.

Que?

IRS phone conference = free CE. And that's about it.

I also ignored a few of these a couple years back and nothing ever happened.

You may have heard right - I wasn't paying very close attention on the call. Wouldn't be the first time an IRS rep said something stupid and wrong on one of those calls.

If I heard the IRS lady on the call right the other day, "prime" as a definition of the rate in the plan document or loan policy is not reasonable. I can agree with that, as long as the IRS lady would agree that the prevailing local commercial rate for a similar loan (as the rate should be described in any decent plan document or loan policy) might be more, less or equal to prime at any point in time. Both the prime rate and a five year secured loan from my bank are currently at 3.25%. I don't see the controversy or difficulty in this. "Prime" is not reasonable. A rate that happens to be the same as or less than prime might be. If plan sponsors have a problem in regard to rates it is that they don't get credit scores for the participants and so have no idea whether or not the person would qualify for bettter or worse rates in an arms length situation.

I'm not sure if this question was for me, but I'll answer it. I am familiar with the BL jobs boards, and have made good use of them over the years as both a job searcher and a talent searcher. They are great, but they are not effective for what I'm talking about - which is more of a service marketplace for BL members who would offer services to one another. I envision a place where people that sort of know each other might engage in commerce in a more personal way than by ads and resumes. Your mention of the job ads does raise a good point, and that is the potential misuse of such a classifieds or marketplace forum. I'm not privy to the finances of BL, but I assume it's not a nonprofit operation. I also assume that it's not funding Dave's well known hobbies of buying and selling private islands and platinum mines. A classifieds forum would need rules to insure it didn't siphon off other ad revenue, and would need to be moderated to both protect BL's finances and to keep the forum relevant. It also doesn't need to be free. I, for one, would pay for access to such a forum. A "membership fee" would also keep out the riff-raff and Vi@gr@-sellers. Man, what a great idea. Make the checks out to "lippy", Dave!

I've also wondered what's appropriate around here in this regard. It's occurred to me that I might like to offer my services as a contract type employee to fellow BenefitsLinkers, but I don't really want to "advertise" or out myself on the boards from the obscurity of my screen name. I also don't want to be a board spammer. Dave, have you ever given any thought to a "classifieds" forum? Something moderated (no baldness treatments) for bona fide BenefitsLinkers?

Hey, Mike. I don't understand this comment re "bifurcation." The SE deduction for 2011 is not half of the reduced SE tax - it's still 7.65%, which is also still the correct amount to reduce earned income for the pension calc. In any event, Mike's calc is correct - within a buck or two.

If you look at the instructions for the SE for 2011, you'll see that the deduction is still 7.65%

I'd look at what group he was in at the point during the year when he satisfied the accrual requirement for the year.

Last Friday's IRS phone conference re ESOP DL submissions said they are currently working on submissions from September 2008, so apparently they've picked up the pace in the last six days.

Why wouldn't the employer just remove the Trustee and appoint a new one?

Best reason yet to hate the Yankees!

ur weding dres r suck.