BG5150

ETA, what section of the BPD was that in?

I have a plan that is failing the 414(s) test on the percentage test. I did not run it through the rate group test. They are excluding bonuses, and everyone is getting one. My difference is ~5.4% higher for HCEs. This is a SH Match plan that is determined on a payroll basis (not annual). Because no deferrals are taken from bonuses, there is no match. Do I even need to have a correction? If so, what would it be?

We have a plan that withheld 401(k) deferrals from bonuses, which are excluded in the plan document. So we need to return the deferrals to the participants. For corrective contributions, that is, when we need to GIVE the participatn something, we've been using the DOL calculator for earnings out of convenience. Can this same method be used when calc'ing earnings on funds LEAVING the plan? If the participant experienced a loss in real life, then using the DOL figures will jsut serve to exacerbate the losses. So how do you figure out the earnings for funds leaving the plan in practice? (My software cannot accomplish this)

Right. 2012, too. If you go outside the prescribed method in EPCRS, you don't necessarliy have to go thru VCP. Those are the acceptED corrections, but not the only acceptABLE onces.

Will this be the participant's primary residence? If so, yes.

Don't forget, you can still correct 2013 & 2014 under SCP.

Who defers 100% anyway?

If the fact pattern is right (that they were able to file as a small plan for 2013-14, and if the opening count for '15 is 120 or less, they can continue to file as a small plan. (Why did they file a 5500 with Sched I instead of an SF? Is it because of non-qualifying assets?)

I would say so. (Don't forget to add 3H to the plan characteristic codes!)

As long as 5500's are filed, whether 1 participant or not, SF or EZ, using the same tax id and plan number, I think you are ok. I agree with the above that says even if you are under $250k, still file the EZ. Or, you can wait for the "you didn't file for 20XX" letter and explain it then. Probably take more time to put together a response (and a response to their response) than to just create the EZ, sign it and put a stamp on it.

Side note: I know when you file an amended return at EBSA, it "overwrites" the previous one; at least the one that can be seen online. Does the DOL keep the original(s)?

Don't forget to mark it an an amended return...

In these cases, I just do what the auditor asks (after bringing up my concern), document the file for next year and move on.

I just had an auditor request this very thing.

I would proffer, in answer to # 2, that the employer gets a dedcution for those ineligible contributions, so they should stay as contributions in the Schedule H. #3 makes sense if #2 is followed.

This is a selection from one of our AAs: (note letter "e") a. As of the last day of the Plan Year in which the Plan Administrator distributes the Participant's entire vested interest. b. In the Plan Year in which the Participant's 5th consecutive Break in Service occurs. c. As of the Valuation Date coincident with or next following the Distribution Determination Date. (See Section G.4.) d. As of the earlier of the last day of the Plan Year in which the Plan Administrator distributes the Participant's entire vested interest, or the last day of the Plan Year of the 5th consecutive Break in Service. e. In the Plan Year in which the 1st Break in Service occurs. f. Forfeitures shall be allocated in the Plan Year following the Plan Year in which they are determined.

I think it's a plan document issue. I don't think you have to wait 5 yrs (or until the ppt takes a distribution).

You can do a QNEC enough to pass the test, if that amount is lower. But no way around no QNECs, I believe.

You can test on whatever compensation that is allwoed int he testing section of your plan documetn. Oftentimes, it'll be any comp that fits 414(s)

GG, April means that if more than 5% (or is it 10%?) of the assets are non-qualifying, you have to file a "regular" 5500 (with sched I for small plans) instead of the SF. However, with one-participant plans that can be filed on EZ, I don't think you would have to do the full fledged 5500 if the assets didn't qualify.

What if I "prepare" the forms, but when I send it to the sponsor for the first time, they decide to make changes to my numbers? After I make the changes, am I still the perparer?

From EPCRS: Notice the piece on deferrals mentions QNEC sepcifically, but the match piece does not.

Did the person roll the money over?

I thnk the crux of it is whether or not the person is performing services to the company.

Once a person is eligible for and enters the plan, then you look at the requirements to get an allocation. You will use the plan year as the basis. Not just the period eligible for the plan. Then if the person satisfies the conditions to receive an allocation, you look at the formula. So, in your case, it will be based on participation compensation only.