BG5150

I understand that an RMD in the year of death gets calculated as if the person was still living. Does the assumption of still living apply to age consideration as well? For example: someone is 73 and dies on Feb 1, 2013, and her birthday is October 11. Do use the life expectancy factor for 73 (when she died) or 74, the age would have turned in 2013?

What kind of plan is it? I've done it numerous times in a Volume Submitter without filing for a determination letter.

Say this was allowable. Vendor pays investment house send $2,500 c/o the Plan. How does the asset provider know how to break down that $2,500? I would think they need specific instructions from the Employer. Most daily shops can handle doing ACH debits. So when the ER gives them the breakdown, the provider can just debit the ER's account. I don't see how it could get any easier than that? Plus, it would be much easier to verify a payment to the Trust if it came from the ER account. How do you know Vendor send their portion of the "contribution" this month.

Though I don't see any deminimus amount anywhere, I would not hesitate to do no refund in this case. If an agent is going to bust you for something like that, he or she will more than likely come up with something else, too.

Have you checked with the people who drafted the document? (The Volume Submitter or attorney) They might be able to shed some light on the situation.

Just pay him "under the table" and not even worry about it any more...

Does the service spanning rules apply anywhere there? I didn't peruse the data given.

Could this be considered a Mistake of Fact and the funds sent back to the company? I'd prefer the money stay in the trust and the ER just short the next wire by the amount "forfeited." Actually saves a step, and it's a zero sum game in the end.

...and be used to offset future contributions and NOT used toward fees.

Also, if it is done "pro rata" you can't have salary get 6% and bonus get 3%. Somebody with $70,000 salary and $30,000 bonus gets $5,100 (5.1%), but someone with just $100,000 salary & no bonus gets $6,000 (6%). So that cannot be pro rata.

Which comes first? Bonus comp or regular comp? What if I made $1,000,000 Through the middle of December and a bonus of $150,000 was paid to me at the end of the year. My PLAN comp is still going to be $250,000. Do I get 6% of that? 9%? 3%?

The client may send in the PS per payroll, but what does the document say is the basis of the PS? Per payroll or annual? I don't think I have any clients that do PS per payroll. match, yes, but PS, no.

The only way determining an HCE could have a discretionary component is if you are using the top paid group and there are a bunch of employees who have the exact same compensation and there are more of them that would in into the TPG. Then you get to pick an choose who is in the TPG and who is not. As a TPA I would not make that decision, but have the client make the call. Maybe give some suggestions, but never just pick on my own. Everything else is by code.

But Congress doesn't make the stuff up all by themselves. They get "experts" to help out...

Why age 55? I think the people at the IRS said, "why not?"

So, git 'er done BEFORE April 1. What's the correction for a missed ACA if there's more than 9 months left?

In the two-step process of correcting an ADP test, you first determine the total dollar amount that needs to be removed from the plan by leveling down the HCE %'s starting with the higher %'s. The second step is to determine the excess contributions by leveling down the HCE's contributions, starting with the highest. It is then you know what each person's excess contribution is and then you can apply any left-over catchup in order to offset any refund. In your case, only the highest-deferring HCE has an excess contribution. And since he is not yet 50, there is nothing to re characterize.

I take it to mean someone who ceased to be employed after reaching NRA (or ERA if applicable) There is a difference between "retirement" and getting to "retirement age."

So, in other words, there isn't a "legally enforceable agreement" that says it's due on termination. Code says that the agreement has to include the "repayment schedule." Would that also mean: if and when the loan would be due and payable (right?)

Was that the loan policy in effect when the loan was taken? Where are the original loan agreements the participant signed?

What does the loan agreement say? Ours usually say that the loan will be due and payable upon termination of service.

If there was a "more than" somewhere in there, the answer might be different.

Sounds like the account was not registered as a plan account, but a regular ol' brokerage account.

If testing and comp and contributions are on a calendar year basis, what's the point of having an off-calendar year plan?

Tom, if you use "calendar year" comp, wouldn't you still use plan year deferrals and other contributions in the testing?