BG5150

And what happens if someone gets over-matched for Safe Harbor or gets too much SHNEC? I would always suggest the extra gets forfeited. Would I not be allowed to use that money to offset future Safe Harbor contributions?

And, to me, it doesn't make sense that dollars in an account have a vesting associated with them, rather than the account itself. If I put $1,000 in for Susie's PS in 2005 and she leaves right away and there is $1,010 forfeited. I don't understand why those dollars I put in and the naive earnings dollars (how did they know they wouldn't be considered fully-valued money?) couldn't be used later for whatever purpose. If anything, I'm "upgrading" those dollars from second-class, vestable citizens to Alpha Citizens being 100% vested after being applied for Safe Harbor. Plus, you'd think the IRS would be all on board for this, as it would mean more revenue, because the ER doesn't take a deduction for the re-use of the forfeiture money, yet it would take a deduction when it has to take the money from its own coffers.

Has anyone been through an audit where some forfeitures were used to cover some of the SH contributions? Are the auditors actually disallowing this?

What happens if someone becomes an officer mid-year? Or ceases to be one mid-year?

...and beneficiaries get one, too. (not sure about QDRO accounts)

I told my folks to sign it with the date it was e-filed. If they e-filed it on 10/12 but don't actually sign the paper copy (with 10/12 as the date) until November, who's gonna know? I doubt the DoL will be showing up at people's doors demanding the signed 5500 on Halloween.

Got the W2's from a client the other day. "Is this all of them," I ask. "You bet," she says. Wow! 100% of the employees deferred in 2009! Cool! *lightbulb* Call her back: "Hey, did everyone pu into the 401(k) last year?" "No, why?" "Because all of the W2's have amounts in 12D. That indicates they were putting money away." "Oh, I only sent you the ones who were doing 401(k). Do you need the others?" /facepalm

True. In all my different positions in my pension career, there seems to be an enormous amount of time and effort into determining if there are 85 participants in the plan, or, wait, didn't that lady terminate in December 2007 and January 2008? Maybe we really only have 84 participants. I'd better call, send e-mails and faxes and registered letters and drive over tot he client's office to take a look at the payroll systems just to make sure...

How much money are people getting? In my experience, people were getting like 50 cents to a few dollars. $90 I think was the most I've allocated. If it's under $200 you don't have to give the the opportunity to roll the money over, as there is no mandatory withholding.

True. Earnings on late contributions is not an administrative expense.

But how does the Trustee know the checks were deliverd? They could still be in a mail sack put in Jerry's storage space by Newman.

I'm probably one of the last people to ask, as I know almost nothing about creating reports. What I do gather, however, is that you are allowed to pull out different data elements (to borrow an OmniPoint word). From the list of Database elements I have, there is something called HCEREASONCD. (it's in the table RPTEE) The description is: So, you can maybe pull people with a value of either 1 or 2 for this field. People with indirect ownership are still considered HCE's under this, I would think. However, this might not work for terminated people.

I would say, perhaps the gateway was satisfied by using the lesser of the two, but if the 5% figure was lower and you only gave that, then the TH would not be satisfied.

If a plan has its assets in a pooled account, and participants take loans, does the interest get paid back to the trust as a whole, or do we need to separately account for the interest per person who took a loan?

Or even putting the plan on an entirely new document with the new provider...

I would say that the TH Min would be satisfied even with a refund. At the end of the year, the Employer still gets a deduction on the match amount, right? The ER made a contribution to the participant's account that satisfied the TH requirement. What should it matter if there was a subsequent distribution of that money?

So what do we do in this case: We have a controlled group situation With companies A & B. Company A is Safe Harbor NEC Company B is straight 401(k) with ADP testing They cannot pass coverage independently for 2011 (2010 is okay, I think). Do I have to make company B Safe Harbor for 2011? Do I have to make SH to A and do ADP testing on combined group?

Amend the document to Facts & Circumstances hardship instead of safe harbor events.

Maybe you should get into the auditing game. Sounds like there's some cash to be made...

I've always defaulted it as of 12/31.

Is the mother primary beneficiary?

Start talking to the client about Safe Harbor for next year.

If this is the way to go, you had asked what the deferral rate would be since there was no ADP test to determine that. What does the plan doc say about ADP/ACP testing in the first year. Many times, it will allow you to do a default 3% for the NHCE's. So, you'd have your percentage there. That said, I think you would have other concerns. What about the notification requirements under ERISA Title I? More specifically, the SPD? Did anyone get these? Someone asked about the 5500. If the plan was in existence, even unfunded, then I believe that a form 5500 should have been submitted because there were participants in the plan. ERISA also states that an SAR must be given to participants. ANOTHER concern: the plan that was effective 1/1/08--was that on an EGTRRA document? Or GUST? Has the plan been restated and have all the latest mandatory amendments been completed and signed? (and any SMM's that would result?)

And, was a trust created? I thought there had to be a trust before a plan could be in effect.

To be honest, who is going to know other than the boss and the guy who wrote the document? Did it get sent in for an approval letter?