BG5150

Yes, as long as it passes the coverage test.

401(a)(9)?

Check EPCRS. There are several 1-to-1 QNEC allocation methods allowed; the QNEC doesn't necessarily need to go to all eligible NHCE's that year. You may be able to whittle down the number of people to whom you must make the contribution.

I think if the count goes under 80, you MUST complete a small plan filing, and cannot do the full 5500. If you go under 100, you may file an SF, but don't have to. Under 80 and no Schedule H for you!

RMDs have been around for years and years. I'm sure if the RMD had to be taken pro rata an agent or investigator or two would have brought this up a long time ago.

Has anyone ever been taken to task for an incorrect or missing feature code on the 5500? What are the ramifications?

yep. for most stuff.

The document we use a lot has the option of choosing whether the loan availability amount is based on total vested value, or the vested value of only the sources that are considered as collateral.

Could you have an HCE who owns 2%, is a Key EE and has 15 years of participation? IF so, that person would be in groups 2 & 4.

I've seen some people in our business treat The Code as "more what you'd call 'guidelines' than actual rules."

I don't think there is a true Sadie Hawkins day. It's more of a concept. Here's the wiki page: http://en.wikipedia.org/wiki/Sadie_Hawkins_Day It did start on 11/13 in Li'l Abner. The town bachelors would all line up and run. A bit later, the chosen spinster (Sadie, in the original instance) chases after the men. "Th' one she ketches'll be her husbin." Each year in Dogpatch it would continue. The strip would run a similar story in early November for a number of years. But I don't think it's an "official" date. (no pun intended)

The IRS-approved Volume Submitter we often use, Corbel, allows for wither same-year or year-following allocation of forfs.

I'm getting some conflicting advice from some of the "experts" we deal with. (That wasn't meant as a sarcastic reference to experts, they really do know their stuff.)

I believe they could also be used to reinstate a terminated participant's account in the event of a "buy back." And, generally, if the plan document doesn't specifically allow for it, it's not allowed.

The DoL says you can. So does the IRS. However, only if it does not put a "significant detriment" to the participant (rev rul 2004-10) Does anyone see my scheme as having a significant detriment on the participants?

We were thinking of taking administration fees of around $18 a quarter from the accounts of terminated participants, and the ER will pay for the active accounts. This seems permissible when the fees are taking pro rata, but these are per capita fees. And Rev Rul 2004-10 says it may be acceptable if the fees are taken "on another reasonable basis that complies with...Title I of ERISA." Do you think this would be a reasonable basis? Would it impose a "significant detriment" on a participant? We were planning on cashing out the accounts under $1,000. Only for the account over $1,000 were we planning on taking this fee. Also, there are three accounts whose owners we cannot locate, and have gone through the lost participant procedure; due diligence was done. One account is around $80, another $700 and a third around $4,500. Should we (or the ER) take the time and expense to open IRA's for these people?

If a participant must take an RMD, do we need the participant's authorization to process it? Or is just the Trustees' say-so okay? Does it matter if the amount is more or less than the plan's involuntary cash-out threshold?

Does the plan allow for terminated participants to make loan repayments? Most of my documents say that the loan is due and payable on termination.

And to add to Tom's post: A SH contribution can be given on compensation only while eligible for the plan, whereas a Top Heavy contribution must be made on full-year comp. You you can have instances where the SH would not be enough to satisfy the TH allocation.

I have someone (non-owner) who needs to take an RMD for 2010. She is 74 and separated from service in September 2010. Her RMD is slated to be about $600. However, earlier in the year, she took a hardship distribution for $1,000. Does she still need to take the RMD? I would tend to think not because the hardship: 1. was paid to her (not rolled over) 2. wasn't eligible for rollover 3. taxes were withheld 4. it was for more than the RMD 5. tax form will still be code '7' Your thoughts are appreciated.

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)