BG5150

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?

I have TWO follow-up questions here: 1. In a case wherein the participant takes a distribution payable to herself, how do we treat the tax withholding amount being returned? It's my understanding that she would have to make up the amount withheld from her own funds. But, would that create basis in the account? Assuming this has occurred after she's filed her taxes for the year of distribution. Would we have to separately account for that money as "after-tax" but still on the vesting schedule? 2. What if the person was 0% vested in the source--Profit Sharing in this case. Does she have the right to have the amount reinstated? Or, because she had no non-forfeitable money, she's not entitled to it? I have someone who has two years of service on a 3-yr cliff schedule. Would it matter if she had any deferrals, since they are 100% vested at all times?

I would say that the "old" money was "stuck" at 80% vested, it would cease to accrue the last 20%. The "New" money, would be immediately 80% vested, and when the participant gets 1000 hrs in a plan year, he/she is 100% vested then. The participant would start again at zero. As for re-satisfying the eligibility, what does the document say?

Ok. So, I'm married in 2009. File our forms as "Married filing [single/jointly] in January. Get divorced on March 2010. Get hired May 2010. Am I married? Sure. here's my 2009 tax return and marriage license.

So is ti jut the targeted QNECs that aren't allowed after the 12 months?

Austin, from what I am reading, Appendix A says you can do the QNEC to all participants int he amount to satisfy the test. Appendix B allows for an alternate correction, which is the 1-to-1 QNEC paired with the distributions.