BG5150

But if you do that, you have to do it with everyone. You just can't say "Well, Jimmy really needs the money, so we'll take his fee from the forfeiture account, but I know Helen's husband makes a lot of money, so we'll just take her fee from her account." There should be an administrative procedure in place saying whether or not a fee will come from the participant or the plan.

1. Find out if any other employers did, in fact, adopt the plan, and see if they still want to be part of it. 2. Make sure testing was done correctly.

I had a client that had a "random" audit. They got a letter saying an agent would be contacting them to set up the audit and please have this, this and this ready. He gave the letter to me, we put together the required information, and sailed through the audit. [in fact, props to us and my clients records retention, the agent said it was probably the most complete set of information he ever got without have to re-ask for stuff!]

Who wrote the checks? For the distributions and the taxes. To see the gross amount distributed, I guess you could use the brokerage statements. For the withholding, you will have to rely on whomever did the tax withholding/payment to IRS to give you that information. (Hopefully, you have, or can get, copies of the distribution paperwork to see if the money was supposed to be rolled over or directly paid, so you can match up the withholding amounts and to determine the 1099 codes.)

The WRERA rules are in effect for 2010, but I think they are "optional" for 2009. Doesn't the plan have to adopt an amendment to allow for the rollover of non-spouse money for '09?

Where are the assets for the plan held? Are they with a big company like ING or Prudential? The custodian have have a handy report for you. If they are in individual brokerage accounts, you'll have to do some detective work.

Don't forget to file the 5330 and pay the penalty taxes.

Great. Thanks a lot! Now I have the "Old MacDonald" song going through my head! (quick, someone start singing the Macarena)

My guess is, since the 1099 has not been issued yet, you could just make sure it gets the proper code. Was the initial withdrawal enough to satisfy the excess? If yes, you'd probably have to do two 1099's: one for the 415 excess and one for the remainder as a normal withdrawal. If not, you need to distribute the remainder and do one 1099.

Look into EFTPS on the IRS site. Depending on how much withholding the employer has done overall, it may HAVE to use it. See also forms 945 and 8109-B.

I thought it was you cannot match deferrals that were more than 6% of comp, and the total match couldn't be more than 4% of comp. So, you could go as high as 66.67% of deferrals up to 6% of comp and still be okay.

Make sure you check craigslist and eBay to see if they are trying to sell your stolen stuff

Ah, the joys of being an ERISA practitioner! We regular ol' administrators get those calls, too!

Does the document say specifically what compensation to use, or does it say any compensation that will pass 414(s)? (Or does it matter? I always thought it should say in the doc which comp to use for testing)

Another thought is "fees." Some companies charge monthly or quarterly or yearly fees for open accounts. Is it possible your account got completely depleted because of fees?

[interruption] I think it's a bit ironic that a business dedicated to the prevention to the cruelty to animals is also operating a hamburger joint. [/interruption]

Why would that be important if the document doesn't have gateway language?

Sorry that I didn not make myself clearer. I assumed this plan had a "Safe Harbor" feature to begin with. I know an employer can't just do a 3% QNEC after the fact and say the plan passes the ADP test because the contribution was "safe harbor." (I did put "(100% vesting, notice timing, etc)" in there; I guess it wasn't evident what I meant.) My point was to show that a 3% NEC that satisfied the safe harbor conditions might not in and of itself correct an ADP test (much the way a QNEC might).

Do you have to do an 11g amendment in order to provide a gateway to someone who would not have got it? I thought 11g amendments were used when you were upping someone in order to satisfy the ABT.

I believe you can, but if you fail, you must make a 1-to-1 QNEC for the amount of the refunds. EPCRS says you cannot break the plan into component parts, so you must test everyone together, and, then base the QNEC off those results.

It depends on the service agreement you have between you and the two TPA's as to who will fill out the Form 5500 (the Employer files it). I have filled out 5500's for plans that have been with us for 10, 11 months out of the year (for a higher fee, of course) and then moved to a new TPA/record keeper. Though most of the time, the new TPA/record keeper will complete the 5500 based on information it has and that provided by the prior custodian.

We sometimes use the Corbel Volume Submitter. The hardship section is one unto itself in the "Determination and Distribution of Benefits" chapter. It states that a "Participant" may take a hardship. However, "Participant" is defined as someone who (paraphrasing) is participating in the plan and has not become ineligible to participate any more. I take that as "no terminated people are 'participants'." In this case, I would say no hardship is allowed. Do you have access to the people who wrote your document? Can you ask them?

Do mine!

Here is an example: 2 HCE's each put in 10% of pay 5 NHCE's each put in 2% of pay HCE ADP = 10%, NHCE ADP = 2%; test fails. Employer makes a 3% NEC to only NHCE's. HCE ADP = 10%; NHCE ADP = 5%; test still fails. However, if the NEC satisfied the Safe Harbor requirements (100% vesting, notice timing, etc), then the plan is deemed to have passed the ADP test, even without looking at the numbers.

Matching on deferrals that would have happened could lead to a higher rate of match for HCE's I would think (how many NHCE's are putting away 16,500 early in the year?). My suggestion is to get the HCE's to take 16,500 (or whatever it will be next year), divide by the number of pay periods and make that their deferral each period. This way they get match every paycheck.