BG5150

For # 2: Check the plan document. Many times, if a person does not have "X" breaks in service and was elgiible when he left, the person is re-eligible upon rehire.

I'd like to add, though, that if you are doing refunds more than 1 yr after the plan year end, a QNEC (whether it is just a QNEC or a 1-to-1) is given as if the plan was not split into component parts. (EPCRS)

3/3/09? SQRT of 3309 is 57.5239 Or do you mean that 3 * 3 = 09?

What digits of 3/3/2009 make it a square root day?

The IRS addresses multiemployer 401(k) plans in some of their plan examination guidelines, as has the DOL in some media releases. There are also a number of other resources such as this book. The link for the book returns an error. It goes to the site, but the page can't be found.

Check the section in the document that addresses the 401(k) and 401(m) tests. It may call for testing using any comensation allowable under 414(s). For example, one of the documents we use specifically says that the ADP is the ratio of contributions to 414(s) compensation. It makes no mention as to what the "defininition" of compensatoin is in the adoption agreement.

Why would coverage be an issue? The person was no longer an employee when the deferrals (and, hence the Safe Harbor) feature kicked in.

Does your company have a legal department? Bringing up potential legal matters to management sometimes gets them moving. You may want to point out that not only was this a prohibited transaction, but one involving an HCE and a fiduciary, which the DOL and/or IRS would consider way more egregious if it were an NHCE (I would think).

Generally, a distribution done on Monday, will get a check date of Tuesday (assuming the trade(s) have settled). In the case of a distribution processed on 12/31, the check date will be the next business day (1/2 or 1/3), thus in the next year. I've never came across someone who does checks the same day as a distribution.

Maybe send them a list of the bad things that can happen (to the Employer AND Employees) when the plan gets disqualified.

I used to work for a big company, and we accepted fax copies of distribution. The distribution area would check the administrator's signature to the one(s) we had on file. The only time we asked for orignials were when the fax had a raised seal for notarized forms (like spousal consent). (If there was a stamp, it was ok). What is the point of getting an original? Whomever faxed you the paperwork could just as easily mailed it. It's more of a time-saver than anything else.

I got used to RPN in college on my HP 28-S (I think that was the #). Now I use the 12c at my job. I have trouble using a "regular" calculator any more...

FWIW, this year it's either March 13 or March 16 depending on how conservative or agressive you are with your procedures when the 15th falls on the weekend...

What I meant was: is giving the owner a 49,000 allocation going to affect the allocation to the other ee's? (I poorly worded my question) How much would the allocation increase to others with 49k instead of 32.5k? Is this person an owner? If so, why not put in the max deferral and then maximize the p/s contribution?

Kev, I see what you mean, now. I thought you meant an allcoation of $5, 10, 50 for each of the two people in question.

The plan states that if a participant's account balance at separation from service is less than $1,000, "the Plan Administrator MAY direct the Trustee to make an immediate lump sum distribution..." [emphasis mine] It take the "may" as this being optional. The plan administrator has yet to use this provision, but there are several old balances and a few newer ones (due to a missed deposit some years ago), and he would like to zero these accounts out. My questions are: did the administrator do anything wrong by waiting? And, how quickly do these types of accounts have to be liquidated in the future? Can he just periodically sweep them out? Some of the accounts won't even get a check because of the distribution fee being higher than the account.

On a side note, would a $49,000 allocation blow up your Avg Bene Test on the cross-test?

Why not just use a penny then? Any allocation greater than zero would mean a person is benefitting. Secondly, might the Employer only have to give a contribution to one of the people? Earlier it was noted the population was: 3 HCE / 3 HCE benefitting, 6 NHCE / 4 NHCE benefitting. So just one more NHCE is needed to pass coverage: (5/6) / (3/3) = 83.33%. I thought the "standard" way to correct the coverage test was to bring people into the allocation from latest term date to earliest until the test passes. (And I thought I've seen to use lowest compensation to highest comp.)

Aren't ALL withdrawals (distributions) added back into account balances for the lookback year for keys and non-keys alike? So it wouldn't matter is the person was a key or not. The difference is that key ee's have in-service withdrawals in the four years prior to the lookback year added back in, too. So the main question here is whether or not the ADP refund is used in the next 4 TH tests (assuming this person remains a key employee.

Most places require you give at least the first month's rent in advance before you can move in; some even require a month and a half, and some ask for first and last months rents.

Just out of curiosity, what did the person want to be invested in that did so much better than the default fund given the market conditions over the past year. (Hopefully it wasn't one of Madoff's funds!) Usually, the default fund is something safe, that preserves principal as best that it can. If the default fund lost a lot of money, you may want to revisit what the default fund is.

Do you mean match?

What does the document say about compensation? There are may companies that withhold (or don't withhold) correctly from bonuses or OT. Just because a payroll company doesn't wihhold 401(k) from bonuses doesn't make it right.

Is there a penalty for sending out a 1099-R after the Feb 2 deadline mentioned in the instructions? If so, what is it? The instructions say: ...but that's it.

From the instructions: It goes on to talk about using private carriers and how the postmark is usually recorded by them. There is no physical address listed in the instructions. (Same thing for the filing instructions for 5330)