BG5150

I meant "Imchipbrown" (oops)

So, it's allowed, the OP just has to check the plan's document to see if it applies.

Does the document allow that the match counts towards TH? (Didn't EGTRRA or PPA allow that the match can count, but doesn't have to?)

I would say not in test because there was no compensation whatsoever. In my example the person had compensation, it just wasn't eligible for deferrals. BTW: At the ASPPA conference last year, the question was addressed and the answer was to include my guy with zero salary. (I know it's not an official answer, but more than we had int he past.) To the OP: is this a sole-prop, partnership or corp? If not a corp, I don't see how W2 could be paid. ANd are we talking about '08 or '09?

The Form 5500 instructions have a portion that lists what forms a small pension plan may be required to file. Schedule D is on this list. Here is a link to the instructions. See pg 9. http://www.irs.gov/pub/irs-pdf/i5500.pdf Laura On a side note (I know the OP said the plan has more than 25 participants): If a plan has less than 25 participants at the beginning of the year, it optionally file only certain forms, and schedule D is one of the forms which DOESN'T have to be filed. There are more conditions as to whether a plan can use the "Voluntary Reporting Option." You can read about it on p. 9 of the 2008 instructions so thoughtfully linked above. But in this case, I think you are out of luck: a schedule D is needed.

Bottom line: If the person is still working for the company, but is now in an excluded class, loan payments still have to continue. If the person has been terminated, see the plan document or loan program and/or loan documentation to see how it should be taken care of. On another note: be careful when you are deciding who is eligible or not to make deferrals (or to get a match or PS). The plan may be set up so "temp" (or part-time, if that is the meaning here) people never become eligible, but if someone satisfies the eligibility requirements, that person remains a participant even though he or she may now be scheduled to work less than hours needed for initial eligibility. That is, unless that person's job classification is specifically excluded from participating. For example, eligibility reqs are 1000 hrs in 12 mos. Suzie works 1200 hours in 2006, '07 and '08. In '09, she is now only working 850 a year. Jsut beacuse her hours got cut, doesn't mean she isn't in the plan any more (though it may mean she doesn't accrue vesting service). Unless Suzie's job classification is expressly excluded from the plan, she stays in.

Where can I find the ERISA code online? All I seem to find are bits and pieces of it. Is it all in one place anywhere?

He is still a participant in the plan; he just does not qualify for the contribution. As you said, there has been no distributable event, so I would say "no" to the distribution question.

Because a lot of times, the bosses will use their accounts as a sort of line of credit, but they don't want to have the hassle of doing it for the rank and file. So they keep the loan provision and try to keep it hush-hush. As to prime+3: Here is what the ERISA Outline Book has to say about interest rates and the PT exemption:

But you need a compelling reason to use the service. You just can't use it to track down a dead-beat ex-wife or a long-lost pal from first grade. (Of course, locating someone for benefits purposes is a compelling reason)

I've had some success with Accurint. Not sure how much they charge, because I was with a large company at the time, so I'm sure we got a volume discount.

Have you asked the document provider/author what it thinks about the issue? Many times when I am not sure if something can be accomplished in a plan, I go back to the provider/author. Perhaps teh same question was posed to them and they already have an answer.

With a New Comparability formula (if it is allowed under your document) you could accomplish this. And even better, the sponsor can determine which of the HCEs can get an allocation (For example, the owner and his wife, but none of the other HCE's).

Yay! I may have to go to jail, but at least I'll probably avoid heavy fines.

K2: If and when the employer makes the plan "whole," how does it do that? Does the money go back into the participant's account? Sitting there accruing tax-free gains (or lossed), and then he or she will be entitled to that money again in the future?

That quote is saying to me that you can't adjust someone downwards to pass the test based on the allcoation formula in affect at the time you do the amendment. Basically, you calculate the allocation. Run the test. And do additional contributions as needed to pass the test (as opposed to reducing the allcoation of HCEs), and you validate those contributions with the -11g amendment. This way, there is no possiblity of reducing any employee's benefits.

$395 / $2,885 is 13.69%. The match is only made on the first 4% of that. So, even though the matches are made every week, it doesn't mean the match is being made on catch-up. rcline: how about this: plan limits HCE's to 2% deferrals (holdover from when the plan always failed the adp test). She makes $100,000, and so defers the $2,000 (2% of pay) plus another $5,000, total $7,000 in deferrals. Her SH match would be $4,000, wouldn't it? Two thousand of which would be attributable to the catch-up.

It wouldn't be anty different than if someone was in a group that was to receive zero, but the 11(g) amendment gives Sally Skedaddle a $150 contribution to pass the test; the $150 is not prorated across the group.

Profit Sharing of $46,000 and a deferral of $5,000? The deferral would be considered catch-up. [for 2008]

The penalty is $30/form that was filed late (after March 30 and before Aug 1). You may be able to get a waiver of the fine. (see p. 13 of the General Instructions for 1099: http://www.irs.gov/pub/irs-pdf/i1099gi.pdf) [thanx to David Rigby for pointing me there a coupla months ago...] However, I'd figure out a response to the person if and when he or she comes back and asks for reimbursement of the cost to amend personal income taxes.

Is an automatic enrollment feature availble to the plan?

Does the plan have any other employer contributions other than the SH? Like an additional profit sharing or match or reallocated forfeitures? If not, you should be okay with just the SH contribution--since you get the "free pass" in that situation. If not, I think all you have to do is give participants employed on the last day of the year, but who entered the plan mid-year, an additional contribution to get them "trued-up" to their full year compensation. Yuu don't have to mess with the integrated profit sharing allocation at all.

Is it too late to do SH for 2009 if the deferral feature has been implemented, I think. When will the bookkeeper be eligible? In 2009? Does the plan allow for a QNEC? If so, the ER could make a QNEC enough to satisfy the ADP test. And as for the 2% "limit" mentioned: it is the LESSER of NHCE average PLUS 2% or TIMES 2%. Therefore, it would be zero (0.00 X 2% is always less than x% + 2%) ASIDE: Someone once put up a rhyme of when you use the 2+, 2x and 1.25x. It turns out you use the 2x when the NHCE % is under 2, you use 2+ when it's between 2 and 8 and 1.25x when it's over 8. )Can anyone find a link to the rhyme? I can find it using search)

I was always under the assumption (me=ass, perhaps!), that gap earnings can be done with acutal gains/losses, and the other way was also acceptable, kind of like a safe harbor (for lack of a better term). I would thinkt he latter helps with balance forward plans, since earnings are only done a few times a year.

How long ago was the first distribution? My former company would require a new distribution request if the first one is over 90 days old or it crosses tax years. I think neither you nor the Employer can say for certain where the participant wants his or her money. The person may be in a different financial situation than when the distribution was first done. Maybe the IRA was moved to another vendor. Maybe a car payment or tuition bill is due and this money would be very timely. There are many circumstances where the (former) participant would like the money to go to a place other than the original IRA. In any case, it's probably up to the firm where the assets are. It probably has its own procedures for handling these cases. Maybe ask for processing fees to be waived in this case.