BG5150

12 months prior to last day of plan year. (I believe)

I have a calendar year plan that has an effective date of 3/1/2006. What limits do I pro-rate for the year if any?

That's the way I was brought up.

I'm no mind reader either, but I'm guessing it is something like: 1) pro-rata up to 3% of comp 2) pro-rata on comp above integration level up to 3% of that comp 3) pro-rata on comp above integration level up to max disparity as defined in docs 4) pro-rata to everyone until desired funding level is achieved

I would think you (as a record keeper) would need SSN's so proper tax forms could be produced if necessary.

Wait a minute? These people want to be paid more to now have a plan and not defer? That is just plain silly. I could understand if the people WITH the plan would want to be paid more (to offset some of the deferrals). or would they rather get more in a paycheck than have a match or PS? I say screw it. Make everyone eligible. And if the ER wants to pay these other people more, so be it.

5558's still need to be signed if applying for extension to file form 5330.

How did the plan treat the deferrlas received in January of '06 (if any)? It should be done in the same manner.

It would as long as full-year compensation is used for the calculation. Many plans use participation compensation (money they've made only for the portion of the year they were actual participants) to determine the ER's allocation.

I'm guessing, too, that the match will be 100% vested.

Maybe someone confused 415 and 402(g). And what does the plan docs say the limitation year is?

Not even my BOOKIE is that mean!

I'm pretty sure the leeway is more than a couple of days.

Just curious, but where in the regs does it say to include the excess for the HCE but not the NHCE?

It's a good idea also to prevent a "you never told me I could defer" situation.

Wasn't sure where to put this question, so I put it here, since it relates to a Shedule I entry. In part IV of 5330 where I report the late deferrals, which "transaction date" should I use? The date the deferrals were due to the plan? The date the deferrals were actually remitted? The date the deferrals were actually invested? Page 6 of the instrux aren't particularly revealing. Your thoughts are appreciated.

As I see this question: you must give the profit sharing contribution to everyone who has satisfied the profit sharing eligiblity requirements and heve entered the plan. Making, or not making, salary deferral contributions has nothing to do with it.

Don't forget: the dollar threshold for HCE's is for income in the PREVIOUS plan year, whereas the 5% (really more than 5%) threshold is for the PREVIOUS or CURRENT year.

Equivalency method doesn't count actual hours, so no need to divide comp by hourly wage. It grants certain number of hours for a given number of days of service. For example, with the equivalency method, an EE would receive these amounts of hours for these amounts of service: 10 hours for each day they are credited with at least one hour of service (basically for each day they work) 45 hours for each week 190 hours for each month Could you do it that way?

What does the plan document say the allocation should be?

As long as you pass coverage, you can pretty much exclude any group you want. You'd have to come up with some sort of common denominator of those EE's you want to exclude and hope no one in that group defers and would, thus, no longer be eligible to contribute to the plan. I think the "once you're in, you're in" theory comes from plan provisions that say all service with the ER is counted. So if someone who was eligible before she terminated, when she is rehired, she has no eligibility requirements to satisfy to start re-participation (except that of being in an eligible class).

Would there be an operational failure because people (in the end) were deferring more than the agreements they signed were for? For example, say I signed an agreement for 5% of my comp to be deferred. However, after this add'l contribution, it turns out to be 5.2?

Why not do it as a profit sharing? This way it won't be immediately 100% vested (maybe).

Nope. They are not participants until they have satisfied age and service requirements and reached the appropriate plan entry date.

We have a plan in which only the HCE's deferred, even though NHCE's were eligible. Therefore, all of the HCE (and, thus, key EE's) contribs will be returned. The plan is also top heavy. My question is: When is the rate of the key EE's determined? Before the refunds are taken? Or after? if it's after, I'm guessing no TH contrib is necessary, since the key EE allocation will be zero. (I know this is just the tip of the problem; we're tackling this first.)