12AX7

Agree with Bill. Also the IRS letter should make mention of using DFVC.

Mr. Powers, we have a similar provision in our Plan and I posed the same question to the author of the document because if narrowly interpreted, it appears that expenses must be paid before any other use of the forfeiture account. I didn't check, but perhaps the language came from the LRMs. The reply I received was that expenses could first be paid from forfeiture, but it was up to the Plan Sponsor. The provision was not intended to remove discretion to either pay expenses directly from the plan or by the Plan Sponsor. I would check with Corbel to determine if they have the same interpretation.

Are not the earnings taxed in the year distributed? That was my understanding.

Also, you lose the TH exemption of the SH, but that would likely be of limited consequence in a SHNEC.

This is where you need Tom. I seem to recall that this question came up in a IRS Q & A during an ASPPA conference. I believe the answer was that the plan could be amended before the allocation requirement had passed. At least that is what I would do.

I've not heard of anything like this lately, but am curious as to what was the third plan that transferred the assets to the MP? Couldn't the remaining assets be transferred in-kind?

Within my experience, It appears to be a safe situation if the Plan Sponsor makes the request on behalf of the participant. How could I further safeguard against a fraudulent request under these circumstances? Furthermore, how would one protect an address change that is fraudently made directly with a platform vendor? Changes often occur without my knowledge. I had never given too much thought to the process, but then again I'm not aware of an incident that Mr. Powers has speculated on.

Ok, I see what you are saying. Usually, my request for an address change would come from the Plan Sponsor on behalf of the participant. I never had a participant or someone claiming they were a participant asking me directly to make an address change. Usually, I would get an email from the client asking how Joe Participant can chang his address. I never thought about an imposter calling a TPA to make an address change. That would be very clever planning !

With most of my plans on platforms, I would not collect addresses and have the participants make changes directly with the vendor. However, in your sitatuation the approach is very practical but you seem to have some underlying concern where the address is not verified.

Nothing. If assets are on a platform, we use their forms. Otherwise, I don't get too concerned about it. Should I be concerned?

Assuming that it's a calendar year plan and your determination date is 12/31/2011, then the group acquired 9/12 were not employees and therefore not used in the determination of HCE for 2012 since the plans were not merged. For 2013, it would appear they would be considered for determination.

You may have TH issues if there were different eligiblity requirements for the Salary Deferral and SH allocations portions of the plan (e.g. immediate eligibility for deferral and 1 YOS for the SH). This is perhaps getting a little off topic, but thought to mention it since John brought up the TH exemption example.

It seems this was all discussed last year in this same thread.

It appears you again have the potential issue of failing to follow the terms of the plan document. Perhaps the plan needs to be amended to get closer to desired results of the client. I'm not seeing how this is an 11(g) issue where there is a failure to follow the terms of the plan. The plan should be amended in 2013 before participants have more than 501 hours, assuming safe harbor allocation conditions.

I agree with the IRS' assessment of the situation. This is an example of what I was referring to and therefore questioned the hours requirement. I've seen some plans with 1 hour elected in this provision, but then I think it would not be an elapsed-time method of crediting service during the ECP. <000o><\000o> consecutive months (not more than 12) during which the Employee completes at least <00dU><\00dU> Hours of Service (cannot exceed 1,000). If an Employee does not satisfy this requirement in the first designated period of months following his/her Employment Commencement Date, such Employee will be deemed to satisfy this condition upon completing a Year of Service

Kathy, I understand your situation completely and the difference between the two eligibility determinations. I was questioning if pmacuff had an hours of service condition for the 6 consecutive months of service requriement. That's typically what that provision is reserved for.

JH forms do allow for the return of excess aggregate contributions, if that is what you are asking.

Isn't the 6 consecutive months option usually tied in to a specified number of hours worked during that ECP? edit for clarification: In other words, is there a difference between 6 months and 6 consecutive months if perhaps 1 hour of service is required when using the 6 consecutuve months option.

If there's no other opportunity to zero out the refund, I would bite the bullet and process the excess. What if the amount were $1.01? The point is for small amounts, it always costs more to process than the amount that gets distributed.

I'm not aware of a de minimum rule. Is there a match in the plan that you can "shift" to pass ADP? Edit: have you also considered possible investment loss to zero out the excess contribution?

The plan document determines which HCEs may be subject to the top 20% election for the year. This determination is for all plan purposes that year.

What about BRFs? Where applicable, wouldn't there be some concerns?

The OP appears to be getting the 36% by testing Company G separately. The plans need to be aggregated to pass coverage.

I don't believe the intention of that section of EPCRS is to create timeframe ratios. I'll stick with the 9 months and leave it to you to submit comment to IRS for the next go around on EPCRS. Thanks and talk to you later.

So the failure needs to occur more or less by March 31 and the participant is notified of the failure to decide about making up the difference in the last 9 months. In the real world it doesn't always work so cleanly, because the employer doesn't know that the failure has occurred and I don't catch these errors until after the plan year ends. Thanks.