Kimberly S

Well, the plan is no longer a Safe Harbor. It was a Safe Harbor through 12/31/06 and became not a Safe Harbor on 1/01/07. But if they were using current year testing (or deemed to be) through 2006 are they eligible to switch to prior year in 2007? How many years were they current year? Does the amendment taking them out of safe harbor specify they are changing to prior year?

If you've already determined that it is an ASG, what difference does it make if it is also a CG? Either way it must be tested as one employer.

The plan's requirements for the timing of distributions is spelled out in the documents that establish the plan. Each participant should receive a Summary Plan Description that would explain when they are supposed to receive their funds. Some plans pay immediately, others don't pay until after the participant has been gone from the company for a year and there are many options in between those two extremes.

Keep in mind that there is rarely anything in a cross tested formula that would prohibit a comp to comp allocation.

The accountant is certainly full of something! Healthcare businesses are presumed service organizations for ASG purposes, according to Derrin Watson's book "Who's the Employer." Since the ASG criteria are more concerned with business relationships than ownership, the accountant is most likely wrong.

It is possible for the document to use a definition of comp. that includes bonuses and the participants still elect not to defer from bonuses by changing their deferral election. It would depend on the frequency of changes that are permitted in the document.

With a safe harbor match you have to give employees 30 days notice that the safe harbor provision is being terminated and the safe harbor contribution must continue through the end of the 30 day notice period. I'm not sure if that also applies to the safe harbor non elective contribution, since it would not impact deferral decisions.

Thanks!

Back in 2004 there was much discussion of the fact that the IRS was inactivating trust EINs that had not been used in a few years. Supposedly they agreed to stop doing that after much protest from plans that didn't happen to have distributions every year. I remember seeing discussions of the issue here, but wasn't able to find any just now. We are running into the issue again, with EINs that were issued as recently as 2006. Does anyone have up to date information about where and to whose attention the request to reactive the number is supposed to be sent?

She's right that you work for the employer, but that doesn't change the facts. Has anyone recommended a therapist to help her with paranoia?

It might be prudent to have the plan sponsor's attorney assist with the determination of whether the DRO is a QDRO.

It is my understanding that if a discretionary contribution is not deposited by the due date it cannot be allocated for that year.

You haven't provided enough information. The answer will be vastly different if the contribution is for a DB plan, a MPP, a safe harbor contribution or a discretionary PS.

How does the plan define compensation? If it uses full year compensation for contribution calculation purposes the answer may be different than if it uses compensation while a participant.

A very timely observation given the market activity thus far in 2008.

If she is not the beneficiary of the account, what right does she have to even request the forms? The executor of the estate should be the person requesting the information.

If earnings are only allocated on the last day of the year, and there is no balance on that day, they get no earnings is the way I've always understood it.

Putting the person in their own group allows you to increase just the one rather than all three NHCEs. But I agree that you probably can't do it after the fact. And it sounds like you're going to have a hard time justifying a business reason for it.

That might be true. It depends on whether or not the document eliminates the non-owner's right to receive an RMD while still employed.

The RMD is not eligible to be rolled over.

ASPPA's Retirement Plan Fundamentals course is also an excellent learning tool. John, are you trying to scare him to death by referring him to Larry? (yes. I've attended)

Approximately $1,000 per month was supposed to come from this person's paychecks and he or she didn't notice that it was not withheld? I think there is some contibutory negligence here, although I'm not sure that ERISA recognizes that concept.

What does the resolution say about timing?

A participant is only entitled to a gateway minimum contribution if he or she receives some other employer contribution.

And if you go to the site, immediately below what Masteff has quoted they give an example using 5 days as the standard for depositing deferrals. The match deadline is not usually as strict, but will depend on the terms of the document. It might be as late as the due date of the employer's tax return.