HarleyBabe

Tom you are correct. I just rephrased my scenario for dates. That's what I thought as well. Does anyone disagree and why? and think they should come in during the 2015 year as soon as they hit that 1000 hour mark. If so please give me a reg or something to go off.

you know what, my example was wrong, duh, that's a technical term, sorry. Let me rephrase it. Same scenario, May 2014 to May 2015 doesn't work 1000 hours and we have that a lot because of all the interns theyhire BUT January 1, 2015 to July 1, 2015 he does work 1000 hours. Does he come in August 1 or does he have to wait until January 1, 2016. That makes more sense. Sorry folks.

Yes please I need all I can get and somewhere of proof of why as well would be awesome.

yes they did work 1000 from January through May 2015 which is why the client is saying June 1, not the following January 1 after the plan year is over. My thought is the measurement period is 12 months.

Have a plan that has eligibility measured from anniversary and then switches to plan year. It's the basic document language that I'm sure most doc modules read but I attached it. So here is a scenario and I'm not sure the answer. Eligibility is 1 year of service with 1000 hours and age 21. Entry is monthly, calendar year plan. Scenario - Hire date May 2, 2014 so anniversary date is May 2, 2015 but they didn't work 1000 hours in that first period for whatever reason. In my client case they employee a lot of interns that then turn full time. So based on my scenario, we switch to the plan year because they didn't meet the 1000 hours in the anniversary period. Plan year is January 1, 2015 to December 31, 2015. Well the client is arguing they should come in June 1, 2015 because between January 1 and May 2 2015 they became full time and worked 1000 hours so why do they have to wait for another full year. My thought is no we measure January 1 to December 1 and yes they worked 1000 hours and they come in January 1, 2016. It does seem to be a gray area in my mind. Thoughts and help please?

Yes, I'm not sure how this will work. I don't think it can but I'm curious how bundled plans handle this. Unless they just do it wrong. Can you think of other concerns. I'm trying to come up with all the potential issues.

Have a plan that is auto everything crazy. I guess not such a bad thing in some ways. First I think they would go bundled if it weren't a complex plan but they want the financial institution to track hours and reach out to the newly eligible to invite them to enroll so they don't have to worry about enrollment. I wouldn't be so concerned if there weren't a 1000 hour requirement on the plan. The requirements are age 21, 1 year of service where 1000 hours is worked and then monthly entry. We have a meeting this week with the financial institution, myself, the client and a few others to implement this and address concerns. My concerns are bottom line, it being done wrong and me not finding out until year end. I am looking for thoughts and concerns and others experience with this. I'm sure I'm not thinking of everything. I just see a lot of room for auto error. I It has been explained to me that the institution will receive a payroll feed every week and hours and when it hits the requirements, that a notice will go to the participant to enroll. I'm just leary, maybe needlessly. Can someone offer me their experience and maybe topics I should discuss in regards to this.

Thanks All - I take this one step further into the mechanics now. So, we say, OK to the same account. However, we have 2 plan names, 2 plan requirements.... We need 2 sets of enrollment paperwork obviously because it's a different plan correct? Therefore, can't just use the other plans paperwork for enrollment. Also, they will need to somehow show the other plan name so that when the participant logs in they see the plan name they are a participant within, correct? And, to the actual transfer, currently these folks are in the current plan. Once I have the new plan established, how is the transfer handled? I may not be terming this correctly but if we are moving money out of one area into another, it's not a distribution so how mechanically and for reporting purposes is this handled. Thank You.

Thank you all so much. I guess it just seems not okay although I don't know what I base that on. We are no where near the audit requirement so I suppose as long as I record keep them separately I'll give the all clear. What about plan names, I mean we'll have two separate plan names. Should I have the investment institution somehow be able to notate that. Suggestions on that piece?

That's not the point. The issue is that making a profit sharing contribution to the union folks takes the current plan out from the umbrella as not subject to top heavy at all because it was a safe harbor only plan. It can no longer be a safe harbor only plan and therefore not subject to top heavy if the union people have to receive a profit sharing because of their agreement.

Now I am really confused. My head is spinning. Let me throw in the asset platform is Transamerica. I guess my issue is 2 separate plans that would have 2 separate Trust IDs so how can we have 1 contract at Trans. The advisor is suggesting that we separate these with division codes, ie union vs non-union but under the same Trans contract and that it will be fine as long as they are record kept separately. I would agree with that if we were using 1 plan and just separating the union vs nonunion. We are creating 2 plans to begin with in order to avoid top heavy requirements because the required profit sharing contribution to the union members based on the union contract takes us out from the umbrella of a "safe harbor only plan". It was suggested at ASPPA to just make 2 plans, problem solved. The advisor is simply trying to provide the client the advantage of good pricing by not having an entirely separate investment contract that starts with no assets. Does any of this help?

Thank you for the quick reply. I think it would be okay too but I just want someone else to agree.

We are setting up 2 separate plans for a particular 401(k) because to leave as one, the required contribution for the union employees, will now make their former safe harbor match only plan subject to Top Heavy requirements. Council and I decided best to separate. Question comes up from the advisor and this is where I need some guidance. Currently the funds are on one of the mutual fund platforms. The advisor wants to set up a separate division under the same contract in order to for cost to participants to remain down rather than a completely separate contract. Obviously, I'm not a financial advisor but my question is, is that okay? Can the funds of two separate plans be under the same contract at the financial institution but set up as a separate division basically. What questions do I need to ask to make sure my asset accounts are in compliance with 2 separate plans.

I asked this question at the ASPPA conference as well. Not much guidance either. My issue is that I hate to place these folks in a separate plan, separate document, separate tax forms....

Currently have a Safe Harbor only plan which prevents us from being Top Heavy because no funds other than the Safe Harbor were being made. Now hire 6 union folks and the collective bargaining agreement requires a small percentage of pay contribution each year. Question, does this now mean we have additional employer money in the plan and now have to make top heavy minimums to non-key folks or does the fact that we are only providing the small employer contribution to the union folks separate us from the top heavy issue?

You see, that extra percentage goes out to the union plan. Does that even go in our plan document?

Let me clarify - Union agreement requires the employer (my client) to provide a safe harbor plan, so no issue there, and we will provide to all employees, but the only extra piece is a .50% of pay contribution based on each union employees pay to the local union plan for the union folks. Those are the requirements of collective bargain agreement. That's what I don't know what to do with? And there are testing questions I have.

Yes, FT Williams Volume Submitter. Was setting up the safe harbor for all, that's easy enough but that extra percent that goes to the Union plan for the union folks, yes, how do you write that a contribution will be made and go to another plan, and what do you provide the non-union folks or do you have to provide anything.... a profit sharing in the additional amount, cross-tested with each participant being a group?

thanks all. Employer wants to provide everyone the same, the issue is this percentage the employer has to provide to the union plan for each of the folks. How do I write that in a document or is it as easy as writing that in the document for those union members.

Took over a plan that now includes union employees as of 1/1/15. I have little experience with this as only several of the employees will be subject to a collective bargaining agreement. How exactly do I handle these folks and do I need two plan documents as it appears I do from what I am reading. The agreement states these folks must have a safe harbor plan basically and that the company will also contribute an amount of their pay to the union plan. I am a bit lost. Can someone offer me direction as far as documents and admin. Thank you.

thank you.

Can't believe I'm dealing with Plan Design right now the week before the 15th BUT can someone please help me. I have a new 403(b) for 2015 and the advisor has said let's use auto enrollment. Well, I asked which kind. They said not the one that auto increases. To be honest, in 24 years, I've never had one of these type plans. Can someone please tell me the differences and why one vs the other. I do know that the original auto enrollment or negative election is simply a percentage goes in unless they say otherwise. However, you cannot withdraw after the fact correct? Also, what is the postives of this vs ACA - vs EACA - vs QACA - I know this comes with a safe harbor requirement, can be withdrawn, has a vesting schedule. Thank You,

Have a situation where the 2 Trustees retired. There is not a Board Meeting until April and the new Trustee to be doesn't think we need this Consent Actions of the Board of Directions, in lieu of a Meeting and Amendment placing him as Trustee because the chairman of the Board told him he shouldn't be required to do anything and he's a very smart attorney, the chairman I mean, lol. Just kidding but that's seriously what the Trustee to be told me. All because the Consent of Directors says by Unanimous Consent, in lieu of a meeting...... Honestly I am not document strong but how can I explain that this is required in order to amend the plan and this Consent of Directors is what is done in lieu of the meeting. Are they supposed to email this to all the Board members? I only have the President signing this Resolution by the way, not the entire board and the Trustees and President signing the Amendment. Help.

Thanks all. I think you are right on the QACA and this would be my first, why does it allow for 2 year vesting and do you all agree the formula is okay. Is a QACA really a good thing when 1, there is rarely turnover and 2, everybody wants to contribute. Seems to me this law firm, who doesn't do administration, set this plan up with no real knowledge.

Need some direction. Picked up a takeover plan where the formula for the Safe Harbor Match is 100% up 1% of pay and 50% of elective deferrals for deferrals which exceed 1% but does no exceed 6%. Does that meet the Safe Harbor requirements? Would seem to me it doesn't even meet the Basic. Also, has something changed or is the person that wrote this doc totally off base as they but a requirement of two years of service to vest in Safe Harbor Match. Mandatory 100% vesting didn't change did it? Thank you