HarleyBabe

HERE'S THE SITUATION: HAD A PLAN THAT TERMINATED, ACTUALLY BOUGHT OUT AND ASSETS WERE ROLLING INTO THE NEW FIRM'S PLAN. PRIOR TO THE TERMINATION, SEVERAL TERMINATED PARTICIPANTS WERE PARTIALLY DISTRIBUTED FOR ONE REASON OR THE OTHER. BEFORE FINAL PAYOUT COULD OCCUR TO THOSE PARTICIPANTS, PLAN TERMINATES AND MINUTES SAY ALL PARTICIPANTS 100% VEST (STANDARD LANGUAGE). QUESTION IS, THOSE TERMINEES WHO BEGAN PAYOUT, DO THEY RECEIVE NOW 100% OF EVERYTHING OR THEIR REMAINING VESTED BALANCES PRE-TERMINATION, FORFEITURES THEN ALLOCATED, AND THEN ALL PARTICIPANTS 100% VESTED. SEE 1.411(A)-7(D)(5) IT SEEMS TO SUGGEST, YOU CAN FINISH PAYING THEM ON THE ORIGINAL VESTING SCHEDULE, I THINK. NEED AN EXPERT ANSWER. SORRY FOR THE CAPS BY THE WAY. CLIENT DOESN'T WANT TO 100% VEST THOSE PARTICIPANTS, MY FEELING IS WHETHER YOU 100% VEST THEM OR NOT, SOMEONE IS GOING TO BE ALLOCATED THE MONEY AND THEN DISTRIBUTED SO WHAT'S THE DIFFERENCE, REALLY. ATTORNEY SEEMS TO THINK YOU CAN PAY THEM ON THE PRIOR SCHEDULE, I'M NOT SURE WHAT I THINK. HELP:)

HAS ANYONE HAD A CLIENT RECEIVE AN ERROR AND NOT LET THEM EFILE BECAUSE OF INTEGER PROBLEM? CAN'T SEEM TO FIND WHAT THE PROBLEM IS. I'M THINKING IT HAS SOMETHING TO DO WITH THE & SIGN IN THE PLAN NAME?

Yes, the original was about the EZ. Okay, thanks for all the great input.

No, I agree, I'm talking about NON EZ plans. It seems you can use the Scheude SF for some plans that we would normally use the reg 5500 and schedules for. Is there a reason, that the community would not use it in that instance? I just want to do what most others are doing and don't want to miss anything that could come back to bite me later.

Okay, so still somewhat perplexed?? Isn't the From 5500 and schedules public info? If so, what is the issue with using the SF for non EZ plans? Thank You

I'm feeling really stupid right now but I understand the SF is public info, but isn't the 5500 and schedules as well so what is the difference? Anyone can go on Free Erisa to view forms so what's the difference.

So....after much controversy within my office, what is the opinion of the rest of the community with regards to Schedule SF rather than Schedule EZ, in regards to confidentaility issues and such. I guess, when is an appropriate time to use an SF?

I'm having an issue with the EBAR for an HCE from the 2008 year to the 2009 year. This particular person was at the comp cap for 08 and 09, made the same amount of deferrals, received the same cash balance contribution except for the difference in the comp. limit, basically the same everything give or take a small amount of money. The EBAR is literally double in 09 and therefore I am failing testing. Several other participants doubled as well and some of their info was almost identical year to year. Has anyone else ran across this with relius? Can anyone give me a hint as to what I might look at? Were there changes that I'm not aware of that would impact the EBAR's the much? Any help would be greatly appreciated. Thanks.

I guess I don't understand your statement. If you want the "plan" to be ACP safe harbor, then it must satisfy all of 1.401(m)-3, including 1.401(m)-3(d)(4). The issue is: what is the "plan"? If you are applying 410(b) separately to those who could be excluded, then you have two separate "plans" for testing. One "plan" covers the employees who have satisfied the lower minimum age and service conditions in the plan, but have not satisfied the maximum statutory age and service conditions. The other "plan" covers employees who have satisfied the maximum statutory age and service conditions. See 1.410(b)-7©(3). Suppose you have a plan that provides for immediate eligibility for deferrals and requires 6 months of service with semi-annual entry to receive employer contributions, including the SH match. You choose to treat it as two separate plans under 410(b) because otherwise, as you point out, it won’t be SH. The first “plan” to test is the eligible employees who satisfy age 21, one year of service and semi-annual entry. All eligible employees in this "plan" are eligible for the SH match. So, assuming no other problems, this “plan” is SH. The other “plan” is the eligible employees have not satisfied age 21, one year of service and semi-annual entry. This is all eligible employees who are not in the first “plan”. This includes some who are only eligible to defer and some who are also eligible for the SH match. This “plan” does not satisfy 1.401(m)-3, so it is NOT SH. Also see 1.401(m)-3)(j)(3). But, do you really care? In most cases, this “plan” will not include any HCE’s, so it will pass ACP. If an owner’s family member is in this plan, then they may get a refund their first year. In a 403(b), the sponsor is a non-profit, which doesn’t typically have owners. I am still confused and let me say why. If this was a 401(k), I am totally on board, but it's 403(b) where there is no ADP testing. My understanding that is yes, if you are eligible to defer you are eligible for the match, period, unless you are using the otherwise excludable group in a 401(k), but how is this affected when it's a 403(b) because the first part of satisfying the safe harbor match provisions is satisfying the ADP safe harbor but there is none. Does that make sense. I am just really confused. HELP Now to add to this further, lets say we are writing the plan, immediate entry, but only those who have met the statuatory exclusions are receiving the safe harbor match, how would you write that in the document? Curious. I have document writers, (legal folks who don't actually do the admin)sorry if I have offended anyone, that seem to be using some pretty loose language. Just give an example. Thanks

I guess I don't understand your statement. If you want the "plan" to be ACP safe harbor, then it must satisfy all of 1.401(m)-3, including 1.401(m)-3(d)(4). The issue is: what is the "plan"? If you are applying 410(b) separately to those who could be excluded, then you have two separate "plans" for testing. One "plan" covers the employees who have satisfied the lower minimum age and service conditions in the plan, but have not satisfied the maximum statutory age and service conditions. The other "plan" covers employees who have satisfied the maximum statutory age and service conditions. See 1.410(b)-7©(3). Suppose you have a plan that provides for immediate eligibility for deferrals and requires 6 months of service with semi-annual entry to receive employer contributions, including the SH match. You choose to treat it as two separate plans under 410(b) because otherwise, as you point out, it won’t be SH. The first “plan” to test is the eligible employees who satisfy age 21, one year of service and semi-annual entry. All eligible employees in this "plan" are eligible for the SH match. So, assuming no other problems, this “plan” is SH. The other “plan” is the eligible employees have not satisfied age 21, one year of service and semi-annual entry. This is all eligible employees who are not in the first “plan”. This includes some who are only eligible to defer and some who are also eligible for the SH match. This “plan” does not satisfy 1.401(m)-3, so it is NOT SH. Also see 1.401(m)-3)(j)(3). But, do you really care? In most cases, this “plan” will not include any HCE’s, so it will pass ACP. If an owner’s family member is in this plan, then they may get a refund their first year. In a 403(b), the sponsor is a non-profit, which doesn’t typically have owners. I am still confused and let me say why. If this was a 401(k), I am totally on board, but it's 403(b) where there is no ADP testing. My understanding that is yes, if you are eligible to defer you are eligible for the match, period, unless you are using the otherwise excludable group in a 401(k), but how is this affected when it's a 403(b) because the first part of satisfying the safe harbor match provisions is satisfying the ADP safe harbor but there is none. Does that make sense. I am just really confused. HELP

I am confused and need clarification. If I have a 403(b) Plan that wants to implement a safe harbor match in order to avoid ACP testing, are the rules the same as 401(k) Plans? I'm having great difficulty finding information specifically for the safe harbor match in a 403(b)? The specific issue is, the elective contributions part of the 403(b) is immediate entry. The want to to put a 1 year wait on the safe harbor match. In my mind, which is with 401(k) plans, is that no, can't if you are eligibile to defer you are eligible for the safe harbor match unless you are utilizing the statutory exclusions. However, there is no 401(k) testing in an 403(b) plan so it's really unrelated. Question is, what are the eligibility restrictions when you are trying to implement a safe harbor match for ACP testing in the 403(b)? Also, can you point me where you found the answers? Thanks.

So, here's the situation and I just do not have time to look up the ramifications of what the attorney is doing, considering the time of year and it's not a calendar year plan. Have a non-calendar profit sharing, Sept. 09 year end. Have a calendar 401(k). The profit sharing plan had very large sums of money prefunded to it in order to prepare for the normal allocation they provide at year end. Here lies the problem, the company was bought out and for other reasons, they can't allocate that money and we're talking about a lot of money, 6 figures. They thought they would just pull it out, wrong. The attorney thinks it can be solved by mergining the profit sharing with an existing 401(k) (yes they were too separate plans, two docs...) and use that money to fund the match for the year. My issue, the merge into the 401(k) is after the money was already deposited. Suggesions? The attorney also wants to 100% vest the profit sharing as of the prior plan year in order to maybe make this look a little better in the eyes of GOD aka IRS, DOL. I have a conference call today and I need someone to help me find why this is not okay so that I have regs in front of me. Thanks as always.

Has anyone began filing electronically for their clients yet? If so, not trying to reinvent the wheel. What's your process? Do you send off and they sign and file, how do you know that they filed it, or do you file for them and electronically file after they review? I'm looking for specifics as far as who does what and when? Thanks for any direction.

Thanks for clarifying. I think I will go with this then.

That is a provision expounding upon the limitation set forth in Treas Reg § 1.401(k)-1(d)(1) relative to elective deferrals, not matching contributions. So on your facts, as long as the matching you mention is not QMACs, then $8,000 could be taken--$3,000 from the matching and $5,000 from the elective deferrals. Please forgive me but I am still confused, must be a mental block. The quote above state the distributable amount is based on elective deferrals, so how, if my elective deferrals in aggregate are only 5000 can they take another 3000 from match. This is the argument in my office. Is the amount taken based on elective deferrals regardless of source? Your last paragraph seems to say you can take the extra 3000, therefore, it is not based solely on elective deferrals, but the quote says it is. Help.

I have read the regs and am a bit confused. Say, a participant only has 5000 available to take from the salary deferral account for hardship, meaning their salary deferrals for the past years in aggregate are 5000 not including earnings, but, the participant needs 8000 for the hardship. There is a match source in the plan and the plan allows withdrawals from that source. Does that mean that even though the aggregate salary deferrals are 5000 that the remaining 3000 could be withdrawn from match, or, do the regs mean that regardless of the balances in the different sources, you can only withdraw 5000 period from salary deferral and match? Hope that makes sense. I was always under the assumption that a hardship was determined based on aggregate salary deferrals regardless of which source it is withdrawn from. Maybe I am wrong, I hope for this participant's sake. Help please. Thank You.

To continue this discussion further. What about participants who make in excess of 415 comp for the year but it isn't an equal amount each payroll. They may not exceed the 415 comp or they may. If it is a per payroll match, isn't the match simply what it says, per payroll. How do you possibly take into account the ANNUAL 415 comp limit on something like this?

Thank you, that was great and very helpful. quote name='ak2ary' post='160709' date='Mar 28 2008, 03:03 PM']For 2008, you must certify the plan's AFTAP. If you do not yet have the data to certify 2008, or if the results are better you can certify the 2007 AFTAP. Beginning April 1, the 2007 AFTAP-10% would serve as the 2008 AFTAP until the 2008 AFTAP is certified. The 2008 AFTAP is (1/1/2008 assets + last 2 yrs annuity purchases for NHCEs) / (1/1/08 Funding Target + last 2 yrs annuity purchases for NHCEs). The 2007 AFTAP is (1/1/2007 assets + last 2 yrs annuity purchases for NHCEs) / (1/1/07 Current Liability+ last 2 yrs annuity purchases for NHCEs) In both cases, the calculation is done by reducing the assets by the credit balance. However, if the result would be at least 90% for 2007 if credit balances remain in assets, you can leave the credit balance in the assets. If the result would be at least 92% for 2008 if credit balances remain in assets, you can leave the credit balance in the assets. If you are using the 2007 AFTAP - 10% as a proxy for 2008 AFTAP, you must also perform a certification by 10/1 of the actual 2008 AFTAP If you certify the 2008 AFTAP, there is no need to certify the 2007 AFTAP If the AFTAP (either 2007 or 2008) is not certififed by 4/1 the plan is deemed to be less than 60% funded. All benefit accruals are frozen, no amendments can be adopted which increase benefits and accelerated distributions are eliminated If the AFTAP (either 2007 -10% or 2008) is certified as between 60 and 80%, no amendments can take effect which increase the funding target, accelerated benefit payments are limited but not eliminated and the plan must give notice to participants of the impact of the benefit restriction. If the AFTAP (either 2007 -10% or 2008) is certified as between 80 and 100%, no restrictions apply As of 10/1/08, you can no longer use 2007 - 10% as a proxy for 2008. Thus, if the 2008 AFTAP is not yet certified, the plan is deemed as less than 60% funded. All benefit accruals are frozen, no amendments can be adopted which increase benefits and accelerated distributions are eliminated. This status will last until THE LATER OF January 1, 2009 or the date that the 2008 AFTAP is actually certified. I am not aware of any IRS provided standard certification form. The proposed regulations under Section 436 set forth some requirements for content, while the actuarial standards of practice set forth additional requirements for certifications and statements of actuarial opinion

Can someone explain what the difference is between the 4/1/2008 cert and the one due 10/1/2008? I think I understand that the one due 4/1/2008 is preliminary, basically for 08 based on 2007 numbers. I'm using the sample letter and cert that Jim Holland gave in his webcast. Does anyone have an example of one they are using for the certs due 10/1/2008? I assume that if we have all of the 2007 data and the client has made the 2007 cont, we can go ahead and certify 2008 now and only have to do 1, is that correct? Also, we can definitely use the credit balance, correct? By the way, who the heck thought of these dates they were due by, 10/1/08, like we're not doing anything else at that time.

Should we be using the 2008 mortality tables being used for DB plans for cross-tested DC plans as well, rather than the 1983 GAM? If so, please be specific as to which ones. Thanks as always to anyone who can help.

I agree. Have done this several times. Never had any issues with DOL and actually had a plan audit on one. The fact that we caught it and filed the From 5330 and corrected the interest was enough for them.

I had the similar post but no one responded. There was relief if you missed the cycle A filing through January 8, 2008 in you were in good faith reliance. My question was, what exactly needs filed on the 8th. There was some hint that you could file a working document if you had all cumulative amendments signed but I think that was only if you met the original deadline. Does anyone know about this extension that was given? It is on the IRS website. If so, what exactly do I need to file?

Definitely, Sal's books. At the very least, I can always quickly find the code and reg for my issue through those books.

The outstanding loan balance is added to determine a total account balance. You then take 1/2 of that. From that amount you subtract the outstanding loan balance and that gives you an amount that could theoretically be borrowed. However, you have to be careful with the new regs for 72P and replacement loan issues. Let me know if you need an example.

Also, keep in mind that a recent ASPPA ASAP noted that letters were being generated in error stating that 2004 forms were not being filed. I received 2 myself. The notice stated that you should just send a signed copy even if you though they were filed.