Chippy

Tom, this is a corbel non-standardized. The basic plan document has the formula, but it says for a participant that has not severed employment. I can't find a section that refers to terminated participants paid a partial amount. But Relius does use method 2, which is what I've always used. Doing it method two, the particpant was overpaid by 341. Would that be correct?

That would be fair to pay the participant the additional due without regards to gain/loss, it wasn't his fault he was not paid out correctly. Would it be appropiate to forfeit the remaining balance now, so that he is 100% vested in the remaining balance? I'm just trying to think of the cleanest way on Relius for his vested balance to show correctly.

I have an annual profit sharing plan. The termiated participant was paid 20% of his 12/31/2006 balance during 2008. 2007 there was a gain, 2008, loss. If the participant was due 2,200 as of 12/31/2007, but the participant was mistakenly paid 20% of the 12/31/2006 balance, which as an example was 2,100. How would his vested balance be calculated at 12/31/2008. I have always used ending balance plus distribution paid during year times vested percent, less amount paid. This way it shows he was overpaid, but is this particpant due the difference between the vested balances at 12/31/2006 and 12/31/2007, which would be $100 less the loss for 2008? I hope this isn't too confusing. Has anyone ever had this happen?

It was wired on 9/18, and posted to the participants on 9/19. No postmark.

So as long as the 2007 and 2008 contributions do not exceed 25% of compensation, then the client may deduct both contributions for 2008. And as for testing in the plan, 2007 can stay as is, and for 2008, I would only test the 2008 contribution? I just want to make sure I have this straight. Thanks

The due date of their tax return was 9/15. Shouldn't it have been deposited by that date?

My client deposited their 2007 non elective contribution on 9/19/2008, so it was late. How is this corrected in regards to the corp. tax return and the plan? If they amend the corp tax return, can they deduct 2007 and 2008 on their 2008 return? Will that affect any testing for the plan 415, 401a4? I have never had this happen so I'm not sure what all is affected by the late deposit.

Thank you very very much. This was a big help and much appreciated!

I ran the test with rate banding and I set the bands manually for that group. 17.01 for the high and 15.39 for the low. (relius would only take 2 decimals) With those, my hce is at 15.39. and it brought 4 nhce's into the group at 15.589%. So it is now passing with flying colors. I have never used the rate banding option on Relius, but for future to be sure I understand, if I have a group that is failing, I use the HCE as the midpoint and manually input the high and low for the rate bands based on the 5% above and below? If there is more than 1 hce in a group that is failing, do I average their percentages to come up with a mid point?

This is the only plan the ER has, I ran the ABT test to include all sources, EE and profit sharing. There are 126 NHCE's and 32 hce's. The NHCE's are 14.387% and 70% of the HCE's is 5.779. The plan is passing the ABPT but not the ABT. 410b is passing. 93 out of 126 nhce's benefit and 18 out of 32 hce's benefit. When I run the 401a4 summary on Relius (which I know Tom doesn't like) It says the plan is failing the ratio percentage test and it is failing the nondiscrimination classification test. It is passing the ABPT. the rate group that is failing has 1 hce and 1 nhce. When I check the rate banding option on Relius, it brings 4 additional NHCE's into the group. Tom, the ebar on the abt for this hce is 24.705 and the nhce is 21.622 but when I print out the rate group, without banding, it has the ben pct (ebar) as 16.196 for the hce and 16.914 for the nhce. How does it calcuate the ebar for the rate group? With rate banding, it shows the hce at 14.654 in the rate group. The nhce is still at 16.914 with the rate banding. I guess I don't understand the percentages used for the rate banding.

I have a 401(k) plan with a new comp formula for the ER non-elective. When running the nondiscrimination testing on Relius, the plan is passing ABT and Gateway. The plan is failing the ratio percentage test. If I run the test and check the rate banding box on relius then it passes. Has anyone used this as an option to get the plan to pass? If it can be used, can you explain what it does? I tried the stat. exlcusion and impute disparity options, but the plan still wouldn't pass.

I have a 401(k) plan and 3 of the participants have life insurance polices in the plan. Do I report the premiums in Part II, 5 a & b or in Part III, 9a? I always reported them in Part II, but we recently took over some new plans and the prior RK reported them in Part III and in part II, 5 a. Would just like to verify how to report them. Thanks

I have a company that acquired a new company during March 2007. I don't know if it was stock or asset sale. The plan is counting prior service for eligibility purposes. The acquired company has one employee earning over 100,000 in 2007. I don't have the 2006 compensations. In determining the HCE's for 2007, does the compensation from the acquired company count? If it does, can I test the acquired company separately? This person is deferring a high percentage and will make the adp/acp test fail if he is determined to be a HCE for 2007. The plan has 3 companies participating and is a controlled group.

It's a standardized plan, so all active receive the profit sharing. I thought I should allocate the intergrated profit sharing contribution as though the plan is top heavy. 1st step, 3% to everyone, 2nd step 3% on excess, but since there isn't enough to fully complete that step, it would just be the remaining $$ to those with excess comp. What is throwing me off is the match. Do I just ignore the match when allocating the p/s contribution? I"m checking someone's work and they allocated the p/s contr. as though the plan was not top heavy, pro rata on comp plus excess. I would not have done it this way and I just wanted to check to see which was the correct way. thanks for your help.

yes, the employer contributed 100,000 which came to 3.08% of eligible comp.

Just to be sure I understand. I will allocate the intergrated profit sharing contribution as though the plan is not top heavy. Then test the plan to make sure everyone has received the top heavy minimum between the profit sharing and the matching contributions? There is one person that did not receive the minimum, she did not defer and did not receive a match. So I will then post an additional contribution to bring her to the 3%?

The EGTRRA amendment does say that matching contributions shall be taken into account for purposes of satisfying the minimum contribution requirements. so, how does the intergated profit sharing contribution of 3.08% of comp. get allocated? Do I allocated as pro rata on comp plus excess or is it allocated as a top heavy plan without match is allocated? Am I making this harder that it is? It's been a long year so far.

The document is a Corbel Standardized Prototype. This is their only Plan. The p/s contribution is the standard intergration formula. I don't see in the document where it addresses if the match can be used to satisfy the top heavy minimum.

I have a plan that is intergated with social security for the profit sharing contribution. They also make a matching contribution that is 50% up to 6% of comp. The plan is top heavy. For 2007 the profit sharing contribution is 3.08% of compensation. I know how to allocate the contribution if the plan is top heavy, 3% to all and for the remaining allocated on the excess comp. What is confusing me is the match and the top heavy minimum. If I allocate the profit sharing contribution prorata on comp plus excess comp (as if not top heavy) and then add the match, everyone but one receives at least 3% of comp. I guess my question is do I ignore the match when it comes to allocating the profit sharing contribution and everyone would receive the top heavy minimum with the profit sharing. I hope that isn't too confusing.

I have a controlled group. Companies A and B sponsor a P/S plan and companies C and D sponsor a 401(k) Plan. To calculate the top paid group, I think I need to count all employees of the 4 companies. The top 20% of the group came to 31. To divide between the plans, do I start with the top 31 highest paid of the group and then see who falls into each plan? The 401(k) has 86 employees to be included and the p/s plan has 73 for a total of 159. 20% of the 86 is 17. Is it possible that only 9 of the top paid group would be considered for this plan? or is each plan considered separately? (I hope this isn't too confusing)

In a cross tested 401(k) profit sharing plan with two groups, partners and everyone else. Is it possible for the employees in the partners group to receive a different percentage in order to max each of them out for the year. As an example, partner A deferred 5% and received SH nonelective of 3%. He would receive a p;s of 12%. Partner B deferrs the max, receives the 3% SH, so his PS contribution to max out would be 22,400 or 10.18%. Is this possible as long as the plan passes all testing? I tried using the contribution optimizer in Relius and this is what it did. Just wanted to see if this is allowed.