Richard Anderson

The compensation used to calculated the deduction limit is the compensation paid to the participants during the employer's taxable year. Therefore, if the employer is on a calendar year, you would use compensation from 1/1/01 thru 12/31/01.

For plan year beginning 01/01/2002 seperate testing will be used for 401(B) and 401(a)(4) for those not meeting a YOS. The disaggregated group is comprised of only NHCEs and therefore passes 410(B) and 401(a)(4). The non-disaggregated group consists of only HCEs and therefore passes. Is the disaggregated group subject to the Gateway? Is the Gateway applied before or after disaggregation? The employer would like to give the NHCEs only 3% TH minimum for the 2002 plan year.

Our pension software prints the following above the line for the employer's signature on the census data form: Confidential information has been compiled from our records and is complete and accurate to the best of our knowledge

In a new comparability money purchase plan would the following contribution be difinately determinable? Class 1: 3.5%, however if non-discrimination will not be passed at 3.5%, the percentage for Class 1 will be increased up to the point where non-discrimination testing will pass. Class 2: 25%

Employer wants to eliminate participant direction and pool assets, with annual balance forward valuations, with distributions occurring after the next annual valuation after termination. I came across another potential problem with this. The plan allows in-kind distributions. Currently, with participant direction, a few (very few) terminated participants will have their account balance transferred to an IRA with the same custodian, rather than liquidating their account and transferring cash. Can this in-kind distribution option be eliminated at the same time as the elimination of investment direction?

An employer wants to eliminate participant direction of investments, which is not a protected benefit. But, currently participants may take a distribution immediately upon termination. Can the plan be amended to change the distribution date to after the end of the plan year in which termination occurs, or is that going to violate 411(d)?

The compensation definition for deferrals is not required to satisfy 414(s). Of course, the definition for testing (ADP/ACP) must be a definition that satisfies 414(s). I'm pretty sure that if it is a safe harbor 401(k) (no ADP required) then the definition for both deferrals and match allocations must satisfy 414(s).

No, the 402(g) limit ($11,000 in 2002) is an individual limit, not a plan limit.

In a one participant plan 35,500 was contributed during the plan year that ends 12/31/01. $500 to set up the plan account, and then an additional 35,000 later during the year. Does exceeding 415 cause the 415 excess to be non-deductible for the employer's 12/31/01 taxable year?

AndyH, I don't understand the relevance of whether the plan is on cash or accrual. As of 12/31 all assets of the MPP now become assets of the PS plan, including the MP contribution receivable. Why would an accrual plan have to change to cash?

For 2002 I have a New Comparability plan with three allocation classes: 1. HCEs employed at year end 2. NHCEs employed at year end 3. Employees terminated before year end The plan has no last day or hours requirement to be eligible for the employer contribution. Providing that the plan otherwise satisfies 401(a)(4), will the following allocation to the classes satisfy the gateway test? 1. 25% 2. 5% 3. 0% The plan would be set up this way to have the option of not including terminated participants if a4 could be passed, but including them only if necessary to pass non-discrimination testing. Is class 3 considered "not benefiting" and therefore not required to get the 5% gateway minimum?

There is no last day requirement to accrue a top-heavy benefit in a defined benefit plan.

I misread the oringinal post. I thought $36,000 was the ER contribution, not the total. Appleby's analysis is correct.

I think not. For plans beginning after 12/31/2001 the 415 limit for DC plans is the lesser of $40,000 or 100% of comp. $11,000 deferral and $36,000 ER contribution equals $47,000.

I'm new to 403(B) plans. This is my first (and only) one. Is the ACP on matching contributions done exactly like for a 401(k) plan? Prior or current year; statutory exclusions; etc. Are the 180% and 140% safe harbors still in effect?

If a plan treats plan loans as participant directed, but all other investments are pooled, is the plan a "partial participant-directed account plan"? We have not been adding code 2H if the only participant direction is for plan loans. I believe this is correct, but, would like to be sure.

Thanks Patti, I tryed to e-mail you through your profile, but could not. My e-mail is richard@schillerspension.com Thanks again for your help. We have a one participant plan that has never filed and went over $100,000 in 1994; and we have not been able to locate any 1994 - 1996 EZ forms. This sounds like a solution.

pmacduff, Where are the instructions for late filing that you refer to? Is this in the 5500 instructions, if so, where? Thanks.

Does the Plan Administrator have a fuciduciary obligation to not approve a loan when the chance of non-payment is substantial?

Thanks Kristina, That's what I thought, but someone in the office here thought that if you had disaggregated portions of the plan, then that required you to fill out line 4.

Say a plan invests in variable annuity contracts with an insurance comapny. Is that considered a "pooled separate account" and therefore a Schedule D would be required?

You are correct.

All nhces and hces benefited for the 401k part of the test. There was no matching contribution, so no hces benefited for the 401m part of the test. On line 3, can I check box 3d for the 401k part and also check box 3b for the 401m part of the test? Or must I go to line 4 and enter information on each disaggregated part of the plan?

Did the 2 partners have either income or equity ownership of more than 5%? If so, they are owners for key employee purposes.

Annual additions are a participant level limit. If the latest data is for one participant; that participant has not exceeded the annual additions limit (100,000 x .25 = 25,000). If the data is for more than one participant, then it is not possible to determine from the given data if any participants have exceed 415© limits.