KMG77

I assume that they are also providing a cross-tested allocation. Typically the safe harbor contribution is "made up" in that allocation. (e.g. an HCE would get a 9% allocation or whatever the general test would support). The advantage to excluding HCEs is in situations where you would find out the owner's son joined the company after the fact and it would negatively impact the cross-tested allocation.

There could be a document limitation that Roth contributions may only be withdrawn if the distribution is qualified. i.e. Age 59 1/2, 5 year aging...

If the plan had 100 participants on the first day of the plan year (outside of the 80/120 rule) and they dropped below 100 on another day in the plan year, they still have to have an audit. The ppt count is measured on the first day of the plan year.

I don't think it is a PT, but it would definitely be a plan qualification issue. EPCRS has a procedure for correcting ineligible distributions.

The other advantage to continuing to file (besides not having to deal with a potential delinquency notice) is starting the clock on statute of limiations.

My understanding is that true severance pay is never considered compensation for plan purposes. You can check out the Compensation Glossary in the ERISA outline book -- it does a nice job of breaking down the components for W-2, 3401(a), Safe Harbor 415 and 415 comp -- you'll also have to check your document to make sure those base definitions don't have any additional exclusions/inclusions. My copy that I have on hand excludes severance pay from all four base definitions.

Once I get a formal response to the proposal, I'll update.

I have a client currently going through Audit CAP for a situation where the HCEs did not receive the required contributions -- the NHCEs received very generous contributions. The IRS has not been very sympathetic to the situation at all... we're still working on negotiating sanctions.

I would be interested to see what you come up with. We also use Relius and as you mentioned the calculations are less than desireable and the reports are not useful for a proposal format. We also use their documents -- while the document supports a cross-tested plan, the doc software doesn't have anything to do with the actual projection.

Is the amount received a sub-ta fee? 12b-1 fee? My understanding is that administrative fees only need to be disclosed at the line item participant level if they are being charged to participant accounts and are NOT included in investment-related fees. "An administrative expense, to the extent not otherwise included in investment-related fees and expenses, must be disclosed if they are charged to the plan. The notice must explain how the charges will be assessed (i.e., pro rata or per capital) or affect the balance of each individual account. These same expenses must be disclosed quarterly (once in any three-month period) in actual dollars charged to a participant’s or beneficiary’s account in the previous quarter, including a description of the service provided. The Department intends that these fees may be reported in general categories such as “recordkeeping” or “accounting” and that a service-by-service breakdown is unnecessary. This requirement will have minimal impact because for most plans all administrative costs are included in investment-related fees."

If a plan is wholly invested in a Group Annuity Contract would it be inconsistent to also have a Trust Agreement in place? Without the Trust Agreement (or trust provisions) the duties, powers, liability, etc. of the Trustees are not set forth. The Trustees are both named and Trustees by virtue of being the contract holder. While I've been able to find references to plans that both had a GAC and a Trust Agreement, I wasn't able to determine if there were either "true" trust assets in addition to the GAC or if the contributions hit a trust before the GAC or like in my situation the Trust Agreement would primarily outline Trustee provisions. Thoughts?