Alex Daisy

Can someone explain to me Otherwise Excludable Employees in the ADP test? I have a Plan where the Eligilibilty Requirment is Age 21 and 1 year of Service, with Quarterly Entry Dates. For example, an employee was hired on 7/1/2007, and they worked 1,000 hours from hire date to anniversary date. For the 2008 ADP test, can I exclude them due the the Otherwise Excludable Employee rule and why? Thank you

A client who participates ( a doctor) in a company that payes him W2 wages of about $100,000 and he also has an S corp that had flow thru income of about $100,000. If he had a solo K set up, would we be able to consider both his income and profits for deferral and/or PSP contribution? Thank you.

A client who participates ( a doctor) in a company that payes him W2 wages of about $100,000 and he also owns an S corp that had flow thru income of about $100,000. If he had a solo K set up, would we be able to consider both his income and profits for deferral and/or PSP contribution? Thank you.

I am reading a Plan Documument that defines compensation as "W-2" Compensation. "Testing Compensation" means wages within the meaning of Code section 3401(a) and all other payments of compensation to an Employee by the Employer (in the course of the Employer's trade or business) for which the Employer is required to furnish the Employee a written statement under Code sections 6041(d), 6051(a)(3), and 6052. Testing Compensation must be determined without regard to any rules under Code section 3401(a) that limit the remuneration included in wages based on the nature or location of the employment or the services performed (such as the exception for agricultural labor in Code section 3401(a)(2)). For any Self-Employed Individual, Testing Compensation shall mean Earned Income. Can someone explain to me what Box on a W-2 I should be looking at? And if the participant made any Employee Deferrals, should they be included in the definition of Comp? Any help would be greatly appreciated. ALEX

If an employee is a participant in the Plan as of the Change in Control date, but did not have an account balance, are they 100% vested in the match if they start deferring after the change in control date?

The 1099 R instructions read: Non Qualified Plans, for non employees, these payments are reportable on form 1099-Mic. Now what is a "non employee"? Is a person who used to work for the company considered a NON EMPLOYEE?

A Terminated Participant took a distribution from a Non Qualified Deferred Compensation Plan in 2008. The participant was not working for the company in 2008. Should this distribution be reported on a W-2 or 1099 Miscellaneous?

Don't forget to evaluate the terminations to consider if a partial plan termination occurred with respect to the terminated employees. 68% of the workforce terminated in 2008. I would think this counts as a Partial Plan Termination. Does this mean that all of the terminated participants automaticially become 100 % vested? Is there any wiggle room here to not 100 % vest them?

I meant to type over 65. My question is: How do you calculate an EBRA for a participant over the Plans Normal Retirement Age?

Can someone shed some light on how to calculate an EBAR for a participant over the Age of 65? I am using a On Line Software Program called "Pensions On Line" and I do not think it is calculating it correctly for this participant who is over age 50.

I am trying to help a client who currently has a 401k new comp plan. They also have director's fees from a foreign subsidiary that they own 78% of. Would they be able to shelter any of the director's fees in a SEP, Keogh, etc.? I have been told that the 415 limits apply but I thought that only related to the deferral limits and profit sharing amounts in a defined contribution plan of a non controlled group. They plan on maxing out in the new comp plan between the profit sharing portion, employer match, and elective deferral. They are over 50. Would the be able to set up a SEP or Keogh Defined Benefit Plan to shelter some of the directors fees?

The document does not how to address a coverage failure. The high number of terminations were due to the ecomony and the fact that the company moved from NY to SC. This is a takeover case, and I am not sure if the coverage test passed or failed in previous years.

I omitted the terminated participants from the ACP test, and it now PASSES!!! My problem is now the coverage test fails, becuase I have to include all the terminated employees with over 500 hours as not benefiting. Any suggestions to this problem?

I have a Plan with a last day rule for the Employer Match. The match formula is 25% of deferrals up to 6% of compensation. I need to allocate the 2008 match now. When I allocate the match, the plan fails the ACP test. A lot of NHCE’s were terminated in 2008 and not eligible for the match. How should I handle the ACP test? Should I allocate the match for 2008 according to the formula even thought the ACP test fails? And then processes the ACP refunds? Should I only give the HCE’s the match that would pass the ACP test? Any other suggestions?

A participant under age 50 had an Excess Deferral of $7,000 in 2008. They contributed $22,500 in total for 2008. This participant is a HCE. It is my understanding that the excess deferral needs to be included in the ADP test. Since this excess was caught before the W-2 was issued, can we fix the W-2 to include the Excess deferral as Income and therefore, not have to include the excess deferral in the ADP test?

The Plan Document says W-2 Compensation should be used. What if the company was using new comp for 2008 and just now realized it should be gross comp? Does the IRS have a correction program for this?

A employee makes $1,000 a week, with $100 deducted for medical on a Pretax basis. The participant has elected that 10% of his pay be deducted for his 401(k) Employee Contribution. Shoud the employer withold $100 for the EE deferral ($1,000 * 10%) or $90 ($900 * 10%)? Is the deferral based on the Gross Comp or Net Comp after the $100 Medical deduction?

Mo Jo: I agree with you. The reason to include the loan fee in the amortization schedule is to give the participant the ability to pay back the loan and the loan fee plus interest to their account. My question now is this allowed by the rules?

A TPA charges a $150 loan fee to the participants account to process a loan. Can this $150 loan fee be included in the amortization schedule and paid back into the participants account? For example: Loan $10,000 Loan Fee: $150 Amount deducted from Partcipants Account in total : $10,150, but the participant only receives $10,000. Should the loan amortization schedule be for $10,000 or $10,150? Any help is greatly appreicated. ALEX

I recently discovered that a HCE made a deferral for 2006, but he never received compensation for that year. This is a self employeed individual. Since the HCE had no income, he cannot have any deferrals. The contribution could not have been a deferral, since there was no income to defer from. What would be the correction method to get the contribuion out of the participants account?

A participant failed to take a RMD for 2007. We just took over the Plan from another Recordkeeper. Now I am trying to calculate the 2008 RMD, and need to get the 12/31/2007 Account Market Value in order to do the 2008 RMD calculation. Since the 2007 RMD was never done, the 12/31/2007 Account Market Value will still include the 2007 RMD amount that was not distributed. My question is do I need to deduct the 2007 RMD amount that was never taken from the 12/31/2007 Account Market Value in order to get the true 12/31/2007 Account Market Value to calculate the 2008 RMD?

A client is looking to start a Non Qualified Deferred Compensation Plan for 2009 They would like to give their key executives a 10% bonus on all compensation on excess of the IRS Section 401(a)(17) limit. For example, a executive makes $500,000 in 2009. His company contribution would be $25,500 (10% * (500,000 - 245,000)). Would this be considered a Top Hat Plan or Excess Benefit Plan or neither? Any help you can give me would be greatly appreciated. ALEX

The Plan has 3 HCE's and 2 HNCE's, and they would all be benefiting from the increased Safe Harbor Non Elective Contribution. I could find nothing in the regulations to show that this was allowed or disallowed. Any help would be greatly appreciated.

Can you give more than than a 3% Safe Harbor Non Elective Contribution and still be considered a Safe Harbor Plan? What is the Non Elective % Maximum? Thank you, ALEX

Can we issue a seperate Black Out Notice to employees who seperated from service? The Active Participants received the Blackout Notice in a Timely Manner.