Alex Daisy

Can someone shed some light on the proper way to reflect ADP Corrective Distributions on a 5500. Facts: 2007 5500, Plan failed 2007 ADP Test, Paid out $2,500 ADP Refund on March 15, 2008. Should $2,500 be reflected as a Benefit Claims Payable on 2007 Schedule H? Should $2,500 be deducted from Partcipant Contributions on 2007 Schedule H? Should $2,500 be reflected as a Corrective Distribution on 2007 Schedule H? Any help and insight is greatly appreciated.

I have the same situation for 2007, and was wondering if there was a final verdict on the question above? Thank you, Alex

For Plan Year 2007: ADP Refunds paid in January 2008 and included as a Benefit Claims Payable 1d on the 2007 5500. Do I also deduct the ADP Refunds from the Partcipant Contributions on Line 2(a)(1)(B)

A Participant wants to rollover his IRA to his 401K. Is this allowed? I know you can rollover over from a 401k into an IRA, but I was not sure about the opposite way.

2007 ADP Test Fails. One HCE is due a refund of $500. This HCE contributed $12,000 to the Plan in 2007. Since the HCE did not use the $5,000 catch up in 2007, can I reduce the ADP refund and therefore no ADP refund is owed? Or since the EE deferrals were not greater than $15,500, I cannot use the unused catch up amount to offeset the ADP refund. Any help is greatly appreciated.....ALEX

401K Plan has a Last Day requirement to receive Company Match Contribution. I am doing 2007 ADP / ACP testing My question is do I exclude partcipants who terminated in 2007 from the ACP Test? I know they are included in the ADP test, but was not sure about the ACP Test. Any guidance is greatly appreciated. ALEX

Are distributions from Nonqualified Deferred Compensation Plans reported on a 1099 R? If not, are they reported at all to the IRS? If so, on what tax form? Thank you

Yes, the Plan Document was set up as a multiple employer plan.

A company sposors a Plan and two other related companies have adopted the Plan for the benefit of their eligible employees. If none of the companies are considered a "Control Group", can I ADP / ACP test each company seperately? If two of the companies are considered a "Control Group", do I need to ADP / ACP test these companies together? Thank you!

Are there special rules for partners in a 401(k) Plan. A LLP has a 401(k) Plan that matches 4% on employee deferrals. Can the partners also get the match?

Mike: The actuarial facor and PV factors are referenced on page 11-8 (example 11-1), question Q 11:12 of the Coverage and Nondiscrimination Answer Book (3rd Edition). My question is where do these numbers come from. Thanks in advance.

I meant to say the factor was 95.38, not 95.43. My apologies. Below is an example of where the Actuarial Factor is being used. How is this number arrived at: Employee Compensation Allocation Actuarial Factor PV Factor EBAR Ann - 55 $170,000 $17,000 .035155 5,976.35 2.84% Bob - 45 $100,000 $10,000 .015549 1,554.90 6.43% Cathy - 25 $20,000 $2,000 .003042 60.84 32.87%

Thanks for this detailed explanation. So, if I understand you correctly, if the normal retirement age is 65, I can use the Annual Percentage Rate (APR) of 95.43 for every participant, regardless of their age? What about the Actuarial Factor is .035155. Would you know how this is calculated?

Can someone tell me how the Annual Percentage Rate (APR) is determined for cross testing? I see a lot of liturature with the following: The participant is age 55, the interest rate is 8.5%, and the UP-1984 Mortality Table is used. In most examples I see, the ARP is 95.38 or the Actuarial Factor is .035155. Can someone explain to me how these numbers are arrived at? I assume they come from a table. Is this true? Thank you in advance.

Mike: I meant the Individual Rate Group (For the HCE's) Ratio Percentage Test. Let me explain with numbers: Accrual Rate Analysis: Gateway: Passes Ratio Percentage Test: 100% Average Benefit Test: Failed Rate Group Analysis for the HCE's One HCE Passes Ratio % Test The other HCE Fails Ratio % Test Is this OK, or do both HCE's need to pass the Ratio % test? {1} Yes {2} Don't know what the "Overall Ratio Test" is. With 15/17 being NHCE concentration percentage, the mid-point of the safe and unsafe harbors would be a bit less than 25%. Is that what you mean?

New Comp Plan for 2007. Two Owners & 15 HNCE's. Owner # 1 has 2007 compensation of $20,000. Owner # 2 has 2007 compensation of $100,000. Can someone clear up what tests need to pass in order for a New Comparability Plan to meet all Non-Discrimination Testing requirements, specifically the Plan itself, and then each HCE Rate Group. Can the Plan pass the Gateway test and the Ratio % test, but fail the Average Benefits Test and still pass all Non-Discrimination Testing requirements? What about the Plan passes the Gateway Test, Ratio % test, and Average Benefits Test, but one HCE Rate Group fails the Overall Ratio Test? Is this allowed? Thank You in advance.