K2retire

One of our clients calculates how much their people are missing for this reason and contributes that to the nonqualified plan on their behalf.

This is the reason for a fidelity bond. The bonding company may take responsibility for pursuing the embezzler.

In general, the higher-paid employees would be relatively unlikely to seek out a usurious loan from the plan, leaving the 12% rate primarily applying to those non-HCEs desperate enough to take out a plan loan (or otherwise discourage them from trying to do so). Figure that the higher-paid can qualify for reasonably priced commercial loans but the lower paid might not be able to. So the unfavorable rate would probably have the greatest adverse impact on non-highly compensated employees. If the non-HCEs are overcharged for borrowing from their accounts, wouldn't that, by itself, be problematic? Actually, when I owned my own business I would have LOVED to take out a loan at 12% -- especially in 2007 or 2008. Is 12% really over charging compared to the rates a participant might have been paying on their credit card debt?

When we have corrected for similar issues, the forfeitures had to be allocated in the year when they occurred to the employees at that time.

Salary can vary significantly based on experience and geography.

You are forgetting that record keepers are notorious for making and following their own rules that don't necessarily conform to the regulations or the instructions of the trustee/Plan Administrator.

Is the brother also the beneficiary under the plan? That could change the options as well.

In similar situations we've taken the position that once Corporation B is no longer a participating employer, all of their employees are considered terminated from the plan. (or at least from the plan sponsor)

I was trained that a deposit made before the actual paycheck date was considered to be an employer discretionary contribution, not deferrals.

Was the terminated participant a business owner?

That exception is only for distributions from IRAs, not 401(k)s. So it wouldn't have made a difference in your tax bill.

Are they paid as W-2 employees or 1099-MISC contractors?

Logic in government rules -- are you serious? As a stepmother for 32 years, I find the kids' belief that they are entitled to the plan balance rather than the wife annoying. If their father intended for them to get it, he would/should have completed a beneficiary designation indicating that and including the wife's consent.

The change of ownership is from Plan A to Plan B.

I've used both Relius and FT William at different jobs. FT William has much better customer service. Their document seems to me to be organized less logically than the Relius document.

I have similar concerns. According to a large record keeper that we work with, the standard eligibility provisions of 1000 HOS in the first anniversary year, switching to plan year after that, is something they cannot track. If they are tracking plan year vesting, their system automatically resets to zero on the first day of each plan year and they do not have a way to determine if the participant reached the 1000 HOS threshold unless it is reached in a plan year.

Our firm will end up with 27 pay periods in 2016. All salaried employees were notified in mid-December that our paychecks would be adjusted accordingly starting 1-1-2016. Of course, since that was a holiday, the paychecks were delayed until 1-4. You gotta love working for penny pinchers!

That is correct.

Most likely the people negotiating the contract were oblivious to the ERISA requirements. Could you require the weekly or monthly hours until such time as the participant reaches 1000 hours, then include them retroactively for the year? It would be an operational nightmare, but if someone terminated before reaching 1000 hours, it could have the desired impact.

The note from my mom would undoubtedly include a reference to the fact that our entire industry is focused on what she describes as "pernicious minutia".

Based on our experience with one particular firm this, I'd love to use one of your quotes. I'll probably be over ruled, however. By the way, as a result of this firm's actions the client just filed their 5500 for the year ended 12/31/2014 today.

But only for the logical! The attorney who told me that it could not be done referred to the plan document's definition of compensation, which clearly says it is limited by 401(a)17. A deferral election based on a percentage of compensation, defined as the 401(a)17 limit would stop once that limit was reached according to him.

We like to include them in the Other Fees, but some audit level plans have CPAs who insist on including them in the distribution amounts.

Perhaps because they are not aware that they could do something like BG suggests?

You have to get through the gateway before you can do component plans or cross testing.