K2retire

A rollover is not considered to be an allocation for 415 purposes. It seems logical that the same would be true for your purpose.

The example is an employee who elected a dollar amount per pay period. The attorney is saying that an employee who elects a percentage of pay must be stopped at the comp limit as suggested by My 2 Cents. In this case, the document does not limit deferrals beyond the 402(g) limit.

I am the TPA for an audit level plan that is making me question everything I thought I knew. And it seems to be a real comedy of errors. The plan sponsor's payroll company cut off employee deferrals when employees reached the compensation limit, even if they weren't up to the 402(g) limit yet. When an employee challenged this, we instructed them to restart the deferrals and that they would need to make a corrective contribution. The client figured a QNEC on their own and deposited it before the end of the year. The auditor is now requiring them to correct all prior years when this happened, before they will release the audit. They instructed that the 5500 be filed with a statement explaining why there was no audit attached. The client has since received a letter giving them 45 days to produce the audit. The client contacted an attorney for advice before filing the incomplete 5500. Although he says he has 30 years experience as an ERISA attorney and was a CPA who handled plan audits before that, he says he has never heard of allowing deferrals after the compensation limit has been reached. Question 1: Am I crazy, or is the attorney? He also advised that because of the QNEC deposit before the end of the year, the client has interpreted their plan provisions to be that the stopping of deferrals was wrong. To correct all the prior years requires a VCP filing. However, because the only people who are potentially due corrections are HCEs, he expects the government to deny the proposed correction. Back to the CPA, who wants to show receivables for all the prior years on the Schedule H. She also wants to show a negative receivable for the years that might not be deposited, if the attorney is correct. Question 2: Am I crazy, or is the accountant? Question 3: Is this likely to be the new level of "attention to detail" that is common from accountants as a result of DOL's recent communications about audit quality?

Unfortunately, I don't get to make the decisions about which document software we use.

So, if everyone is in their own group, do you have to specify who gets what in the resolution? That's the way it's done at the two TPA firms I've worked for.

That's impressive. I'd always heard that the would not make any recommendations one way or the other.

I think that applies to most providers.

Why not open a bank account in the name of the plan and make the distributions to the participants from there?

That is exactly what they want to do, but I didn't think it was possible. The document has a choice of yes or no for matching allocation conditions and I don't see an option to add a second match with different provisions, unless one is a safe harbor match.

Client is considering amending to add a fixed match with no allocation conditions, and adding a last day requirement to receive their discretionary match. This would not be a safe harbor match. They have asked if they could amend or remove the fixed match mid-year in the event that they have cash flow issues. Assuming they could pass benefits rights and features by making sure the HCEs don't front load their deferrals before such a change, would such an amendment be allowed?

Who is the beneficiary of the trust? Who is the trustee?

Perhaps it's a silly question, but if they each have a DB plan with similar benefits, why don't they negotiate to each keep their own plan?

The most common situation I've seen for a POA is a participant who is being deployed for military duty. In that situation, no one has ever questioned its validity. Why would this be any different, legally? (Morally it feels different, but I don't think that's a good reason for a fiduciary to act.)

Why are they waiting so long? The rule is that the contributions are supposed to be made sooner. The 12 month rule is similar to the 15th day of the following month for depositing deferral contributions -- it is intended as a maximum limit for extraordinary circumstances, not a routine practice.

Given the obvious controlled group, one plan is the logical solution.

I've lost track. Does the ASPPA reporting cycle end this year or next?

What is the distributable event?

And that's the scary part!

Thanks for that link!

The IRS and DOL regularly offer free web casts. Some record keepers do as well. The law school in our city holds a very inexpensive half day conference on employee benefits each year.

Business owner taking RMDs has scheduled automatic checks to come from the plan's record keeper. Business owner dies, 10 days later record keeper issues the annual check. Should the check be returned and reissued to the beneficiary, or deposited to the estate?

Terminating SH plans generally must give a 30 day notice before they can stop the SH contribution. This close to the end of the year, it probably doesn't make sense to terminate it early.

So, 7 1/2 years later, I'm being told by an attorney that he has never in 30 years of ERISA practice heard anyone take the position that deferrals could continue after reaching the 401(a)(17) limit -- unless the election was a flat dollar amount. He believes that the document defining compensation using 401(a)(17) means that a deferral election of a percentage of pay is limited to pay up to, but not exceeding, the compensation limit. Has anything more definitive been published in the intervening years?

I'm thinking about making a PDF of the e-mail from the CPA with this suggestion and attaching that.

I believe I have to attach something, but I haven't actually done it before, so I'm not certain.