K2retire

To me an annual match strongly suggests that the matching rate be set for the full year.

All of the automatic contribution arrangements that I've seen default the participant into pre-tax deferrals.

The amendment would end up reading something along the lines of "for the period January 1 through July 10 compensation excludes all bonuses and commissions. For the period of July 11 through December 31 compensation excludes some bonuses and commissions, but not all of them." Somehow that doesn't seem likely to be effective.

Your ability to control exactly when the money is credited after the transfer is probably not as precise as you seem to think.

Do you mean the plan sponsor is changing to a 501©(3)?

Client changed payroll companies midyear. In the transition, their excluded compensation did not get communicated correctly to the new payroll provider. As a result, the year end census (used to calculate the match) overstated compensation for a number of people. This was not discovered until after the match was deposited. Because of the impact that a correction will have on morale, the client is hoping to only correct those people who received more than $50 more than they should have received. However, 4 members of the plan's advisory committee who are involved in making this decision have asked that their accounts be corrected even though it would be less than $50. Two of them are HCEs, two are NHCEs. Some of the people with really small amounts, end up with significantly higher match percentages. There are HCEs and NHCEs in both the group that they propose to correct and the group the propose to not correct. I see lots of possible issues here. ACP passes with or without correction. I'm thinking of telling them the must correct for all the HCEs, regardless of amount, and for NHCEs whose percentage is more than some (as yet undetermined) amount higher than it should be. What is a reasonable de minimus amount for a situation like this, given that the error is in the participants' favor?

The other perplexity is the fundholder does not offset the loan from the total account balance when giving a 1099R; their reasoning is that if the loan is already out of the plan, there is nothing to offset. As this is a pretty large fundholder. I'm shocked. Are you suggesting that the amount should be deducted from the participant's account a second time?

What will they do if there is a year when they don't pay bonuses?

Most of the attorneys that we work with are already using prototype or volume submitter documents.

Since catch up is a personal, calendar year limit, it seems reasonable to assume it would not be prorated.

How are you able to meet the notice requirement within 45 days for a 2014 error at this point?

The percentage each participant receives depends on what they decide to allocate for the year. In the example above, it was 6.3%. If they want to change the formula, they need to make that change effective next year if anyone has already satisfied the 1000 requirement.

I'm accustomed to seeing the partnership as the plan sponsor and each doctor's corporation or LLC as an adopting employer in a single ASG.

For what it's worth I've never had the DOL ask about a missing or too small bond -- even on plans with lots of employees.

But many of them still do.

Does the loan policy say that the loan is due and payable on termination of employment?

If the withholdings do not match the election, the employer probably needs to make a QNEC. Did the participant elect a dollar amount, a percentage, or something vague like "the maximum including catch up"? If the election was for a specific dollar amount, and not adjusted by the participant as the limits increased, the employer may not need to do anything.

There cannot be allocation conditions on the SHNE so you should always have 100% coverage on the nonelective contributions. Since there are allocation conditions on the PS and one of your participants does not meet them, that person is not eligible for a PS contribution. You have not indicated if the allocation is cross tested, but the TPA saying the person must get a gateway contribution implies that it is. In that case, because the person received an employer contribution, they must receive at least the gateway percentage. Absent the required hours of service, however, they are not entitled to anything more than the required safe harbor and gateway contributions.

Remember that deferral changes and plan entry are not necessarily the same thing. This is something many plan sponsors don't understand.

Does the document allow for different contribution rates to the employees of the different companies?

Based on this description, Don is defining a rollover as only what I've heard of as an indirect or 60 day rollover and a transfer as what I've heard of as a direct rollover.

I agree that recordkeepers are better at it, and that plan sponsor's don't want to do it. However it is ultimately the plan sponsor who is on the line for the information. If they have changed recordkeepers, it is going to be incredibly difficult to produce the records.

No, we are not planning to advise him regarding the property settlement issues.

This is very helpful. Yes, the participant loses the ability to deduct the payment, but he also isn't paying the tax and 10% penalty on a hardship withdrawal. Hopefully the attorney fees for the DRO are less than the 10% hit. I was not aware of the rule that the transfer must be within 1 year of the divorce. That may kill this option.

The earlier thread was trying to restrict the participant to an IRA rollover. This attorney is saying that the law restricts the alternate payee to an IRA. That's exactly what I said! He is younger than 59 1/2.