JBones

Restructuring is prohibited in ADP testing, but if a controlled group exists and there are 2 separate plans within the controlled group, can each plan be tested separately assuming each passes 410(b), or are both required to be aggregated for ADP purposes?

Got it. That's what I thought. In this case, one plan fails coverage, so I'm going to have to look at ABPT or end up aggregating them for coverage and ADP. I appreciate the help.

Thanks Tom. Just to confirm, if I am not permissively aggregating, is each plan required to include all employees of the employer in the denominator of the ratio % test or can I run that test only taking into account the employees of each plan?

I have read the regs and several posts on this board, but I seem to be just confusing myself more, so, at the risk of asking a stupid question, I thought I'd ask a stupid question: If an employer has 2 401(k) plans and there is no overlap of employees between the plans, can they automatically test each plan separately, or does each plan need to pass 410(b) coverage testing on its own (considering all employees of the employer in the test) in order to test each plan on its own? I would think that each plan needs to pass 410(b) on its own, but these posts make me think otherwise: http://benefitslink.com/boards/index.php?/topic/55126-brain-cramp-controlled-group-mandatory-aggregation/?hl=disaggregate#entry240106 http://benefitslink.com/boards/index.php?/topic/54601-adpcoverage-testing-for-control-group/?hl=disaggregate

A cash balance plan has made in-service distributions to participants in the past. They are now amending actuarial equivalence. In addition, they are amending the plan's hypothetical contribution credits to bring certain participants to their maximum benefits under 415. When considering the distributions previously made, are we allowed to revalue the benefit based on the new actuarial equivalence? Also, when adjusting the payment from the age that it was paid to the present, should the adjustment be made using the interest crediting rate or the post retirement interest rate?

How is the following situation corrected: A controlled group between 2 companies. 2013 is the first year after the transition period and both companies need to be considered together. Company A has a safe harbor 3% nonelective plan with with SH going to all employees (not just NHCEs). Company B has a 401(k) only plan subject to ADP testing with no employer contributions. The plan's do not pass 410(b) separately. Since they don't pass 410(b), I can't split them into 1 safe harbor group and 1 group that is tested. How is this corrected? Am I stuck providing the 3% SH contribution to all employees of Company A but still being subject to ADP testing?

So, Mr. Jbones, if you agree with ScottR, then wouldn't you include this contribution when conducting your $250,000 condition assessment of whether or not a form should be filed? I suppose that if you agree that it must be included, then the assets exceed $250,000 and you're forced to file, if you don't agree, then the assets are below $250,000 and next year would be the first filing.

I know this is a 5500 question and I asked it on that board, but need an answer quickly and haven't gotten it there. Assuming all the other requirements are met, when determining whether or not a plan has to file a Form 5500EZ due to having assets under $250,000, is that number based on the actual assets at 12/31/2010 or does it include accrued contributions for the year. Example, plan has $225,000 in assets at 12/31/2010 and contributes $30,000 during 2011 for the 2010 plan year. EOY cash basis assets = $225,000, EOY accrual basis assets = $255,000. Is this plan required to file?

Assuming all the other requirements are met, when determining whether or not a plan has to file a Form 5500EZ due to having assets under $250,000, is that number based on the actual assets at 12/31/2010 or does it include accrued contributions for the year. Example, plan has $225,000 in assets at 12/31/2010 and contributes $30,000 during 2011 for the 2010 plan year. EOY cash basis assets = $225,000, EOY accrual basis assets = $255,000. Is this plan required to file?

I'm curious how others approach this issue in their own practice. What do others require their clients to provide in order to certify and does it depend on who the client is, i.e. actuaries doing third party work for other adminstrators vs. working directly with the plan sponsor. Am I correct that the Joint Board or the Actuarial Standards Board do not have a standard for this?

I have requested from the client, but they have always been very nonresponsive. I don't plan to sign a thing until the client provides the information. What I want is to be able to show the advisor that I'm not just being picky, but that there is in fact a standard to be followed, but it sounds from the conversation string that there is no specific standard. In any event, I've made it clear that I won't sign until the client provides the info.

An advisor that I work with has provided an email listing the date and amount of contributions for a client. He's not the investment advisor, but more of a business advisor. I asked him for either a signed confirmation from the client listing the dates and amounts, or a copy of the checks or bank statements. He is arguing that what he has provided should be good enough to certify the SB. Is there something that I can point him to that states what documentation an actuary should require in order to certify an SB and AFTAP (it's a 1/31 year end so AFTAP isn't late yet)? Thanks.

Makes sense to me. Thanks.

Thanks. I thought that would be the case. Just to play devil's advocate, what if the reason that the plan didn't pass 401(a)(26) is because a group was excluded, but that entire group consisted of HCE's and the only way to pass would be to add HCE's to the plan?

A CB/PS combo plan that uses a carveout is not passing 401(a)(26) due to a number of terminations during the year (all above 500 hours). I am preparing a corrective amendment adding 3 particpants for the plan year to bring DB participation up to 40% of nonexcludables. The 3 participants that the sponsor wants to include are all HCE's. After the amendment, the plan will pass 401(a)(26), 410(b) and 401(a)(26), but I am just leary about benefitting HCE's only in the corrective. Is this allowed?