Lou S.

Looks like you just miss the safe harbor exception under 1.401(a)(4)-2(b)(2). If they got 1/52nd per week worked you'd be OK but doesn't look like 1/12th month satisfies the safe harbor exepction on uniform dollar allocation per unit of work. Still though I'm having a hard time imaging a scenario where your alloction would not pass testing on an allocation basis. edit - as a followup if only the new hires are a concern, couldn't you just test separately as all your new hires would prsumably be NHCEs unsless they were owners.

It's been a long while since we were in teh FSA business but IIRC the FICA tax savings alone generally more than paid for overspent ee accounts and administrative expenses. The unused balances were typically rare in the smallish plans we did administer and back then someone used to just buy a bunch of over the counter meds, glasses or contact lense solution if they weren't going use it all. I think someone once got creative and bough a bunch of condoms and ran it though as birth control to zero out the account. Though I realize some of that can no longer be run through the FSA. I have little sympathy for people who over estimate and then complain about the small forfieture even though as other have pointed out they are are propably already ahead when figuring in tax savings. Though I wish they would bring back the old ZEBRA accounts, now that was a tax benfit plan. Though with the current debt/deficeit those aren't likely to ever make a comeback in congress.

This is the 2nd thread on the same topic. I gave an answer in the other thread that someone else agreed with that since the excess deferral is NOT ELIGIBLE FOR ROLLOVER, it should not be restored. I just thought ERISAtoolkit had a very interesting idea that I thought might be helpful in the future. Though if I remember correctly I think I found the same thing our document the last time this came up so even if you can do what EtK is suggesting is possible, we might not be able to do it our plans anyway.

I like that idea and have always thought it was how it should be but I've never been able to find anything in the code or regs to support it. Do you happen to have a cite to support that because prospectively I'd love to be able to take that position.

Can you correct with retro active amendment lowering in-service requirement to age 62 or 63?

My understand is the gateway applies to any employee who receives any (non-match) employer allocation. So participants who might have to be counted for other purposes such as 410(b) can be excluded from the gateway if they receive $0.00 allocation of employer contributions or reallocated forfeitures.

I don't see any legal IRS problems with what you are trying to do with respect to limits or what is allowable. Just make sure the refinance doesn't extend beying the original 5 year period. You also need to make sure your loan program allows for it. As for paying with IRA assets via direct transfer, that would be a rollover in, not as a lump-sum loan payment.

No. The $786 was not eligible for rollover in the first place.

You would no longer have a uniform allocation in your PS plan which would persumably blow the written terms of your plan document.

Tom he was silent on the ADP. It is funny you assumed that meant it passed, I assumed that meant it failed. Intersting theoretical side questions on the refund of excess aggregate contributions under this fact pattern. 1. What if the match is descretionary and they later decide, opps we can't afford it no match for this year. What happens if you already made refunds in anticipaton of the ACP failure based on the assumed match? 2. What if this is daily valued and tracked by partictpant and source in individual accounts. Assume that one or more HCEs who have this recievable match, that this represents 100% of their matching account? Can you cut the check from their deferral account? Or do you need to wait until they have an actual matching account exists with the deposit before due date of tax reurn but after 2.5 month window for refunds w/o 10% penalty?

I agree with you. Part should be eligible 1/1/12 under your facts and cirumstances.

If the funds are available for in-service distribution, they are are available for in-plan conversion. At least that's how I understand it.

Well since no one else is chimming in I'll take a stab. Mind you I don't work with 403(b) but rather 401(k) so if the rules are different here I apologize. From the IRS fix it guide on 401(k) plans (near their EPCRS link) it sounds like you have a definition of compensation failure. You can check out this link for more info http://www.irs.gov/pub/irs-tege/401k_mistakes.pdf#page=2. Now you may not like the conclusion but in this case the IRS suggested fix seems to be to make an additional contribution on behalf of the affected participants (with interest) and not recoup it from the participants. I don't necessarily agree that this right thing to do as it seems like a windfall for the employees but generally the IRS fix is almost always in favor of the employee over the employer when there is some error.

Seems like they want their cake and eat it too, no? I think if you are allocation fees on any basis other than purely per capita, purely pro-rata or a comination of some fees pro-rata and other fee per capita, then you are making a fiduciary decision that you better be able to back up with some solid reasoning. I personally would be uncomfortable with such an arrangement, especially if the bulk of the rollover dollars were from owners and or HCEs but I am not a lawyer.

Tell them you have no record of them being a client since 1986. If an attorney does come, I would probably notify by E/O insurance but I can't see anything beyond defending against a nuisance claim based on what you are saying. Who did his TRA 86 restatement, GUST & EGTRRA as well as the host of other amendments. Were none done since the plan was set up in 1986? If that's ture sounds like the guys got off cheap with the IRS.

I agree with 12ax7, no CG here. Unless you have ASG or family attribution issues then owners 3, 4 and 5 are not key in by virtue of the more than 5% or more than 1%/comp so unless they are key by officer/comp they are not key in the determination.

Issue a maybe notice and if the reorganazation goes through be subject to testing, if it doesn't you can be safe harbor for 2012. That's one option that may work for you.

Sure. But it would be a fiduciary decision by the trustee to pick your investment. If you are talking about a plan that offers participant choice, then I think you would have to offer all investments to everyone or risk BRF testing. Though not sure why a plan would offer a window of target date funds and restrict access to some by age.

Or a call from an angry lawyer who thinks ERISA is pretty name for a girl but hasn't heard it is actually a nearly 40 year old piece of legislation.

Tom, his question wasn't about in plan conversions though which are clearly optional. But thanks for the info on safe-harbor plans not being allowed to add mid-year. Though I really think the IRS has gone off the deepend with restrictions on changes to safe-harbor plans, though that is a whole seperate issue. It is specifically about allowing a direct rollover of an eligible rollover distribution from a qualified plan to a ROTH-IRA, even if the funds being rolled over are pre-tax.

I'm not sure if it is required but our PPA amendment from a large national document provider contained the following provision - If they included it, my quess is the IRS was requiring it.

Are you talking about the "In Plan Roth Conversion Option" from last year? If so, you have until 12/31/2011 to formally adopt such amendments retroactive to when you added the feature, presumably in 2010. We are going thought that right now with the plans that added it last year.

No because you have an increasing discretionary match which would be described 0% of the 1st 4% PLUS 100% from 4 - 9% That doesn't satisfy the safe harbor match rules.

The owners of Company A also own 100% of Company B, so they are a related employer. But does that automatically mean they must be covered by Company A's plan? Perhaps they arent required to be covered and the eligibility question isn't applicable. Company A's Plan does not have to cover the employees of Company B. But Copmany A's plan will need to pass testing with considering Company B's employees as non-benefiting since it is a controlled group if it doesn't cover the employees.

The IRS will presume the termination is involuntary, possibly leading to a partial termination, but the sponsor has the ability to refute that presumption. Good point. This is true assuming the sponsor has good records that the employee did in fact leave voluntarily. However if they have been showing he employee on PBGC premiums and paying them 2 years after the employee left, then my presumtion is the client doesn't have very good records. Though I fully admit this could be a faulty assumption on my part.