Susan S.

Then I would have to quit my job. LOL

Thanks. Seems like Relius should pick this up from no ER contribution in plan specs.

Thanks! That is good news because it would be horrible to try to do in Relius.

I am working on a 401(k) plan in which the only ER contribution is a discretionary match. The match formula is the same for all participants and there are no requirements to get the match. The plan requires a 414(s) test due to the exclusion of bonuses. When I run the 414(s) test in Relius, it generates two reports: Report #1: 414(s) compensation for 410(b)-5 average benefit percentage test. Report #2: 414(s) compensation for nondiscrimination test under 401(a)(4). The only difference between the two is report #2 excludes terminees with less than 500 hours. Do I need report #2 since I don't have a profit sharing contribution?

Thank you very much! Not crossing plan years makes sense.

The employer's definition of compensation excludes bonuses, so a 414(s) test is required. The only employer contribution is a discretionary match. The ADP/ACP tests are on the prior year testing method. The compensation ratio test is satisfied when I compare the current year HCE's to current year NHCE's. Do I also need to run a compensation ratio test to compare the current year HCE's with the prior year NHCE's to be consistent with the prior year testing method?

Does anyone have an Excel spreadsheet formula for the excess life calculation?

The definition of compensation in a 401(k) plan I am working on is 3401(a) wages (subject to income tax withholding at the source), which excludes non-cash taxable income such as the value of excess life insurance. Is the excess life excludable only if it is imputed income? If the employer is including the amount of the premium as gross wages and then deducting the premium after-tax, is this regular cash compensation rather than excludable non-cash taxable income?

The IRS has requested a change to a good faith amendment. We have been asked to replace one word with another word. Do we prepare a correction to the current amendment, only including the requested change, or do we change the word and re-send the entire amendment, with the employer signing and dating as of the current date?

What is the current turnaround time for an IRS Letter of Determination upon plan termination (Form 5310)?

The plan document (Sungard) requires participating employers to give written approval for all amendments. This has not been done. Only the primary employer and trustee have been executing amendments. The plan has terminated and will be submitted for a letter of determination. How big of an issue will this be? Should some type of corrective action be taken in advance of the submission?