30Rock

What are the fund change notification requirements for a plan not subject to DOL ERISA rules? Is it a matter of state law? Thanks!

I think the issue at hand is whether we can use disaggregation in order to Pass ADP and ACP. If we can use it, then the plan passes nondiscrimination. So QNEC's and one to one correction are not relevant. Thoughts?

If running ADP and ACP test after the 12 month period - testing is being done now for the 2014 plan year, can the disaggregation method for otherwise excludable employees still be used? Thanks!

Document has not been drafted, just trying to consider all options.

If a plan with a safe harbor match and 100% vesting and no other sources, merges into a plan with a discretionary non-elective and tiered non-safe harbor match which both have a 3 year cliff vesting schedule, can the 3 year cliff apply to participants in the safe harbor plan that merges? Or does their 100% vesting have to carry into the merged plan? I think that the new non-safe harbor sources do not have to be 100% vested. Any thoughts?

I did ask, but as long as the participant is still employed and has an account balance, then a second loan is allowed. I assume the 2nd (not the 1st) will be paid via ACH.

We have a participant who took loan 1 out and then went on a leave of absence which has continued beyond 12 months. Before the first loan defaulted, she took a second loan during her same leave. Does the 12 month loan suspension for leave of absence start as of the date of the original leave, or can it start as of the date she took the second loan because she has not returned from the leave? I assume it is one bona fide leave, but just wanted to check! Thanks!

I have a sponsor that wishes to merge their money purchase plan into their 401k plan as of 8/31. There is time for the 204(h) notice to get distributed. However the money purchase plan has a 1000 hour allocation requirement which most participants will likely meet by the merger. So when the plans merge, will the 8/31 balance be subject to QJSA and other money purchase plan protections but the future contributions (which will be identical but as profit sharing contributions in the 401k) will not be subject to the money purchase requirements? Thoughts?

No we do not use fail safe and that would only apply to allocation conditions. This is an eligibility exclusion failure. I think probably bumping up the NHCE's benefit is the easiest route to pass ABT. But who do you bump up?

I have a safe harbor plan with an enhanced match of 100% up to 4% of deferrals. The plan excluded too many on-call employees last year and failed both Ratio Percentage Test and Average Benefits Test under 410(b) for deferrals and safe harbor match. How do you correct - an 11(g) retroactive amendment to bring in some of the on-call employees - 1. how do you determine which ones to bring in and 2. what is the corrective contribution for the missed deferral?

Technically it is not a short plan year. The 415 regulations state I have a short limitation year when the plan terminates so I know I have to pro-rate the 415 limit. But since I am not amending the plan to a short plan year I do not have to pro-rate the 401(a)(17) compensation limit. So I was wondering what TPA's do in terms of testing compensation.

I should have said use the date that all plan assets are distributed and if this is less than 12 months, then does the compensation limit get pro-rated?

When a 401k plan terminates mid year, I know this creates a short limitation year and the 415 limit is pro-rated. However what happens to the compensation limit for allocation purposes and ADP and ACP testing? Do you use partial year compensation, full year or compensation up to the date the 5500 is filed? Thanks!

If a participant enters the plan but receives no compensation because the first payroll date has not occurred yet in December, do they count against you in the 401(a)(4) test for purposes of the gateway? I would think $0 compensation would be a $0 contribution and thus not impact the test. Any thoughts?

Would a hardship distribution request to "build" a house qualify? Thanks!

Thank you!

I also posted this in the 125 topic but have not gotten a response. Hoping to get some guidance. I see in the 125 regulations that deferred compensation under a 401k plan can be a qualified benefit in a cafeteria plan. I think the issue is if the cafeterial plan has flex employer dollars available, and the employee has an election to receive the cash as taxable income or defer it under the 401k plan, how do we do this? Is it a matter of providing this benefit in the 125 plan document and then giving the employee a 125 deferral election form and a 401k election form?

Hoping to get some guidance. I see in the 125 regulations that deferred compensation under a 401k plan can be a qualified benefit in a cafeteria plan. I think the issue is if the cafeterial plan has flex employer dollars available, and the employee has an election to receive the cash as taxable income or defer it under the 401k plan, how do we do this? Is it a matter of providing this benefit in the 125 plan document and then giving the employee a 125 deferral election form and a 401k election form? thanks!

Hi - I have not been able to find any source that affirmatively states that make up 401k deferrals for the period of military service must come from current year compensation. So for example - employee is on military duty in 2012 and 2013 and returns in 2014, He would like to make up $50,000. So his compensation for 2014 will be $40,000. Can he submit a check for $50,000 OR does the $50,000 have to come from current compensation, which in effect will equate to 100% of compensation and he can only defer $40,000. I have heard there was a technical correction to USERRA that requires the missed deferrals come from current compensation - so that the employer is not on the hook for huge amounts of match from prior years. Any help would be great!!

Thanks. That is why I am asking!

When they change status and their paycheck is decreased, what do you do? I assume they will default.

Yes I do have EOB and it does not specify the options. Thanks!

If an employee changes status to part time and has an outstanding loan, is there any rule concerning the loan repayment exceeding a certain percentage of the employee's salary? I would think if there is such a state law that it would be pre-empted by ERISA, but the advisor thinks is could be an issue. Any thoughts are appreciated!

I have a plan that missed a group of employee's deferrals. They have now deposit the missed deferrals - the principal amount. Is there a deadline to deposit the earnings? I know that earnings must be calculated and contributed on the late deposit, but don't earnings continue to accrue on earnings until the final payment is made? Thanks!

Unfortunately, I am back. A colleague has forwarded this link to me from 2008 http:// benefitslink .com/boards/index.php?/topic/38793-determination-of-otherwise-escludable-emplyees-oees/