30Rock

Ok I get it! Thanks!

Does anyone have any additional comments to share?

The plan uses 6 months elapsed time for eligibility, This does not address the otherwise excludable issue. Thanks!

When determining the non-statutory otherwise excludable employee group, can you use the elapsed time method for computing the 1 year of service requirement? For example, a 401k plan has a 6 month eligiblity period using elapsed time. It is difficult for the employer to track hours. When determining the non-statutory group, instead of using 1000 hours, can you use elapsed time and age 21? Thanks!

The loan policy does not address other than to allow terminated employees to set h to ACH.

If a full time employee under a payroll deduction loan changes status to part time or temporary, it is likely he will default if his pay is less then the required quarterly repayments. Is the only remedy to default? And what about an employee who terminates and is then switched to ACH form of repayment - this employee is later rehired. Do the repayments have to continue as ACH or can he go back to payroll deduct? I am interested in any comments or experience with this. Thanks!

Voluntary after tax could blow the exemption. Need to review the DOL opinions.

Perfect! Thanks Tom!

If I have a QACA plan using a 2 year cliff vesting schedule, can I apply forfeitures to reduce the QACA matching contribution? I know the IRS position on not using forfeitures to fund vested contributions because the forfeitures are from non-vested amounts when a participant terminates employment. Thus for QNEC's and traditional safe harbor plans that require 100% vesting, you should not use forfeitures to fund the safe harbor (based on the terms of the document -ie some EGTRRA pre approved plans allowed this are are ok until the PPA document is used. Thanks for any insight!

The plan has to distribute the excess deferrals made during the 6 month hardship suspension. Under ERISA Outline Book, federal tax withholding under 3405 applies, but not the 20% mandatory withholding. So the 10% withholding would apply. My question is do we need to give the notice and election to the participant to elect our of 10% since this is not really a non-periodic payment, it is a corrective distribution. Thanks!

I think the EACA can implement for new hires mid year, but it loses the 6 month extension. Thanks!

Is an SAR required for a plan that has merged into another plan? Thanks!

My understanding of the final regulations is that after giving the automatic enrollment notice, the employee must have a reasonable period of time to elect not to participate (ie opt out) or to elect to participate at a different %. I have a client that wants to enforce automatic enrollment immediately, but then offer the 90 day permissible withdrawal option where they can ask for an undo so to speak of the amount. Is this permissible? I feel that it may violate wage withholding rules since you do not give them an opportunity to opt out. Thoughts?

Any other ideas about using forfeiture account to pay earnings on late or missed contributions?

Do you think forfeitures (which under the plan can be used to pay plan expenses and reduce future employer contributions) can be used to pay earnings under 2 scenarios - 1. late deferral deposits, 2. missed contributions - i.e. missed match. Can I use forfeitures to fund these earnings? Thanks!

Since the 15th fell on a Saturday, can Monday the 17th be used as the deadline for issuing refunds? Thanks!

Is anyone advising plan sponsors of this IRS form to report change in plan sponsor, address, EIN, such as when a plan merges? I have plans that merged in 2012 and 2013 and I assume to be safe the sponsor should file this form? Form 5500 has the information but the DOL gets this, not IRS. Any comments would be appreciated! 8822b.pdf

Thank you for this cite and finding Dismissal payments. I think it is a gray area!

I can show you a pre-approved volume submitter where you have to exclude severance pay if paid before termination of employment, and if you do not exclude it in the plan, then it is plan compensation. I was very surprised to see this. I think the original statement from K2 Retire said the IRS messed it up. I see another plan document that excludes severance pay on a "post severance" basis.

The original question is - is severance pay paid before an employee's termination date included in 415 compensation? I have seen a pre-approved document take this position, and then exclude this pre-termination of employment severance pay from plan compensation.

You first start with 415 compensation. Then you document can define plan compensation - however you could never include in plan compensation what is not allowed as 415 compensation. So I do not think you really answered the question either.

Well that was not my question - I understand only too well the 415 post severance rules. I am talking specifically about payment to leave the company where the company says please leave, we no longer want your services and here is $80,000 of severance pay on your last day of employment along with your final regular paycheck. Now can they defer on this $80,000 severance pay and include it in ADP testing, and receive match and nonelective? It is not post severance severance pay but it is severance pay paid on the last day before they actually terminate and walk out the door!! Any one else have comments??

So is it up to practitioner discretion?

How is severance pay handled under 415 regulations and for purposes of plan compensation if it is paid before the employee officially terminates? I have recently seen a pre-approved document that allows severance pay if paid prior to the time the employee terminates, for example on his last day, CAN be included unless the plan excludes it? I was under the impression that ANY severance pay was not plan compensation eligible? Any thoughts!

Participant deferred $7000 over the 402g limit last year 2013. She terminated and rolled her account over to an IRA. Not sure why recordkeeper did not monitor this excess but in any event, what is the procedure for recordkeeper and plan at this point? Issue participant a letter notifying her of excess and that she should contact IRA to take it out. Is there an April 1 deadline? Do the double taxation rules apply if not distributed from the IRA by 4/15? Thanks for any help!