30Rock

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/

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.