Earl

So does that mean that regardless of whether you are aggregating or disaggregating for coverage & nondiscrimination you can use the Otherwise Excludible options for ADP/ACP testing? Thanks

Is a refund paid in 2008 to correct a failed 2007 ADP test treated as an in-service distribution and added back for TH if the recipient is Key (as well as Highly). What about if the Participant only becomes a 10% owner mid 2008. Is the same refund added back? I think if you are Key you are Key for the year so it is added back as paid to a Key employee. (Plan is TH for 2009 with the refund, not TH without the refund) Thanks

So maybe he should be getting a K-1 with guarantee payments only and not a Schedule C (they told me he would be filing a Schedule C)? That kinda makes sense. Then he is 0% owner, non-key and NHCE as he is not in top 20% (elected)

That helps alot. Thanks. This guy was a W-2 employee and I am quite certain that he is only working for this firm now - still. So it seem an affiliated service group would be happening and I should get the guy to adopt as a participating employer.

I have a small law firm client that just made a guy a non-equity partner. All I can find is that he is treated as a self employed person (which coincides with what they are telling me that he will take draws). Is this guy a Key EE? Is he a 5% owner (of his own Schedule C?) making him a 5% owner and making it an affiliated service group somehow? Is this guy an HCE? I can't figure how he is an owner but if he is he would be HCE regardless of income, which was not that much last year, and not part of top 20%. Thanks for any comments.

Sorry that was supposed to be a joke. The client needs an attorney, not me. OK?

Thanks, but my Safe Harbor is fine. This client needs help, though, I'll grant you that. Have you had any experience with IRS trying to contact companies out of business and no mail forwarding? I have seen the process start a couple times for companies that I know I have the only usable records. I never heard anything...as if the IRS just gave up. Seem likely?

If a plan is properly Safe Harbor in 2008 and goes out of business in 2009 before the SH is funded where does the liability go? Stays with owners? Officers? Any idea on where to find any regs on this eventuality? Thank you

That sounds just like what I told him. Except I said dangerous instead of sticky.

Since we are talking about the owner, I am not really worried about what the plan says because I can change that in about 5 minutes. But there are those pesky regulations that continue to harrass me. Thanks again.

Thanks, so I guess there is no express prohibition and I was dreaming. Appreciate it.

Good summary of policy guidelines, know any regulatory guidelines on the issue? Thanks

I thought I remembered reading a requirement that stated if you have a loan in default you cannot get a new loan. I sure can't find it now that the situation has arisen. Anyone have any clues on this or am I imagining it? Thank you

A plan fails ADP in year 1. There is one HCE making $115k that defers the max and upsets the apple cart. For year 2 I want to have the plan adopt an administrative limit on HCEs. What would be the deadline to adopt? Can't find anything except Sal seems to say it can be during the year in talking about something else (catch up availabiltiy) I think it would have to be before the person defers in excess of what will be the limit for the year - otherwise it is a cutback. Sound right?

I have noticed a lot of letters for missing 5500s (as discussed in this post). I have noted that a lot of the letters I have gotten are for filings that were submitted in August 2006. I think there was an "event" at EBSA in August 2006 that has caused a lot of filings to go missing, mostly 12/31/05 filings but other year ends that were filed in that time period. Anyone else notice anything in that time frame?

I have lots of people eligible. The topic is about ADP/ACP testing using the otherwise excludible and early participation options. This does not keep them out of the Top Heavy test.

By not an issue I mean the % will be about 10%. Top Heavy is not an issue that I need to worry about, is what I meant. And ADP is an issue when top heavy is not because of the miracle of S-Corp payroll tax evasion. (But that is another thread...)

I am thinking that the eligibility requirements don't matter since, for testing, I can assume 21 & 12 - and entry dates that have been a subject of other threads. For sure plan does not actually require a year of service because then no one would be eligible. Under the otherwise excludible and early participation testing the NHCEs are not includible until 1/1/2010. So am going with a 2 year free pass. (And Top Heavy is not an issue in this case.) Thanks for the responses.

Thought this would have been discussed but I sure can't find anything. New Company starts a plan in 2008. I want to use Prior Year Testing and use the "Early Participation" rule and thereby exclude the otherwise excludibles but add back the HCE (owner). I think the test becomes void as the HCE is tested against no one. Pass. 2009 Prior year testing, I am again looking at a null set of NHCEs so year 2, the only HCE (Owner) is tested against nothing (rather than 0). Pass again 2010 Safe Harbor as there are actually a lot of employees and now they are in the regular test. Sound right?

As of 12/31/07, the val date for this year's RMD, there was no liquidity or valuation issue. Then, last month, the guy running the pool suicided and the regulators came in. Even if he were to get $0.25 on the $1 it would not be enough to satisfy the RMD so selling is not really an option to solve this. You have an odd sense of humor.

Guy has a PS Plan Trust and put almost all of the money in a Mortgage Pool. Pool is now in Chapter 11 and assets are frozen. He does not have enough accessable money to meet RMD. What to do? Only things I can think of are: 1. Take what cash he can, 1099 on full RMD, take rest of money when pool is unfrozen. (If it unfreezes at $0, amend the 1099 to the actual amount taken? But required amount didn't change...) 2. Take what cash he can, 1099 that amount. Thanks for any ideas on this.

yes it is. So, not just exempt from coverage but completely separate for the transition period. Thanks I appreciate your time responding.

So not until they actually merge. Thanks

This is a stock purchase of my client. The acquiring company will count all service once the plans merge. The buyer has HCEs, it is a large asset management company so lots of them. I am betting (but don't know) that when the companies merge none of my clients EEs will be HCEs if they use the Top Paid Group election. Thanks

I just mean that although you don't have to aggregate for coverage, but do you have to worry about prior year information of other company for HCE status. I am guessing no, but just questioning myself. I think it is only a 410(b) exemption so I was just wondering.