jkharvey

What will be IRS action if governmental plan did not timely amend for 401(a)(17) and 401(a)(31). Amendments were due 12/31/1996 and were not made until plan updated for GUST.

I need to know the deadlines for amending plans to comply with these two law changes. I know they go way back and I can't find my old stuff. OBRA 93 change for rollovers and 401(a)(17) reduction to 150,000.

Plan allows two classes of employees to make one-time elections to defer specified percentages into the Plan. These amounts are made on a salary-reduction basis. Does the Plan have to offer this to all participants? Is this election a BRF and must pass coverage to be nondiscriminatory?

I finally got it to work.

Has anyone successfully imported a file from Hartford? I haven't been able to get it to work and think I'm not using the right file. If you have done it, what file from Hartford should I be using?

Here are the facts. A and B are employers and are members of a controlled group. Participant terminates with A to work for B. I know that this is not a "distributable event" and the participant is not able to take a distribution from the Plan. What the Participant would like to do, however, is move his money from Plan A to Plan B. Is there some way to do this?

So you are telling me that in the case of this match situation I don't need to test for BRF at all. Just the usual 410(b) and 401(m)?

Employer has two matching "levels". One group of employees receives no match while the remaining employees receive match of 100% of deferrals up to 4% of comp. My first thought was to test this for coverage using the theory that these are separate "tiers" of matching and would need b/r/f testing. In this case, 17 of 19 HCEs are in the group that receive no match. I easily pass 70% for the zero match and the 100% match. The more I think about this however, I'm not sure this is correct. If the other two HCEs were in this group such that no HCEs benefited from a match and fewer of the NHCEs were in this "no match" group (moved to the receive a match group), they would fail ratio percentage test. If they go on and pass nondiscriminatory classification test, I should be ok, right? If for some reason, they fail this test, would I have a situation where the Plan design is not qualified? Doesn't seem right since the situation is one in which all the HCEs are receiving the zero match. There are other NHCEs also, however, who don't receive a match. Maybe I'm overthinking this and getting myself confused.

I was afraid of that...lol. What do we tell client?

I have searched this board and found some discussion but no definitive answer. When MPPP is merged into 401k PSP are the MPPP amounts 100% vested?

Thank you very much for your help.

Terminating plan has small amount invested in limited partnership and gold coins. Trustee wants to offer all participants a chance to take part of their distribution "in kind". In other words he wants all participants to have a chance to receive some of the lp and coins and not look like they were distributed to HCE only. Does anyone have a letter to participants that gives this option?

Would all members of the group (adopting ERS) need to sign a certificate of intent to adopt for GUST or can it be signed by the Main sponsor only?

A client of ours is telling us that loan payments made through payroll deduction are made "pretax" just like a 401k deferral. The client has said that she "researched" the issue and we are asking for her research but I wanted to know if anyone else has heard of this.

One of the adopting employers in a controlled group wants to discontinue as such. Is this the equivalent of a termination for that adopting ER? Can the participants (401k and match money) receive distributions?

Currently we are doing what you guys are with the American Funds .csv files. It would just be much nicer if we could make a few minor manipulations and use allocated link. When I spoke w/ Corbel about it I was told that American Funds would have to request to have their files added to the allocated link and I think he said something about a fee involved. From my experience w/ American Funds I don't see that happening any time soon. Not my favorite Fund Family.

I have a question for those who import investment account data using Allocated Link. We have a lot of clients who have investments at American Funds. Currently, however, American Funds is not one of the investment companies that is available on the Allocated Link function. Someone at Corbel suggested that we might be able to import the American Funds investment file using another investment company's format in the Allocated Link. Has anyone tried this? If so, how did you do it?

The plan provides for ER Match of 100% of deferrals up to 5% of compensation. This HCE has compensation of 350,000 in 2003. He made the maximum elective deferral plus cach-up for a total of 14,000. 5% of 350,000 would allow for a match of 14,000. The 401(a)(17) limit on compensation (200,000) only provides for a match of 10,000. I don't see any mention of the 401(a)(17) limit in the regulations for 414(v) so I'm saying that the 200,000 comp limit comes into play and prevents a full match on the 14,000. Am I correct? Any thoughts?

I've read some of the posts on this topic, but I need to clarify one point. The plan excludes commissions from compensation. In our Plan's case this makes the def. of comp. discriminatory, so I know we have to use General Test for compliance w/ 401(a)(4). My question is this, in determining how much 3% safe harbor contribution a participant gets, can the discriminatory definition of comp be used? Would we have to give 3% on compensation that meets 414(s)? Thanks

I know that Relius will test separately for those HCEs and NHCEs who have not yet met the statutory minimum age and service conditions if a plan provides for more generous entry provisions. How would we get Relius to exclude only those NHCEs who have not met statutory minimums? 401(k)(3)(F).

If a client filed the F5500 a year late can we still submit to DFVC for waiver of IRS penalty? We haven't received any notice from DOL as of yet. The IRS has sent a request for payment of $8775 for the penalty. Client didn't contact us before submitting the 5500 after he realized he hadn't filed it yet.

Does anyone use this part of the Relius Administration System? If so, to what extent to you use it?

Thank you so much. I never even thought to look under the "employer" section. I will have the administrator try it and let you know if it works.

I know I'm just not seeing it, but if the ER has made the top paid group election for determining HCE status, how do I get Quantech to use this when running ADP/ACP test?

What a timely question. I have a very similar issue. Any suggestions on this one? The ER made the 401k deposits timely. The ER match was computed using a formula that was the ER's usual formula from prior years (25% of deferrals). The ER did not actually deposit this full amount by 12/31/2001 (2001 PYE). The valuation was prepared using this formula and a receivable was set up for the difference. The ER was eventualy bought out by a larger company and the plan was then terminated in 2002. The ER never put in the additional match contr. for 2001. The only match contributions made for 2001 were amounts made directly to some of the individual segregated accounts during 2001. These amounts, for the most part, were the 25% of deferrals and were made at the same time that the deferrals were deposited. The overall ER match, therefore, is not the same percentage of deferrals for each participant. ADP and ACP tests are met if only the actual match deposited in 2001 is considered. I don't see how an ER match that isn't deposited until more than 2 years later can be considered an allocation for 2001. Outside of the income tax deduction issue, what are the problems involved w/ leaving the allocation of the match contributions as they were actually made? Does this make sense? I have considered the alternative of taking the entire amount that was deposited and reallocating to all participants as a discretionary match based on elective deferrals to total elective deferrals. Problem here is that since the $$ went into segregated accounts, some people would need to have money removed from their accounts and have it given to other accounts. Thanks