EBDI

A client has a safe harbor match with a profit share contribution. They hired someone new to upload contributions in 2012 who did not do a good job. Most participants had the wrong amount of match uploaded. We are correcting them. Two participants who had too much deposited into their account have already withdrawn their funds. They will get a profit share contribution. Can the correction for the erroneous amounts of safe harbor match be deducted from their profit share contribution? One participant had loan payments continue to be made by the company after he had left and was no longer receiving compensation. Can the company take back the amount of loan payments from the profit share contribution?

By "has met" I mean going forward now. Sorry I used the wrong tense. He didn't meet the 1000 hours requirement in 2005 to 2007. After reading the section on rehire and the 5 year break in service rules, I believe we will use the new rehire date of 4/8 for his anniversary. Thanks for the responses.

Why don't they get set up to do it electronically? That would be better than being late with remitting the withholding.

This plan's eligiblity is 1000 hours, age 21, 1 YOS. The Eligibility Computation Period uses the Hours of Service Method, a 12 consecutive month period beginning with an Employee's Employment Commencement Date and each anniversary thereof. It does not switch to the plan year as do all of my other plans. An employee is hired 6/1/2005, terminates 6/1/2007. He never works 1000 hours and does not enter the plan. He rehires on 4/8/2011. What do I use for his anniversary date to determine if he has met the 1000 hour requirement? His original hire date of 6/1 or the most recent hire date of 4/8?

I have a similar question. This plan has immediate entry and the only requirement is age 19. One participant was reported as age 19 when in fact she was 15. A profit share contribution was made for her for the 2011 plan year. I think an amendment allowing her to enter the plan would correct the problem. Others feel that because she is so young, the funds should be forfeited. The plan document does not have any guidance. Anyone have an opinion?

I agree with the other users. I always get 2 email notices from ftwilliam. One email says that it was submitted and the other that it was accepted. If you ever have any questions about their system, contact them. They are very quick in their responses.

I do not believe the amount that is recharacterized counts against the 2012 deferral and catch up limits. Those are on a calendar year basis.

Thank you for the quick answer!

I had trouble with FT William for about 40 minutes on 10/15 and then it was fixed. Everything went through fine.

The ADP test for a plan year that ends on 6/30/12 failed. One of the HCE's reaches age 50 three months after the plan year end (Sept. 2012). Can the excess deferral for this HCE be recharacterized as catch up even though he turns 50 after the plan year ends? He has only deferred $7,700 for the plan year.

I also ran into this issue recently. It took months to get the funds transferred and no one would take deposits during that time. It wasn't a good situation.

We have a new client starting their first 401k plan. They have payroll twice a month, but the employer only wants to allow employees to defer from the last payroll of the month. I have been searching for IRS guidance on this and have struck out. Can anyone point me in the right direction? I also checked the plan document and can't find where it is addressed. My feeling is that they should have to allow employees to defer from every pay check.

If you don't get a reply here, you can ask FT William to put you in contact with a client who switched from Relius admin. We used Relius for the 5500 only and switched to FT William without any problems. We didn't use Relius for admin.

We switched from using excel to ftWilliams for admin testing a few years ago. I have been very happy with it. Great customer service. I have found only one thing it wouldn't do for me. I had a plan where an employee became an owner mid year. It couldn't handle the calculation of w-2 employee for part of the year and and self employed for the rest of the year. That doesn't happen often, so I wasn't surprised it couldn't handle the calculation.

Can an employer deduct $5 per payroll from the participant for handling loan repayments to the retirement plan? I haven't ever had a client ask to do this and I am not finding much online. My gut says no...

Thanks for the advice Tom. I meant testing otherwise excludables separately.

This plan is tested using the prior year method. It passes the ADP test without disaggregating. We have always disaggregated in the past. Can I disaggregate even though it passes without dissagregation? It would result in better results if I disaggregate.

Sorry about the voluntary benefit plan. I didn't notice it until after I posted. The integrated profit share contribution is 14% plus 5.4% of 80% of the SSTWB. It looks like I will have to bump the terminated participant up to 5% gateway. Thanks for the advice.

Client has a safe harbor non elective contribution and an integrated profit share contribution with a last day provision. There is 1 HCE and 2 NHCE's. All 3 received 3% non elective. One NHCE terminated and does not get a profit share contribution. She worked over 500 hours. When calculating the ratio test, are both NHCE's counted as benefiting since they received the safe harbor contribution? Is there further testing that needs to be done since the two NHCE's received different contribution rates?

I hate to be the lone wolf who disagrees. The participant satisfied the 12 month requirement on 3/20/2011. The 1000 hour requirement was satisfied by 9/30/2011, therefore the participant enters on the next entry date which is 10/01/2011. Is there something in the plan document that indicates the participant has to satisfy the 12 month requirement more than once?

Tom, I love reading your lyrics. You have a talent for writing great lyrics! I am also glad we switched from Relius to ft Williams. I uploaded my first client to FIRE last week and I am still waiting for an email saying it is approved. Does it take awhile for the email? I checked my SPAM filter too.

I am curious if you ever found an answer to this question as I am facing a similiar situation.

I am working on a case right now that has lost earnings and is with American Funds. This is how they advised me to handle it: "The plan sponsor should submit a roster online and use 'Check' as the payment type (not ACH). This will place the roster in a Held status. Once the roster is in Held, please have the plan sponsor send us an email requesting that the roster be updated to an earnings roster. They should provide the amount of the roster, batch number, and the payroll date. Their email should also include instructions to have Recordkeeper Direct change the payment type from Check to ACH. Once we have coded the roster as earnings, we will submit the ACH draft, and therefore a check does not need to be mailed to us."

That makes sense that the name may be fake too. I hadn't considered that.

Thanks, those are good suggestions.