Bill Presson

Really nice post. I've known Christopher for more than 10 years. Believe it or not, not everyone posts here. And that's okay.

The key here is the type of insurance. shERPA is right on the difference in the limits. But universal life is considered to be term insurance so it falls under the 25% limit and you only use the cost of insurance.

We had a client get a notice as well. We're just going to file an amended return instead of argue about it.

Thanks everyone.

We have a plan that has failed the compensation ratio test. They exclude various items (bonus, overtime, etc.) and have always passed previously. However this year, the NHCE group got quite a bit more in bonuses than in prior years. So now the differential is about 5% instead of 3% or less. I cannot find anywhere an outline of what to do to fix this. Do we just amend to include pieces of comp until we pass? If so, what happens to the ACP/ADP tests? Are they rerun? Is there an issue that now comp is included that the participants couldn't defer on? Thanks for any help.

The thing that I've always loved about these regs is how the DOL & IRS think bankers have time to just sit around all day taking calls from plan sponsors to analyze potential loans that they'll never get. Brilliant government thought.

This had to be a difficult thing to write!! (not intended as an insult to the colleague above with the same name!)

We use Cash Balance Actuaries and they've done a very good job for us. http://www.cashbalanceactuaries.com/

How about a SEP? Of course. That resolves all the issues and they're always free.

We use Penchecks. The broker cuts the gross check to them and they make the distribution, tax withholding, 1099, etc. Full disclosure: I have no financial interest in Penchecks, but I have known the guys that run it for a lot of years.

Interesting. I've never done that before and was unaware of the use. Guess necessity IS the mother of invention. Thanks.

Whether you can or not, why would you? I assume there are no deferrals or matching contributions in the davis bacon plan, correct?

1. Why would you have the immediately eligible people also receive the safe harbor? Since you can test them separately, you will only fail if you hire a new owner. 2. If the plan is top heavy, you can ignore 1.

If you find a way, let me know. We haven't found a way.

Two things: 1. Have them send you the Schedule A when it comes in and you can hold it for them. 2. Define "relatively small group". Because if it's under 100 participants, they don't have to file at all.

If you have a welfare plan "wrapper" so that they are all part of the same plan, you could report both on the calendar year 2011 5500 and use the matching schedule A and the schedule A ending within that year. Many, many plans are like this. This is how we do it too. I think the only "requirement" is to be consistent year-to-year. Agreed.

If you have a welfare plan "wrapper" so that they are all part of the same plan, you could report both on the calendar year 2011 5500 and use the matching schedule A and the schedule A ending within that year. Many, many plans are like this.

hahahahahahahahahahahaha Thanks.

Agreed, with the caveat that if there are additional service dates, you might be able to have some additional reimbursement in year 2. Somewhat smilar to braces.

In my opinion, you have to wait until next year and I think most people will agree with that. Once a participant has met the allocation requirement, you can't change the allocation.

Correct.

Nobody. As you pointed out, there has to be separate plans; not separate components.

While I'm not a huge proponent of whole life insurance in plans (especially since it is never done correctly), I can see some times where it is appropriate. But why have term in the plan? The PS 58 cost reporting is essentially passing through the premium payment, so I'm not sure of the benefit?

Definitely use Penchecks. Wonderful organization that knows their stuff. I have no financial interest in Penchecks, btw.

I have never run a prevailing wage "component" as anything other than a separate plan, so keep that in mind. But when I've done it, we always draft the document so that only prevailing wage compensation is eligible to be included in the prevailing wage plan (and no HCE's are eligible) and only non prevailing wage compensation is eligible for the regular plan. Does your plan have some kind of split built in? If so, I think that's your testing answer. If not, I'm not sure how you're doing the allocations.