Bill Presson

Just thinking out loud here: 1. A first day requirement still wouldn't eliminate a top heavy contribution requirement 2. We often use 1000 hours in conjunction with the last day requirement which gets you most of the way there

Yes.

I have no issue with forfeitures not offsetting salary deferrals, but the rest of their current stance is just stupid. It's a way to increase administrative headaches without actually accomplishing anyting.

Obviously, we know very little about the business or plan design in your situation, but making contributions for some employees and not others can be perfectly legal and a very attractive option. In the past, we've installed plans for fast food franchises that would do this extensively. We excluded all highly compensated employees and anyone that wasn't an assistant manager or manager (as long as they weren't also an HCE). We would then have a plan covering 40-70 people and the business could contribute as much or as little as they wanted. This kind of plan works really well when the owners aren't looking to benefit from the plan. So, it can be done. Should it be done is another question because there can be some political fallout.

Ironic that the DOL doesn't consider this to be true when an employer sends a check to a custodial account. If it hasn't cleared the bank, it doesn't count.

QDROphile got back to this before I could, but that's the direction I was heading with my questions. You've got a chance to pull this out, but you're definitely going to need legal assistance.

Can you explain this part in any more detail? What did they do to "set up the plan" at that time?

Or ever...

The best way is to post random questions on unrelated message boards. That always causes lots of people to send you money.

Agreed. Let's see what we can do about this.

Austin, our Dallas office does some of this, but we're phasing out of it. After watching what they were doing for the past 9 months, I realized that unless you are doing a lot of it and it is highly automated, it's very difficult to make money. The biggest issues we faced were the actual movement of the money. We had a "bin" set up at Mid Atlantic Trust. All of the money would be deposited there. With schools and governmental entities, it's very difficult to get agreement to do an ACH, so they would all send checks. When we get the payroll file, we have to process where the investment elections say the money needs to go. It can easily be 5-8 different places. You need to then get the money from your centralized "bin" to the investment providers. There is a cost for each transaction. There is also some amount of time delay (depending on wire/check, etc.) in getting the money actually invested. You also have to determine what kind of "back up" you are going to send to each provider so they know how and for whom to invest the money. So we've decided that we are probably going to reduce our plans like this. Just FYI. Good luck.

We will generally give the employer two options: 1. Fix every return 2. Fix the most recent one by amending and putting the correct number and showing that prior returns were filed under the other number. Most choose 2. It may not be the perfect answer, but we think it helps set things right.

With welfare plans, generally audits are only required if the assets are held in trust.

The deposit was not for me - but for other employees that are involved in 2010. December of 2010 he ammended the plan so the 3% contributions would not be mandatory. Thanks for reading and responding. I appreciate it. Ok. The wording just made it appear that we were just talking about your account. No employer should be allowed to get away with this and the TPA should either get him to fix it or resign.

Question though: Why was he supposed to make a deposit for 2010 if you left in 2009?

The only way I know to do this would be to spin off the PS portion into it's own plan; then terminate that plan.

I just love investment firms that don't want to get involved in doing the tough part of retirement plans. Goobers. Anyway, I would never, ever recommend that plan assets go to an Employer account. One day is a prohibited transaction; forget an extended period of time. Thus, the perfect solution in Penchecks: use them for all those other distributions. Full disclosure: I have NO financial interest in Penchecks, but I am a satisfied client.

Ironic.

We've used Relius 5500 software since it was Hyperprep and have always been satisfied. We chose not to use the Web Client and instead just uploaded everything directly to IFile. That worked extremely well for us and I think it was one of the better decisions I've made. We'll be sticking with the Relius software.

We've had some clients recently involved in DOL audits. Both of the auditors have indicated that the standard for large plans is less than the 7 day safe harbor allowed for small plans. FYI.

We recently have had clients go through an IRS and a DOL examination (different clients). Both reps said to view the amounts in conjunction with the latest date the deposit is allowed (15th day of the month following, etc) and make a reasonable decision. If I was faced with what you have, we would recommend to the employer not to report the amount as a late deposit.

I have the same recollection, but can't find it anywhere.

We've had one for years, but we are having it reviewed just to see if it needs an update.

When would you ever be able to restate it?

Authority, probably. But at the Benefits Conference of the South a few weeks ago both Andy Zuckerman and Monika Templeman claimed that they just want to see evidence that the documents/amendments were adopted timely even if they weren't properly signed. I would ask the IRS auditor to get technical advice and if you still don't get a good answer, then contact either Andy or Monika.