rcline46

Late to the discussion, but if one has to qualify each year, how can someone defer in January if they have noy yet qualified for the year?

First, there is NO distribution for an In Plan Roth Rollover. Although there are no regulations, I do not see how how there can be any tax withholding at the source. I think the participant will have to file estimated tax forms both for the Feds and possibly state goverment, and pay their taxes.

Put your thinking caps on - Multiple Employer Plan, and of course a Key Employer draws pay from both employers. Payroll records shows he deferred and received a match from only one employer. The question is, do we use his balance in the Top Heavy test for only the employer from which he recevied the match (and made his deferral), or do we include his balance in both tests? Or maybe we prorate his balance based on his (average) pay from each employer? Thanks all for your ideas (and cites if there are any).

I know our software allows you to identify the sources from which you can take money (Relius), and you can include/exclude sources at will. I see nothing in the documents that say you MUST take prorata. Administrative procedures can be set willy-nilly. So I firmly believe the participant can direct from whence the money comes. Otherwise, the person making the transaction becomes a fiduciary by making investment decisions!!!! (That is the purpose of the default choices).

Firehawk734 - use the search function on 'double taxation'. There are prior threads on this. the interest paid is double taxed, but not the principal. Thinking it is double taxed is just fuzzy thinking. I do not follow the idea on borrowing from the Roth K account, probably my fuzzy thinking this morning. The only advantage (possibly) is that the interest you pay back may be higher than the earnings in the plan (a plus), but may be lower (a minus). SInce you self-direct investments, you can most certainly direct where your loan money comes from. Anyone who tells you differently just has not read their documents. All firms use a 'default' loan process, but the participant certainly can choose.

Sponsor does not take back the match. Unvested portion is forfeited, employee gets distribution. Employer may own sponsor, but $ goes to employee, not employer.

Making a comment because I can - 30 years ago, our document software and our administration software ran from the same data-base, so we never had a conflict. It was done in Fortran, and we produced documents for DC and DB plans. It amuses me to see newcomers struggling to accomplish what we had back then - without PCs, networking and all t hat jazz. Someday I hope the current vendors can figure out how to do what once was done.

look up KSOP and review problems and operational items. Look up ENRON and see what can happen. Review all rules on blackout periods which will happen frequently in this type of plan. Speak with your software provider to see if you system can handle it.

I have read articles that say an employer (fiduciary) should get proposals from other firms or use a bench marking service to determine if the fees disclosed under 408(b)(2) from their current provider are 'reasonable'. What I have not found is a discussion of how many proposals or how often the proposals should be obtained so t hat the fiduciary should feel they have done their due diligence and therefore be protected. Is there any direct reference in the DOL promulgations as to quantity and timing? Is there any kind of concensus in the literature as to quantity and timing? Or is it being ignored. Thanks all to your insights.

It moved - have to use 'view new items' and you get a new menu on the right hand side.

I really, really, really miss by 'view new posts' button! It was FAR more efficient thatn the new set up!

The compensation LIMIT must be prorated for the SHMAC as well as for 415 testing.

I would bet the interest paid on the 'stolen' money is higher than the MM interest! And yes it would be a PT.

If you read the Gateway section, the process you mention absolutely fails gateway. Unless there is something not being mentioned that the 'other' firm is doing, what you heard and repeated here does not satisfy gateway. However, if they are using smoothly increasing bands or are not using corss-testing tot satisfy 401a4, then gateway does not apply. Testing is a huge and varied field full of land mines for the un-wary and opportunities for the savvy.

who is the leasing agent for the apartment? Their records should have the forwarding address of previous occupnants/lessees.

It is time to become familiar with Revenue Procedure 2008-50.

COVERAGE, not ADP. My Bad. Sorry. Now I have no advice.

If the code says the HCE is in the main test, how would that mess up the Safe Harbor? The Safe Harbor has its own rules as to who receives it, and not who is in the test.

If it helps testing, the HCE does not have to be treated as an Otherwise Excludible Employee and can be in the main test.

I bet the document allows for it! And the regs permit ad hoc setting of limits. I would not be concerned.

Nobody (govt) cares about HCEs, so of course you can limit by name.

Please be more clear - 404a5 or 408b2? if 408b2 it is none of the participant's business what it is.

I do not think this is a plan error. It is a sponsor or payroll provider error, but not a compliance or operational error in the plan.

Thank you. So it is still a 1000 hour rule of sorts.

A 403(b) client is insisting that summer camp counselors are excluded from the plan because they exclude anyone who is scheduled to work less than 20 hours per week. They wan to apply this because of the months the people do not work. Has anyone seen anything 'official' on just what this means? That is, may it be averaged over some period, or some other concept?