rcline46

lippy, did I tell you I HATE REGLATIONS!!! 1.403(b)-4(b) does not seem to be relevant as I am not testing the 403(b), the test is in the 401(a), and the 415(k)(4) is not relevant as there is only 1 organization involved. What little I can glean, is that the 403(b) deferrals ARE included in the 401(a) 415 test. Actually it would seem there is only one 415 test which is not related to plan type. Would be nice see something that says that, but my search skills on the BNA site don't seem to match the way they present stuff. As for the references for ABP - not testing 403(b), but I see deferrals are not included in the discrimination testing for 403(b). There EOB references - don't have the 2009 EOB, have 2008 and page numbers don't seem to line up.

When the plans are sponsored by the same employer, I don't think 415 would allow $49,000 in the 401(a) plan PLUS $16,500 in the 403(b) PLUS any match or non-elective contributions in the 403(b).

I guess technically 415 is not a discrimination test, only a compliance test. SO you do agree it is in the 415 test?

410(b)? SLOB?

Not for profit has a deferral only 403(b) and a 401(a) with 'varying' contributions by person. Since 2002 even Not for Profits have had to pass discrimination testing. Oh by the way - we are taking the plans over for the 6/30/2010 year.... As I read 415, we aggregate the 403(b) deferral with the 401(a) contribution to test maximum annual additions. Indications are this was 'overlooked' in the past so I am asking for confirmation on this point first. Since the 401(a) contributions are such that they cannot make any safe harbor formula, and they cannot pass general testing on a contributions basis, I now go to cross testing. IF (that is a big IF because I do not know the results yet) each rate group does not pass 70%, I will need to perform the Average Benefits Test. If I have to do the ABP, then again I include the deferrals into the 403(b) plan, correct? My thoughts are yes and yes, but I am willing to listen to rebuttals.

Scanning the records is retention. YOu must keep records to prove benefits forever. There are other threads on this - use the search function. Plan documents and information are necessary. We are working on a DB takeover, PBGC plan. When the plan is terminated, the PBGC will audit (they always do) and they want proof of how the accrued benefit was calculated. The plan has been frozen for 8 years. If there are no records after 7 years, how can we prove the calculation? How will you prove that someone was paid if you have no records? Keep the records.

Retirement benefit records are kept forever.

It is my considered opinion that the distribution is based on the check date, not the date the liquidation is ordered. A distribution is when the funds leave the account.

I would stretch it this way - hardships are not rollable, nor is the ADP refund. I would use the hardships as covering the deferral amount, but NOT the earnings amount. I think the additional amount due to earnings should be distributed from the $1,000 left in the account.

Participant elected a lump sum, not an annuity. Plan could not pay a lump sum due to the Top 25 restriction. Plan could only pay the annuity equivalent each year. Therefore, the plan owes the lump sum at the time it can come out of the restriction. Otherwise it is denying a valid benefit. What happens if the participant dies while the plan is still in restriction? (Another recent thread agreed that the restriction still applies.)

Plan could not pay the owner the lump sum as requested due to funding issues, so the plan was paying the life annuity. Owner dies, and plan still owes the lump sum. Beneficiaries still cannot take the lump sum due to funding restrictions. The question is - do the beneficiaries now 'split' the annuity, or do they get a new annuity based on 1/2 of the lump sum owed and their own ages? I vote for a new annuity value.

Get an ERISA attorney NOW. It looks like the plan was converted into an ESOP or KSOP. Something smells in Denmark (to quote the Bard). I see fair market value problems with the purchase, more than 10% of employer money invested in corporate (and non-liquid) assets, to many S corp owners on the conversion.......

4.8(f) Adminstrator may prevent project failure. If during a Plan Year the match would cause the ACP test to fail (legalese removed) the administrator may reduce the contributions. Obviously shortened language - this is in the Corbel EGTRRA document. I would maintain that if the match were not done on a per pay basis, but after year end, the same principal applies.

Well, maybe not and maybe so - since it is a discretionary match, read the document carefully under the ACP testing and correction section. It just might say something to the effect that you cannot give a match which causes the ACP test to fail. That language is actually in the Corbel documents.

Yes, but as a DB plan, the loan is a general asset of the trust, and not from the participant's account. Still the usual limits.

Make it an indvidually designed plan, submit to the IRS specifically disclosing the separate feature and if they get a letter, its fine. Otherwise the rules in 401(m) only address elective deferrals, and the ROTH diversion is an elective deferral, so they have to match it.

If you REALLY have a plan that accrues 1/365th of a benefit per day worked, the person who designed the plan needs to have a good talking to! I guess that would count as an elapsed time method. Now, the document must also define how many days/months/weeks are needed to accrue a full benefit. Your ratio would then be (time before freeze) / (time needed for full accrual). In your case it could easily be 5/9 if only 9 months are necessary to accrue a full benefit.

Unless the plan is actually using fractional years (remember the old tables - so many hours or months gave a fractional year?) then it is all or none, and since the plan uses elapsed time (which means no hours, only EOY) for accrual, anyone still there at EOY has accrued a year. But you are feezing before eoy. So no once has met the accrual requirements, so my vote is no acrrual.

Yeah, somebody doesn't know how to calculate the match. Legally, no.

And yes, I would put the 'person' who recommended this on notice of an impending lawsuit for damages due to malpractice.

The '10% withholding' rules apply unless the participant elects something else. The participant is supposed to be given to option on the tax withholding.

SInce the contribution is 100% vested and subject to the same withdrawal restrictions as the deferrals, I don't see why not. Have not heard of any prohibition against it. Maybe someone else has a cite one way or another.

Dont forget that you can also correct under EPCRS Appendix A which is a QNEC - in this case enough to eliminate the additional giveback, in my opinion, is all that is needed and may be less expensive than the one to one. I think you are still under the failed ADP test rules.

I cannot believe an enrolled actuay would make such a request, much of it nonsense. J&S? That can be added any time. SOme think its good, others do not, and that should be the client's decision. Much of the other stuff is, in my opinion, not doable, the year is over. He is just trying to justify his Cash Balance design because guess what - its not working! He should have requested the changes prior to the year end. Even if for the current year, these changes need to be discussed with the client with the implications of each of the changes on the plan and contributions before changing the plan willy nilly. And did I say changing the formula after the year end is IMHO a bad idea?

If it were a matching safe harbor, then no. I haven't looked at a document recently to see it the non-elective safe harbor is contingent on being eligible to make a contribution, but I don't remember seeing that in our docs. Would this be prohibited language in that a benefit (other than matching contributions) are now dependent on the deferral? Or is that only if a deferral is made and not eligible for the deferral??? If the language specifically said the SHNEC was dependent on being eligible to make deferrals, and the language was 'approved', then I would agree no safe harbor.