rcline46

Based on your explanations, you do not have it correct. First, for statutory exclusions, if a person has not reached a statutory entry date they are not in any test (if all the statutory exclusions are non-HCEs). For those who are includable, you will use their compensation and deferrals from their actual entry dates and NOT the statutory entry dates. Example: If someones actual entry date is 4/1 and their statutory entry date would be 8/1 (you said it was a fiscal year), then you would use everything from 4/1. You cannot test a person partially excluded and partially included.

Stock purchase? no can terminate see 401(k)(10)!

They were late. Gonna have lost earnings and excise taxes. Just give it to them and don't argue, save your energy to fight another one.

Why discourage people from taking loans? Just amend the plan to remove loans, no more problems.

Refer to the threads on -11(g) amendments.

Now Sieve, if you change the rules, the answers change. Purchasing insurance on the owner for an underfunded plan just might be acceptable.

I thought 'maximum' is an absolute. It is obvious from the possible answers that the de minimus was considered at both 4 and 5 years. As mr. rigby pointed out it depends on if instructions specifically exclude the de minimus benefits. If not, the suggested answer (IMHO) is wrong. I would use D.

The way I understand the instructions, you must wait for the 2009 forms and cannot 'mark up' a 2008 form. YOu must wait until sometime in 2010 to file. I sure hope they give us a paper option!

I would not amend after year end for a true up. Underfunded matches are possible on a per pay basis if mis-calculated and should be fixed. However, matches on a per pay basis for participants who make high deferrals early in the year are usually 'low' when reviewed at year end, but are correct based on the document.

Read the instructions for the 2009 forms. Yes they are available. This option is not permitted under the current version of the 2009 forms.

Correct, the match should be forfeited. If contributed in the last 12 months, it is a calculation error and may be returned as a 'mistake in fact'. If they use a payroll service, they should be notified of their error.

If she is eligible for any part of the plan, and was not terminated by end of plan year, then yes. Also, if the plan is using compensation while a participant, make sure the PSP contribution is greater than Top Heavy based on full year pay.

Just so poor Todd does not get into trouble - there are other services that advertise on the main Benefitslink home page. Also note that the fees involved in finding the participants is payable by the plan assets.

How would you know if the participant went directly to the contract issuer, especially a terminated employee?

See IRC 411(a)(11) (I think). Balances after spinoff must be the same as before spinoff, and vesting is not mentioned.

See Revenue Procedure 2008-50 (EPCRS)

He enters on re-employment date. Next entry was 7/1/08, so later of is re-employment date.

What was the date of termination? If in 2007, no SB required. If in 2008 you have 90 days after the release of the SB to file the final 5500. YOu should have been aware of that. It was released in December 2008 I think.

dbvail - the catch up is NEVER matched in your example - the math just does not get there. Even though it 'appears' after week 39 the deferrals will be applied (at the end of the year!) to catch up, the deferrals are not reclassified at catch up until the year end. Until then they are just deferrals. THe math at year end gives a Safe Harbor Match of 4% ($6,000) on $150,000. Since the deferrals are either 13.67% or 10.33% and the SH match can only be on deferrals up to 6% of pay, the math just is not there. You may be making the leap that a deferral is classified as catch up when made, and that is not the case. bg5150 - remember the OP was about SAFE HARBOR match, and if you have a Safe Harbor plan which limits the HCEs....... that is a really big OOPPPS. If it is not a SH plan, and HCEs are still limited to 2% of pay - somebody has really failed the client. SO, anyone can make up plans where it MIGHT match on Safe Harbor, but has anyone seen a real plan where it has happened?

You got me - I have even done some of those! Ohhhhhhhh - Match then causes 415 to fail! That is why I was looking for a real example. At 25% of pay, $46,000 means $184,000 in comp (oh, but the match counts against the 25% limit - more complications) and the deferral is only 2.72% of pay which means if HCE, the NCE ADP would only have to be 1.36% of pay, and likely a QNEC would be better than a SH match, etc, etc, etc. I have not yet seen a real case where the SH match has made it into the catch up amount.

THe 11(g) does NOT say Group X is increased by some amount, it says PERSON x is increased. There is nothing improper with this amendment nor does it grant rights to a GROUP directly or indirectly. In fact, 11(g) specifically acknowledges this which is why it exists. Also note that this does not affect any accrued benefits because it happens AFTER the year end! It is a retroactive amendment which is why the IRS believes and such contribution is only deductible in the year the amendment is signed. (Side note, I don't think you can do this to a prototype plan because it makes it an individually designed plan.)

Jim, if the stated allocation to a group is 5% of pay, and the -11(g) amendment says 'Notwithstanding the foregoing, for 12/31/2008 Sally will receive an additional $145 and Peter an additional $120", how do you see that as a cut back for the group?

It would be quite interesting to see a fact pattern where a Safe Harbor Match was actually applied to a catch up.

I agree that the participant must sign the form and make a tax withholding election. I am on their side.

You must speak with the DOL on how to interpret their words. I can only report on what was said at various meetins and the fact the interpretation was by the speakers (with the usual caveats).