rcline46

I would think this is a classic 'mistake in fact' and returnable TO THE PAYROLL ACCOUNT. The employer then fixes the employee. I do not think it can be paid to the employee.

You've got to be kidding. First, the definition of KEY employees must be checked. I find it VERY hard to believe a 401(k) plan which passes ADP and has 200 eligible ees to be T/H! (Unless there are a lot of family members!!) Second, I think the bank fulfilled its obligation barring some special contract features. The Plan Administrator failed. Third, if it were our plan, we would have accrued the TH contribution regardless of what the client wants, because it is required to be paid. It would not 'disappear'. Fourth, what is this bit about 'correcting' the TH problem? Now the bank knows why you hire TPAs.

If eligible, include comp. 401(k) is part of PSP plan, even if a separate plan. 404 always uses annual pay UNLESS there is a change in the plan year.

There are severe inconsistencies (my choice would be bugs) in the 4.3 release. 1. ADP / ACP test - includes unconfirmed deferral transactions, EXCLUDES unconfirmed match contributions. (Supposedly fixed in 5.0) 2. Post with 415 limits EXCLUDES all unconfirmed transactions (Supposedly fixed in 5.0) How many of you have now blown 415 limits? 3. ABPT in the General Tests EXCLUDES all unconfirmed transactions. THIS IS NOT CHANGED IN 5.0 NOR IN 6.0!! How many of you now have bad agebased plans? Does everyone else check Q's additions to see if they are different in different reports? I view this as a serious bug and should print a warning at least on the screen, if not on the report.

This is no different than a plan with dual entry. TH is still on full year pay, so it would be on full year pay for change in status.

Generally no, you cannot exclude from Top Heavy. However, if you specifically write them out in the document, submit to the IRS with full disclosure, you will get a LOD and can then keep them out.

Tom, it is the ABPT that is NOT finding the unconfirmed transactions, and still is not under 5.0 and supposedly 6.0. The ADP and the 415 limits are (supposedly) fixed under 5.0. I still cannot find the Quantech board! Is it on Benefitslink?

A distribution to an employee/participant is allowed under certain rules. Generally a loan or a hardship. Unless your document contains such language as stated by WESSEX, we would not permit a distribution and require the participant to obtain legal opinion to the contrary. In the documents mentioned by WESSEX, was that particular language specifically pointed out to the reviewer or just buried. Unless specifically identified, and the IRS later disagrees, the LOD is worthless. OTOH, if specifically identified in the submission the LOD is good until rescinded no matter what the IRS wants, so past practice is protected.

A loan is a contract under state law. You cannot unilaterally change a contract. Reg Z only applies if 24 or more loans are granted in a year so it may or may not apply.

We will continue to use defined groups. To stop the practice the IRS will have to totally rewrite the 401a4 and 410b regulations, and get them approved. They will also have to remove the 7.5 - 8.5 interest rate safe harbors and lots of other things. For the IRS to admit they were idiots again (ala small plan audit) seems to be far fetched. I think its a political sap to Ellen Schwartz of the NY TImes fame.

I view having various test reports (ADP and ABPT) showing different answers as to contributions made as a very serious bug. Why would one check the totals on the ABPT when the 401a report and ADP/ACP are correct? Either the ABPT should not run at all, or it should correspond. Tom, I thought this WAS the Q board at benefitslink.com - that is how I got here! Reed Cline Benefit Consultants Group.

People will not save unless sold on the idea. No selling, no saving. SHows what a crock 401ks are doesn't it.

We have charged loan fees forever on initiation, do not yet charge annual fees. Taken from proceeds of loan.

Am I the last to know? In Quantech 4.3, unconfirmed MATCH transactions do NOT show in the ACP test (reportedly fixed in 5.0). When posting with 415 limits, NO UNCONFIRMED TRANSACTIONS are used (reported fixed in 5.0). Here's the best one - in doing the 410(B) Average Benefits Percentage Test, NO UNCONFIRMED TRANSACTIONS ARE USED. THis is NOT changed for 5.0 or 6.0. Am I wrong in believing these are serious oversights? Who would check the totals on a test if each of the individual reports were correct??