ETA Consulting LLC

No, it must be at least 4%, but the deferrals that are matched cannot exceed 6%. The 6% is not a reflection of the contribution, but the deferrals that are matched. This is a typical area of confusion. Good Luck!

There is certain flexibility offered under the Regulations. In all instances, you begin with the definition in Section 415 of the Code which provides for an "OPTIONAL" inclusion of amounts earned but not paid during the year. It's almost like an 'accrual method'. This has been the case for a while, but plans generally use "amounts actually paid" during the year as the basis. If you get paid on January 1st, then that is the first pay period of a new year. The recent changes in the 415 regulations pertained to the last paycheck after termination of employment. This is where you have an issue with an employee who actual terminates in December and receives a check in January. So, inclusion in post-severance compensation in the employee's ability to defer is an entirely different standard (and based on relatively new regulations designed to deal with this specific issue). So, you really have to look at the language in your plan (each plan) to determine how that plan measures compensation for various purposes. There really isn't a one size fits all since the regulations actually allows for the plan to choose a method within certain parameters. Good Luck!

True. Plan participation is not protected, so you can be disallowed participation by moving into a class that is not allowed to participate in the plan. It's a non-issue as long as you pass 410(b). So, you're right. Good Luck!

He was basically saying that given an average HCE rate of 2.6%, only 1.3% of the NHCE's match would be needed to pass the ACP test under the 2 plus & 2 times rule. This would leave an extra 1.7% in matching contributions (over what was needed to pass ACP). That's just his math. Poje was saying that the only way you could use Match in an ADP test would be a Qualified Match, but the deemed 3% is not a QMAC. I, of course, misread the question.

'Consistency'???

Okay, my bad. He's actually talking about testing "Employer Matching" contributions in the ADP test; not testing "Elective Deferrals" in the ACP test. That's not borrowing or reverse borrowing; it's just insane. If you want to test an Employer Contribution in the ADP test, then it would need to meet the conditions of a Qualified Employer Contribution (which requires immediate vesting). You can't immediately vest in something that doesn't exist; not even if it is 'deemed' to exist. My bad

There is no mention of QMAC. We're just saying that deferrals may be used in the ACP test when they aren't needed to pass ADP. So, once you get the ADP test to pass, you can shift the deferrals that were not needed to the ACP test in order to boost the percentages. This is irrespective of QNEC or QMAC. I'm not sure we're speaking of the same thing.

I'm under the impression he's just talking about 'shifting' deferrals not needed to satisfy ADP to the ACP test.

I promise Actually, the 403(b) doesn't. The non-amenders is "failure to qualify in Form" and, generally, does not pertain to any operational aspects. You simply failed to write the plan to a document containing language required for qualification after the list of required modifications were issued. There is no such "required" language for 403(b) plans. The only requirement is that the plan is written. So, when you attempt to submit to the IRS that you merely failed to write the plan back in 2009 when the rules required it; it's not defined by the IRS as a non-amender and they've been documented as refusing to even look at it. So, unless the 403(b) as an operational or demographic issues (i.e. loan failures or ineligible employers) then you'd be best to just write the plan with a current date and wait for some guidance from the IRS. Good Luck!

Sure. Generally, if something is deemed (i.e. deferral) you'd treat is as if it actually happened for all instances "except " where it is physically impossible (e.g. actually making a distribution of those amounts). So, you should be fine. Good Luck!

I think the reference has always been Compensation less pre-tax deferrals; even prior to the Roth rules. Good Luck!

Most prototypes will already contain the good-faith language require by PPA, but we still are in the RAP; so there is technically not missed "restatement" deadline for PPA. You're really looking at only two documents plus add-ons. The add-ons will, typically, be sponsor level amendments with default provisions referencing the effective date of the change (i.e. effective for 2009 there are no RMDs). There appears to be much uncertainty, but really isn't. You'll look back with surprise on how easy the process was. Good Luck!

Would providers such as FT Williams have access to those prototypes and what about the determination letter? Would I also submit for determination? Add to that, the 5500s have never been prepared properly when asked the required contribution question. Not sure on that one yet so if you have direction for me for that fix, it would be appreciated. FTWilliam is a fairly new company, so they wouldn't have any prototypes pre-dating the GUST restatement, but Corbel will. It appears as if you already have a TRA '86 document since that is what the plan would've been written to in 1992. You should ensure that the sponsor amendment for OBRA' 93 and all good-faith amendments (add-ons) are incorporated into that 1992 document. So, you're basically looking at a GUST document and EGTRRA document (while ensuring you include other post-EGTRRA-restatements such as RMD) in your submission. You can rely on the opinion letters for these adoption agreements, so you wouldn't need to file for a favorable determination letter. Even though they've never filed a Form 5500, you should still be able to ascertain a count. The Fees for the filing are typically based on the participant count, but it appears as if it's a small employer so they will likely be under the $750 fee. Should be pretty straight forward since you won't have restate to a TRA '86. A GUST document should be easier to find. Good Luck!

You should be fine under the Appendix F as it will include your full correction; amending all the way back to 1992. I don't think that amending to a current prototype will work. Tried it and had to go back and amend to prototypes for the respective time period. Good Luck!

This appears to go to a 'definite predetermined formula' requirement in IRC Section 401(a). We know that when an employer makes contributions to a 403(b), certain rules under 401(a) are envoked (in certain instances). If it's a church or public school (gov't employer), then 401(a)(4) won't apply; nor does the vesting rules of Section 411; incorporated into 401(a)(7). I cannot trace a direct link, but would not dream of doing this if the employer is a non-profit who is not a church or a government (for no reason other than the vesting rules not applying to churches or gov'ts). The answer, then, would appear somewhat debateable if the employer is actually a church or gov't since all the rules aren't applicable (it 'may' be okay). Sorry, I cannot give a more definitive answer, but that's the best I could find. Good Luck!

You cannot change the conditions for receiving an allocation after those conditions have been met. Not sure how this fits into your fact pattern, but you can amend however you like provided you don't violate this rule. Also, if the plan is a Safe Harbor 401(k), you want to ensure the amendment wouldn't change the terms of the notice that was provided to employees at the beginning of the year. Good Luck!

My bad :angry:

You've identified the main one. A 401(k) is a CODA (cash or deferred arrangement); an employer contribution made pursuant to the election of the employee. Any notion of such option being provided to either contribute to the plan or receive in cash is considered an elective deferral. Good Luck!

Second confirmation

No. The 25% is a deductibility limit. Since the employer isn't taking a deduction, they can fund up to the 415 Limit (e.g. 100% of compensation up to the dollar limit). Good Luck!

Well, there should normally be a consistent procedure in place for dealing with lost participants under the normal plan operations. This procedure would not change; it's just a part of the continous process of ensuring you retain current address information for all participants. Good Luck!

His question was how you could provide the additional contribution in order to meet the gateway (when the HCE receives above 9%) when those early entrant fail to meet the age and service requirements for that contribution.

You think??? Either a tranlator or a mind reader. I wonder what the person who wrote this was thinking

Yes. Some prototypes contain that option to select a "gateway" class to be used exclusively for purposes of getting each person who would've otherwise not satisfied the gateway up to that amount. Your document may already have that provision. The question, then, becomes whether that provision brings in only those who failed the accrual requirements or does it actually incorporate those who failed to meet age and service for that particular contribution. If not, then would it be reasonable to define your classes as employees who are 21 & 1 before each class currently in the plan (e.g. 21 & 1 who are HCE; 21 & 1 who are NHCE, Early Entrant HCE, Early Entrant NHCE) and change the age and service requirements to immediate. I appreciate the complexity of your question. Good Luck!

"Like". I wholeheartedly agree. Which is why I, typically, refrain from blatantly stating anything. "There are several "APPARENT" fiduciary breaches" was my attempt to avoid making blatant statements. I see that at being much different from saying "There are several fiduciary breaches" or "There are several obvious fiduciary breaches". Good Luck!