R. Butler

You are correct.

Thanks for all of the replies. It seems that the discontinuance of the 403(b) is not a distributable event. mbozek, They are not necessarily going to terminate the 403(b) they are just considering all possibilities. The rollover issue was a question their CPA had if they do decide to go this route. Actually they would add a safe harbor 401(k) provision to their existing profit sharing plan. We don't handle their profit sharing plan, but depending on their administrators fee schedule there may not be any addiitonal cost, other than an amendment, but thanks for the advice.

If forfeitures increase the discretionary match they are included in the ACP test. Its an additional matching contribution, what would be the basis for excluding it?

Employer has a 403(b) and a Profit Sharing Plan. Employer is considering discontinuing the 403(b) plan and adding a 401(k) provision to the Profit Sharing Plan. If the employer does this can the 403(b) monies be rolled into the 401(k)? It seems to me that the answer is no; the discontinuance is not a distributable event, but then again I know very little about 403(b)'s. Thanks in advance for any guidance.

As Harwood points out that IRA rule isn't effective until the regs are issued. Just force them out.

If you are attributing under §318 then yes it is attributed. If you are attirbuting under §1563 then it depends: 1. If child is under 21 then yes 2. If child is at least 21 and dad owns more than 50% of the business then yes. 3. If child is at least 21 and dad owns 50% or less then no.

Thanks KJohnson, now I'm not going to be able to sleep tonight because I'll be up worrying about my job. Actually this seems to be somewhat different than the initial proposal. If I remember correctly the intial plan pretty much eliminated everyhting, but a deferral and a pro-rata profit sharing allocation. This may be a little more palatable. I need more details. I don't know my head is hurting already.

Technically they still wouldn't be able for the hardship if they can get the money from other assets or commercial sources (such as a mortgage loan).

After EGTRRA deferrals are deducted separately and are not applied to the 25% limit.

Its debatable. As pointed out in the intial post Gary Lesser's comment referred to the IRS model language. As also pointed the intial post if the plan doesn't use the model language several reputable commentators say its permissable. I would probably be cautious and reccommend against it, but others will disagree. Just make sure if you do it, you can pass the ADP test and that there are not any anticutback issues.

If he could get a loan, technically he couldn't take the hardship.

Final Loan Regs Q&A 9, allows you to suspend loan repayments when the particiapnt is on a bona fide leave of absence. Just because there is a suspension doesn't change the 5 year repayment requirement. We generally recommend reamortizing to avoid a baloon payment at the end. We doing pretty much what the example in Q&A (9)© sets forth.

Participant takes out a loan @ 5.75% interest. Participant then takes a bona fide Leave of Absence. During the LOA, the Plan's loan document is amended. Participant returns to work, loan is remortized. If this was a new loan interest would 6.25%. Recordkeeper reamortizes at 6.25%. Shouldn't the interest rate still be 5.75%? We don't have a new loan, just a resumption of the old one. Document is silent on this issue. Thanks for any guidance.

See EGTRRA §613(d). If your Plan consists solely of the a deferral and the safe harbor contribution then the Plan is not top-heavy. If someone doesn't defer he doesn't get a contribution. If your plan has contributions besides deferrals and the safe harbor match, the plan doesn't get the benefit of §613(d); normal rules will apply.

If a participant cannot take diversify investments, obtain a loan or receive a distribution during the period in question the blackout notice isn't needed. I'd be careful though, we have a handful of balance forward plans where although loans &/or distributions may be based on the last quarters balance, they still can be taken at any time.

I think you may be missing something T-6 Q. What is a required aggregation group? A. For purposes of determining whether the plans of an employer are top-heavy for a particular plan year, the required aggregation group includes each plan of the employer in which a key employee participates in the plan year containing the determination date, or any of the four preceding plan years. In addition, each other plan of the employer which, during this period, enables any plan in which a key employee participates to meet the requirements of section 401(a)(4) or 410 is part of the required aggregation group. This concept may be illustrated by the following examples: There would be a required aggregation group: 1. If at at least one key employee participates in each plan. It does not have to be the same key employee. 2. If plans are aggregated to pass 401(a)(4) or 410(b).

That formula is permissable for both ADP & ACP safe harbors because: 1. At any deferral rate, the contribution provided is at least equal to the amount that would have been provided under the basic formula. 2. Higher rates of match are not provided for higher deferrals and 3. The formula does not match deferrals in excess of 6% of comp.

There are a few prior threads out there on this. Attached is a link to one of them that I could find fairly quickly, but there are others. http://www.benefitslink.com/boards/index.php?showtopic=10321

Disregard, Relius Support was quick this time and solved both my problems.

Plan has a last day requirement for match. Relius allocates the match correctly, but on the General Nondiscrimiantion analysis it will report terminated participants not receiving a match due to the last day requirement as benefitting under 401(m). Also it reports participants that have terminated in a prior year as eligible, but not benefitting for 401(k) & 401(m), but does correctly report those same participants as excludable for 401(a). Any thoughts on where my problem lies?

Thanks, thats the same book I was thinking of.

I got volunteered to speak at a seminar on 5500's. I prepare 5500's, but by no means am I an expert. I need to beacome an expert over the next couple of months. Can anybody recommend a good Prepaper's Manual I could study? Several years ago I saw a Manual by Joan Guaciardi (I think, but maybe not) that was excellent, but I can't remmeber the name of it and don't even know if it is still published.

Unless there is an anticutback issue or some specific provision prohibiting it, you generally can make retroactive amendments.

This issue has been discussed before. http://www.benefitslink.com/boards/index.p...=20&t=17499&hl=

I'd read the doument carefully. Even if it says forfeitures reduce, that does not mean that there isn't a separate provision in the Adoption Agreement that does allow for it. Often there is a provision that allows for expenses to be paid from forfeitures and then the separate provision the remaining forfeitures reduce or reallocate. If the document doesn't allow for it, do as Kirk suggests and amend.