R. Butler

Never had a Plan actually do it, but a few are considering it. Its allowed (see 1.411(d)-4, Q&A-1(d)). Whether or not it is wise really depends on the client.

Even with the repayment calculation error, are you sure that you are outside of the cure period? Even if interest was as high as 10%, it seems like he would only be about a month or so behind.

Thanks for the post. Very beneficial.

Thanks WDIK. If thats the case than I agree with G8r's analysis. (That is probably what QDROphile was saying too and I just didn't follow the position.) Having said that the answer does not change. The plan either has a CODA or it does not. If the Plan Sponsor has to specifically elect the CODA in the prototype and the Plan Sponsor did not do so, then the Plan does not have a CODA. If the Plan Sponsor did elect and its just not being used than the Plan has a CODA and Plan Sponsor can only adopt a safe harbor as of start of year.

GR8, I don't necessarily disagree, but are you really saying it depends? You're reasoning doesn't indicate that it depends. If the employer must elect to include the CODA and if the employer does not make that election than there is no CODA. It wouldn't depend because that Plan wouldn't have a 401(k) feature, the employer didn't elect it. Am I missing something? I am just trying to be clear for my own purposes. (Actually I have never seen a prototype doing what you suggest. I've seen straight Profit Sharing Plan prototypes and then Profit Sharing prototypes with CODA provisions, but never a Profit prototype with optional CODA provisions. Doesn't mean they don't exist, I've just never seen one.)

That would be my answer. See Notice 2000-3, Q&A 11.

If forfeitures reduce and $9,000 was deposited. We show the contrib. as $9,000 on the Schedule I. If forfeitures reallocate I don't see that it is an issue on the Schedule I. The money is always in the Plan its changing accounts.

Maybe I am a little too conservative, but I am not a fan of the former President and I don't see a shade of gray. The Plan either contains a CODA or it does not.

If a 401(k) arrangement is already part of the Plan, than your out of luck until the start of the next Plan year. I don't see as relevant, the fact that the 401(k) provision is not currently being utilized.

Unless you grandfather them in even current participants may be affected. Likewise, unless you grandfather them in non-participants will be subject to the new requirements.

I agree with KJohnson. We actually have plans that probably aren't required to provide the additional disclosure, but because its a fairly simple disclosure we go ahead and include it in all the SARs. I just seems pointless not to include it.

I agree with Mike Preston discretionary generally means flexible, unrestricted, not mandatory. The fact that it might seem unfair to particular participant may make it bad for employee relations, but it doesn't make it wrong. We would agree that the employer could terminate the match. Isn't that just as unfair? As Mike Preston points out you need to review the document carefully. I have seen at least one document that allowed for a disretionary match, but provided that the match had to be declared at the beginning of the year. Employer could stop matching, but it could only be altered prior to the start of a year. (Probably to alleviate the concerns QDROphile sets forth.) It was disretionary, but the discretion was specifically limited by the document.

There is no attribution from the father-in-law to the Son-in-law.

I disagree. The default is the reason for the offset. The offset can't occur until a distributable event, i.e. death, but if we say there is no default than there is no reason to offset.

I'm probably missing something, but doesn't the default trigger the offset. I realize that the offset and the default may not occur at the same time, but why would there be an offset if there is no default?

In our loan documents, death does trigger a default. How can death not trigger a default?

Thanks, I knew I was missing something.

Vesting comes immediately to mind if there is existing money in the plan or if discretionary matching contributions will be made. Also, top heavy requires you use to look at full year wages for the minimum, safe harbor can exclude comp prior to participation.

Compensation is determined over the entire Plan Year. If they make the change for the 401(k) they will probably eliminate the 11/1 entry date for profit sharing (its only there now because of the 401(k)). They want to make this change to make it easier to identify those eligibile for the 401(k). They have several employees each year that are work right around the 1,000 hour mark. For initial eligiblity you gotta work 1,000 hours. They provide us with census data in early May anyway. Rather than go through payroll data in March to determine 5/1 eligibiles. They just want to do it all at once in May.

A discretionary match provision wouldn't make the plan top heavy. Employer could actually make the match and as long as it meets the requirements of 98-52 (ie, match doesn't exceed 4% of comp., match doesn't consider deferrals in excess of 6%, etc.) the plan isn't top heavy.

I found the post on the discretionary profit sharing question: http://www.benefitslink.com/boards/index.p...=20&t=16949&hl=

Their was a prior post by Tom Poje (I think) in about November that referred to an IRS Q&A at the ASPA Annual Conference. The IRS indicated that the plan will still be soley safe harbor if discretionary profit sharing was provided for in the document, but not used. I'm confused by your second question. How are you meeting safe harbor with the 3% or the match? If you meeting it with the match, than at least the safe harbor match isn't discretionary.

Since all the changes to the Board I can't find anything using Search; used to find everything, now nothing.

ABC Plan has a fiscal year 5/1-4/30. Plan entry requires 21 & 1. Currently entry dates for all contribution sources are 5/1 & 11/1. ABC Co. wants to keep entry dates for profit sharing at 5/1 & 11/1, but wants to change the entry dates for 401(k) to 7/1 & 1/1. I don't see any reason they can't do this, but for some reason I gotta feeling that this will create a problem that I am just missing. Does anybody see any issue with this? Thanks in advance for any guidance.

Doesn't the document further limit the contribution to the annual addition limit? I'd be surprised if if it didn't, in which case you are fully funded at $40,000.