R. Butler

Safe Harbor matching contributions can be used to satisfy top heavy for plan years beginning after 12/31/01. Safe Harbor matching contributions can't be used to satisfy 401(a)(4).

That would be an absolute nightmare.

Employee A is attempting to roll money from a prevoius employer into the ABC, Inc. Profit Sharing Plan. The rollover chek is made payable to ABC, Inc. fbo Employee A. I am inclined to suggest that ABC, Inc. have the check returned to previous employer's plan and have it reissued to to ABC, Inc. Profit Sharing Plan fbo Employee A. It bothers me that this check isn't made payable to the Plan. Am I making too much out of this? Should the rollover be accepted as is?

austin3515, "IS that because the limit is the lesser of ADP of NHCE's plus 2 or 2x the ADP of NHCE's?" -- Yes I don't necessarily know the reasons behind the ADP test, I just know how it works.

If it is a profit sharing plan with no 401(k) provisions, a 401(k) safe harbor provision could be added new at any time during 2003. They could give notice now and make the safe harbor provisions effective 2/1.

The IRS Notices don't exactly say 30 days, they say reasonable time. They go on to say that Safe Harbor Notices will be deemed reasonable if they are provided at least 30 days, but not more than 90 days before the start of the Plan Year. The Plan Sponsor needs to decide whether a 12/19/02 Notice reasonable given all the facts & circumstances. Does this a Plan that currently has a 401(k) provision? If not you can make the safe harbor effective 2/1.

My prior post assumes this is just a vanilla 401(k), no ADP/ACP safe provisions or SIMPLE provisions.

0%, unless the HCE is over 50 and then he could do the catch up contribuiton.

We currently use Relius for the 5500. We are considering moving to Datair primarily because of cost. Is Datair's 5500 progarm good? Does anyone know how it compares with Relius?

This should work. I did it real quick; it looks fine to me, but still check it carefully. I've got a formula in the deferral column to calculate the deferrals, but you could just enter a dollar amount.

Not includible in the ACP. Terminated with less than 500 excludable from coverage test. Less than 1,000, but more than 500 or still employed regardless of hours, nonexcludable, nonbenefitting.

Generally it depends on the document. Many documents provide that participants can start deferrals at any time, other documents have more restrictive provisions. They do need to be giving the opportunity to enroll on the 1/1 date regardless.

The payroll deduction is not the consideration that makes this a vaild loan. It is the loan note and promise to repay. The payroll deduction is just a method to accomplish repayment. This is a clearly valid loan.

Under 1.401(k)-1©(1)(ii) you can exclude deferrals form 411(a) and treat the participant as 0% upon rehire, however you need to check the doucment. The document may provide that elective deferrals should be considered in applying the Rule of Parity.

An over 50 participant doesn't necessarily have to defer $11k to have catch up contrib. Catch up eligibility can be triggered by statutory Limits (i.e. 402(g), 415), plan imposed limits as well as ADP failures.

I could very easily be missing something, but as Jody 303 points out, I don't see that you are passing 401(a)(4). The rate group percentage is 0. It seems to me you have to bring NHCE's contrib. to about $2,400 to pass.

408(k)(2) sets forth eligibility rules for SEPS. 414(B),© sets forth controlled group rules.

I respectfully disagree with mbozek. I don't see any authority for rescinding the loan to avoid the default.

See this prior thread. http://benefitslink.com/boards/index.php?showtopic=16950

Can you just forfeit their balance in a terminated Plan? I only thought that was an option in an active Plan. If you can forfeit the balance from a terminated Plan and the participant does later come back for his/her balance, how would you make the restorative payment?

Yes, as of 01/01/02.

415 limits are applied in the aggregate to all plans maintained by an employer. Unrelated employers would have separate 415 limits.

We do. Question was submitted to the IRS at 2002 ASPA Annual Conference. The IRS concurred (see Q&A 3 of the IRS Questions and Answers; its available on the ASPA website.)

Its not top heavy, its the gateway that you must satisfy to get to cross testing. Age weighted plans generally are not subject to the gateway requirements. See 1.401(a)(4)-8(B).

I would provide the employee with a copy of the SPD and if he still isn't satisified at some point you gotta just politely tell the employee to proceed how he/she feels necessary. If you wanted you could provide him/her with a copy of the Rev. Rul. cited or the Dol Reg. cited by mbozek. That DOL Reg. provides in part that "...Such a plan, therefore, may provide that an individual who has been a participant in the plan, but who has separated from service before the date on which the employer's contributions to the plan or forfeitures are allocated among participant's accounts or before the last day of the vesting computation period, does not share in the allocation of such contributions or forfeitures even though the individual is credited with 1000 or more hours of service for the applicable vesting computation period."