Alf

I saw that the teleconference is still on for today, but we didn't see any guidance this morning. Does anyone know (or have an educated guess) about the status of the teleconference and/or guidance? Thanks.

Correct.

It really is not going to be the same, I'll guess (vesting, distribution restrictions, etc.), but you are in audit CAP, so anything goes. It is a pretty unique situation (3% NEC AND safeharbor match), so I'll guess that if it is presented correctly, it could be sold to the IRS.

The DOL Enforcement Manual used by their auditors is on the DOL website. I would think that you could sucessfully resist disclosure of the owner's tax returns, but I would come up with a reasonable compromise. Do you really want to agitate all of those nice, hansome, under-appreciated, hard-working professionals at the EBSA?

Yes, especially because of the spin-off. There is no answer from the IRS on this, but logic (to me) dictates that this is the same "employer" and ASG compensation should count. At best, you are only going to get the break for one year anyway.

Isn't it used in the new 6 month distibution provision of 409A? For 2005 we use $135K for 409A, right?

Everybody "wraps" each of these components into a single plan and files one 5500, but you have to paper everything that way. For example, the SPDs should not identify each with a separate plan number (501, 502, 503) if they are part of a wrap document and you should have one ERISA plan document, not three.

Compensation paid to non-employees can't be deferred in a 403(b). You can't maintain a 403(b) for non-employees, so any compensation paid after 12/31 is ineligible for deferral.

It is hard to grasp with a 0% match, but everybody gets at least the lower match 0%, so everyone is in that group and you pass, not fail.

Distributions being made for reasons other than the plan termination should continue, just as other administrative functions of the plan continue. So, death, employee quits, hardship, etc. should continue. Most companies don't make the distirubutions that are solely due to termination of the plan until the IRS rules on the determination letter application.

I think that the transition rule will let employees cease deferrals AND get their 2005 money back. The distribution of deferrals made during the transition period would otherwise violate the distribution rules.

They don't have to be, so they probably are not, but look at how the plan is worded. The 100% vesting applies to money in the plan at that time, later earnings on those earlier amounts and later contributions don't have to be fully vested if the document is written correctly.

Very small plan, so there is very, very little (i.e. no) chance that the IRS would open this up on audit if you fully corrected based on the Appendix. Self correct and include a memo about how this is insignificant and move on. Cut corners on the approved IRS correction and I think you would raise a flag.

Why 200K? Not that any of this would fly, but wouldn't you just use $42K?

I wouldn't be comforted by any infomal guidance you receive from the IRS. It is going to be ultra-conservative at best and this is what you are going to get: "That doesn't work." You are much better off posting your question here and going with the numeric consensus, especially if there is a lot of money at stake!!

Probably the same thing as the ERSOP dicussed on the ESOP board: http://benefitslink.com/boards/index.php?showtopic=20693

Who suggested that?

Ok, I did just find where Wyatt "estimated" these amounts at 105/200 for 2005. Does anyone know when the acutal numbers will be out or what the liklihood is of these estimates standing up?

Some versions of the initial legislation specifically regulated/prevented these swaps, but those provisions were not carried into the bill that passes. From that, we can assume that they are still as viable as before (until we know more about 409A), although I understand that the IRS has never approved of them.

Does anyone know whether the $100/$195 limits have changed for 2005?? I can't find this anywhere!! Thanks!!

And kudos to you for such a thoughtful rationalization.

Is a specific provision in the plan document the way to go? How do you handle earnings if you just take the forfeiture? I truthfully believe that everyone can be located these days (you have a SSN for crying out loud) if you try and that the people finder services work well. Actually sending the money to the proper participant/beneficiary has got to beat forfeiting the money and having that hanging over your head forever.

Not to flame, but I am a little surprised that someone as driven as you are to provide "skewed allocations" is worried about a li'l 'ole cutback.

Overly-Clever Promoter Parlance?

No restriction on changing for next year and it should be ok to change 2004 before year end, although if it is not a pure LDY PSP, the IRS may throw down a technical argument that the rule needs to be in place before the beginning of the year. Is there something in the cross-testing rules that prevents use of the top-paid group election?