Hoard1

Thanks with some addition research i came to the same conclusion. Looks like Datair has it right!

Datair is only testing employees benefiting for the gateway tests thereby excluding terms because plan does not allocate to them. Additionally, for purposes of 415© Compensation for the 5% gateway they indicate that you can exclude any compensation prior to a participants entry date. I was under the impression that the 5% gateway had to be for all eligible participants and that the 3 times allocation rate was based on employees benefiting. Any thoughts?

My understanding is that Participant with at least 3 years of service must be given an election as to which vesting schedule they wish to be under. For example 5 yr cliff that changes to 6 year graded. I am certain this is something we will get guiadance on soon

So an employer could amend their plan to quarterly and then admend it back to annually and effectively circumvent a participant from taking his distribtuion @ the 9/30/00 value?

What would be timely amended?

An Employer Sponsors a MPPP & 401(k) P/S Plan. Annual valuations @9/30. Participant terminated 1/01/99 choose not to take our his distribution after the 9/30/99 valuation was prepared. On June 6 2001 9/30/00 valuation results were provided to the terminated participant. With the statement was a letter from the Trustee sarting that effective 3/31/01 the plan is switch to quarterly valuations and that to request a distribtuion you must notify the trustee 6 days prior to end of quarter. Does the employee who terminated on 1/01/99 have any protected benefits under the plans? He was waiting for the 9/30/01 valuation to commence distribtuion. I think that the distribtuion rules as of the last valuation date should controll and he is eligible to get his distribution based on 9/30/00 value

I've been away from the board. My Manulife Rep suggested I look at this thread...wow. I too was courted extensively by Nationwide to support their "partnership" program. I listened to their lies and believed a few, I must admit. I am certain that their decision is based on sound actuarial projections on attrition, goodwill and product loyallity and they found an acceptable level of risk to proceed with their franchise model. I believe they have not factored in the following: 1. The power of the interent to connect the pension community like a diamond net of Indra. 2. Brokers reactions to their clients being contacted by selling TPA's. I for one am making this know to all my producers. Picking up new business in their wake. For they listened to the same lies I did. They were loosing market share and were being down graded now they are degraded in the market. Centralized PPA's will be characterized by poor service, high turnover of staff and a disenfranchised client base looking for a way out. Remember BYSIS/American Funds ML/PBC and most recently SmithBarney & Blue Print, Chase & Hancock...shall I continue. Nationwide... I hope your listening for the writing is on the wall and it is too late to take back the spoken word or the spent arrow. You may be watching but we are comming at you from so many dirrections in such numbers it will be impossible to mount a defence. You will be surprised how the market will come willingly to our aid. The market does not care who is right or wrong. The blood is in the water. Instant Karma is out to get you. We should all do our part to help salt the ground of Columbus OH. See you at ASPA!!!!!!!!!

Tom. That's right on target and what I was looking for. Thanks for the help

Tom if you have Time would you look at the Advance Plan design Q & A post of May 27, 1999. I think that there is a difference conclusion to this question. Thanks JTS

Sapose that it was set up with different matches for each related employer who adopted the plan. What about coverage under 410(B)? Would you test the Plan using each seperate benefit right or feature: For Example - Related employer #1 100 ee's 10 HEC 90 NHCE Related employer #2 200 ee 20 HEC 180 NHCE. Each Related emploer has a differnt match rate. To test group #1 would it be: HCE 10/30 = .33 NHCE = 90/270 = .333 Plan passes Is this type of provision permissable in a proto-type document.

Old question that i need to clarify. If Employer establishes a 401(k)Plan with different matching rates of each group of employyes: 1. Must the plan be cross tested under 410(B) and 401(a) 4 2. What test would be required for 401(a) 26? 3. Does tha that provision take you out of a proto type document and create an individually designed document?

DB Plan Terminates in 2000 also in 2000 the Employer Establishes a 401(k) Plan. Will distributions from DB Plan count toward TH status? 416(g)(2)(a)(i) States that Required Aggregation Group is each plan of the employer which Key Employee Participates AND ( not or)each other plan of the employer that enables any plan described above to pass 401(a)(4) or 410. 416(g)(3)(B) State that you need to include distributions from terminated plans which if it had not terminated be included in a Required Aggregation Group. 1.298 of the ERISA Book goes though an example that seems to disregrad the Required Agregation Group Issue and only looks at that the plan covered one key to determine if it is part of the Req Aggregation Group and does not look at the second prong of the test. Any thoughts?

Facts for Summary: Plan Effective: 10/01/96 Compensation Definition Plan Year 10/01 to 12/31 Limitation Year: Calandar Year 1/01 to 12/31 417 Limitation 150000 *3/12 = 37500 $$$ Limit = 30,000 because limitation year is full year 415 Comp for 416 Top Heavy Required Contribution = full 12 months of comp (1/01 to 12/31) because limitation year is full year. Thanks to all who helped on this issue.

My reaseach has come up with the following: 1.1.401(a)(17)-1(B)(3)(iii)(A). 401(a)(17) Comp must be prorated for short Plan Year. 2.415 Compensation (used to base TH Minimum Benefits)is based on full limitation year. 1.415-2(d)(4). There were some threads I saw that gave different answers to these questions. Does anyone have any other throughts?

Addtional Questions? First Year was a short year 10/01 to 12/31 is comp limit prorated for that period? For purposes of 415 comp for top heavy contributions for non-keys is compensation for full 12 months or just from 10/01 to 12/31? Limitation year in document is calandar year. Thanks

Employer failed to make Top Heavy COntributins for 96-99 (Insurance Company Turnkey Arrangement). Adoption Agreement sates that Top Heavy Contribution must be made for all Participants (both key and non-key). As part of self correction could the employer only make the contribution for the non-key? Alternatively, could all of the owners (5% or more) make an election not to receive the TH contribution? Any guidance available?

Are increases in the 415 Compensation limit from 150,000 taken in account for determining persons benefit under a DB Plan? For example: high three comp earned in Plan Years 92-94. In calculating the 2000 accrued benefit can you include compensation in excess of 150,000 even if those amounts were earned in 92-94? Thanks

Is there a cite for that position.

Two thoughts. Could an Employer with only HCE's(four Owners 25% each) establish a 401(k) Plan? If so how would you test? I sapose you could set it up as a safe harbor. Second, what if a Plan lost all NHCE's due to termination or quit. If Plan was using current year method and ther were no eligible NHCE's how would you test. If your ADP for NHCE is zero, if you test at lessor of 2+ or 2* the result would be zero. Any thoughts?

401(k) Plan w/ match. My comment about no employer contribution were that there were no Top Heavy Contributions made. Key Employyees have made deferrals in excess of 3% of eligible payroll.

Did see the interest & forfeiture caculation in Section 3. Appendix C states you can only have 2 SVP failures. In my fact circumstances I have TH failures in 96, 97,98 & 99 (tax form filed but may be able to correct currently). Is this one SVP failure or 3 or 4?

Thanks. I thought I heard Sal Trapolli on an ASPA tape say (I'll relisten to the Tape) that for certain corrections, you only have to provide contributions to employees who are currently employeed. I wonder if this is one of the instances? I don't see any adjustment for interest on these contributions in the Notice. Am I missing something?

Employer is converting from balance fwd valation to daily valuation. They have several CD's with prepayment penalties that will not come due until 12 months from now. Are the CD's considered Securities for purposes of the prohibitive transaction rules? If not, could the employer purchase them @ FMV from the Plan so that the Plan could be fully invested at date of transfer.

Just took over a Plan that has been TH since 1996 and there has been no Employer contributions. Is CAP the only method of correction available?

Does anyone have any guiadance on weather a Plan with a liberal eligibility provision ( say three months) can disregard these participants in trying to determine if a partial plan termination has occured.