JanetM

Can't find anything specific to support my answer so here is logic. Correct me if I am wrong. Hardship is inservice w/d just like age 591/2 w/d. Hardship would be treated the same as age w/d. Amount avialable for w/d at time of amendment would be frozen. Not additional contributions would be available for w/d. Is that right?

I would cut checks to those folks for the missed contributions.

Section 411(d)4 was repealed.

Aspen publishing does an answer book. I have it in my CCH library online.

Loan is not protected benefit. 59 1/2 withdrawls are for anyone who is eligible to take one now. You can amend these prospectively, with new money not being eligible for withdrawal. Pretty sure the hardship is protected.

If memory serves me, the only correction is to have the keys pay tax on the contributed amounts so they are not tax deferred.

If the only ones who get bonus are HCE, you can do just what you do now and exclude the bonus from comp.

AndyH, please don't get Ned started.

Can you retiree medical? Use excess assets to fund that.

Yikes, that is even more draconian then SMW. They at least only use the last five years.

Wow, looking at those numbers almost makes the 2005 Sheet Metal Workers UVB of $2,556,022,442 seem like a real deal. Bill is that the WD calc, the last ten years worth of contributions X 128.45%

mjb I agree. But the question I get asked is can they count chore money paid but not reported as income as funding for Roth IRA. I know a few folks who have funded accounts for their kids, and they say the babysitting money is funding it. None of these kids will get 1099 for that.

Wondering how this happened, since you can treat as benefiting anyone who is eligible even if they don't defer and receive match.

It will have to pass coverage. If the NHCE population ADP average is below 4% you will most likely fail.

Earned income is required. No word from IRS on the question of what counts. Does money made for doing chores count since parents don't issue W-2? Draw back is that if you open an account for the child, it belongs to the kid. Any time after the age of 18 they could cash it in. You would have no say in the matter.

Amend the plan to limit the % or $ that HCE can contribute or adopt safe harbor (with no after tax contributions). One other thing is to do preliminary test to see if you will pass, curtail HCEs at this point if you have to.

I would not override the participants election unless it violates a plan provisions, for example one that limits HCE to max %. Your only option is to make refund after you fail the test.

Sure you can open a roth for a minor. You might have trouble finding trustee who will take it.

Sure why not, if you start early and save diligently it can be done. Barring another market meltdown.

The IRS will look at facts and circumstances to. If it were me, I would want advice from legal counsel based on the facts. My view, the health problems may have been the root cause, but this person must be well paid (to have 409A benefits) and have health insurance. Tax leins don't happen immediately nor does bankruptcy. I would be very careful.

Matches what I have see so far.

Here is what the non-qual deferred comp answer book says. Under new Code Section 409A, the plan still may provide for payment of benefits in the case of an unforseeable emergency. This term is defined as a severe financial hardship to the participant resulting from illness or accident of the participant, the participant's spouse or a dependent, or loss of the participant's property due to casualty or other similar extraordinary unforeseeable circumstances arising as a result of events beyond the control of the participant, and the distribution amount may not exceed the amount necessary to satisfy the emergency and pay taxes, after taking into account the extent to which the hardship is or may be relieved through reimbursement or compensation by insurance or by liquidation of the participant assets. IMHO I don't view bankruptcy and tax leins as unforseeable ........... now of course if they are caused by the health problems. But really, to get to bankruptcy and leins they had to have happened a while ago. Just my two cents.

There goes the morning, got distracted by bright shiny thing.

See 411(d)(6)(E)

IMHO I would not use language published in IRS pub dealing with determination letters as if they were instructions for EZ forms. This isn't the first time the IRS has made contradictory stmts. If it were me, I would follow 5500 instructions and continue to file EZ each year until the plan is terminated.