JanetM

Normally since the match is the employers money there is no PT if contributions not made when employees get paid. Does your plan actually say the contributions will "post" each payroll or does it say they will be "calculated" each payroll? I

Call around and ask a few accounting firms what they charge. When I was in public accouting the charge varied depending on the type of plan. Was anything from $250 to $2500.

There is no plan design the will allow the HCEs to make high deferrals while NHCEs make low deferrals and pass ADP. They either have give NHCEs a safe harbor contribution or do without. PS it is clients like this that drove me from public accounting in the end.

Be cognizant of the fact that not all job titles are the same job. Look at the underlying duties and such before you apply the data to your own situation.

Two options that I see. He will need to be generating some Schedule C income and sponsoring plan as sole proprieter or Earn some kind of W-2 income from some other plan sponsor and roll the funds to that plan.

Does the plan allow inactive participants to take loans?

I see the first year instructions to override the instructions you site allowing the amount to be paid by the final filing date.

Pulled this from PBGC istructions: Due dates for first time filers New and newly covered plans do not pay an estimated premium by a First Filing Due Date. For a plan filing for the first time, the “Final Filing Due Date” is the latest of the following dates: The 15th day of the 10th full calendar month that begins on or after the first day of the premium payment year, The 15th day of the 10th full calendar month that begins on or after the day on which the plan became effective for benefit accruals for future service, 90 days after the date of the plan’s adoption, or 90 days after the date on which the plan became covered under ERISA section 4021. If the adoption date of a newly created plan covered under section 4021 of ERISA is after its effective date (i.e., the plan is adopted retroactively), the first day of the premium payment year that you use for purposes above must also be used as the premium snapshot date.

Here are the rates, self employed are double the employee rate. http://www.ssa.gov/OACT/NOTES/as115/as115Tbl_IV_1.html

Dave, thank you for the site!

You should dance in the hall. If they are filing as DFE you can simply list that on the proper line, MTIA, PSA, CCT or 103-12, the income goes on single line to correspond with asset and you list one entry and one single dollar amount on D. Life is good.

We had this happen to us couple times. I'm a plan sponsor. Once in DB, I asked for the funds to be returned and as you would expect no money was forth coming. The Company made the plan whole. Once in DC plan, lump sum was paid twice. Recordkeeper made the plan whole. I would ask whose fault this is. Who is doing the administration and who is making the payments. Were the payments not stopped due to an error on the part of admin person or was it someone at the back who forgot to put end date?

Sbart62, if he stays on part time basis while they pay him out his "receivables" then he is an employee and eligible to defer. Are they paying these receivables on W-2? If so there should be no question, he can defer.

If you wait you will the ability to contrbibute for 2005. Do one now for 2005 then save in the coming year for 2006. Get a jump start.

What does the plan consider eligible comp? If he retires in August how can he be eligible for plan?

PiP I do so agree with you, that has save a few folks from sailing off the 4th floor balcony...........

Kirk you could be right, I have a habit of appling logic to ERISA.

Higher wages can lead to higher demand..... which can lead to demand-pull inflation. Isn't that Econ 101?

Okay been reading all the news about MP3 players or iPod players and their earphones. Seems one study done by American Speech-Language-Hearing Assoc. show that many listen for long hours and at high volumes and estimates that 22% of those 20 to 69 have suffered hearing damage form loud noise. Am just wondering, do you think these music devices are the next tabacco. Are we going to have a bunch of 20 to 60 somethings with advanced hearing loss say no one warned them. Will get off my cynical soap box so someone else can use it. Just for the record, I do not own an MP3 or iPod, I hate loud noise and can't stand those earbud things in my ear.

I am not sure of the technically correct answer, but my gut feeling is to only allocate those forfeitures to the particpants in the plan that those forfeitures occured in. Gut reaction coming from exclusive benefit rule.

I totally agree with QDROphile. How can someone making $7.50 an hour (like many of our folks due in rural areas) save for retirement and HSA? They're only making $15,600 and we expect them to sock away over half. Ain't gonna happen unless the wages in this country significantly increase, which will cause inflation, which will cause health care costs to increase. These are only good for the upper income bracket, not the bulk of the country.

Qualified leave of absense can suspend payments for one year. Final regs - 72p1 - under Q&A Q-9: Does the level amortization requirement of section 72(p)(2)© apply when a participant is on a leave of absence without pay? A-9: (a) Leave of absence. The level amortization requirement of section 72(p)(2)© does not apply for a period, not longer than one year (or such longer period as may apply under section 414(u) and paragraph (b) of this Q&A-9), that a participant is on a bona fide leave of absence, either without pay from the employer or at a rate of pay (after applicable employment tax withholdings) that is less than the amount of the installment payments required under the terms of the loan. However, the loan (including interest that accrues during the leave of absence) must be repaid by the latest permissible term of the loan and the amount of the installments due after the leave ends must not be less than the amount required under the terms of the original loan. (b) Military service. In accordance with section 414(u)(4), if a plan suspends the obligation to repay a loan made to an employee from the plan for any part of a period during which the employee is performing service in the uniformed services (as defined in 38 U.S.C. chapter 43), whether or not qualified military service, such suspension shall not be taken into account for purposes of section 72(p) or this section. Thus, if a plan suspends loan repayments for any part of a period during which the employee is performing military service described in the preceding sentence, such suspension shall not cause the loan to be deemed distributed even if the suspension exceeds one year and even if the term of the loan is extended. However, the loan will not satisfy the repayment term requirement of section 72(p)(2)(B) and the level amortization requirement of section 72(p)(2)© unless loan repayments resume upon the completion of such period of military service and the loan is repaid thereafter by amortization in substantially level installments over a period that ends not later than the latest permissible term of the loan. © Latest permissible term of a loan. For purposes of this Q&A-9, the latest permissible term of a loan is the latest date permitted under section 72(p)(2)(B) (i.e., five years from the date of the loan, assuming that the replacement loan does not qualify for the exception at section 72(p)(2)(B)(ii) for principal residence plan loans) plus any additional period of suspension permitted under paragraph (b) of this Q&A-9. (d) Examples. The following examples illustrate the rules of this Q&A-9 and are based upon the assumptions described in the introductory text of this section: Example 1. (i) On July 1, 2003, a participant with a nonforfeitable account balance of $80,000 borrows $40,000 to be repaid in level monthly installments of $825 each over 5 years. The loan is not a principal residence plan loan. The participant makes 9 monthly payments and commences an unpaid leave of absence that lasts for 12 months. The participant was not performing military service during this period. Thereafter, the participant resumes active employment and resumes making repayments on the loan until the loan is repaid. The amount of each monthly installment is increased to $1,130 in order to repay the loan by June 30, 2008. (ii) Because the loan satisfies the requirements of section 72(p)(2), the participant does not have a deemed distribution. Alternatively, section 72(p)(2) would be satisfied if the participant continued the monthly installments of $825 after resuming active employment and on June 30, 2008 repaid the full balance remaining due. Example 2. (i) The facts are the same as in Example 1, except the participant was on leave of absence performing service in the uniformed services (as defined in chapter 43 of title 38, United States Code) for two years and the rate of interest charged during this period of military service is reduced to 6 percent compounded annually under 50 App. Section 526 (relating to the Soldiers' and Sailors' Civil Relief Act Amendments of 1942). After the military service ends on April 2, 2006, the participant resumes active employment on April 19, 2006, continues the monthly installments of $825 thereafter, and on June 30, 2010 repays the full balance remaining due ($6,487). (ii) Because the loan satisfies the requirements of section 72(p)(2) and paragraph (b) of this Q&A-9, the participant does not have a deemed distribution. Alternatively, section 72(p)(2) would also be satisfied if the amount of each monthly installment after April 19, 2006, is increased to $930 in order to repay the loan by June 30, 2010 (without any balance remaining due then).

DP, Nope you don't have to change your quarterly filings. I would contact the CA Society for CPA to find help. http://www.calcpa.org/home.htm is their web site.

YIKES The W-2 is not affected. You have to get the contribution to the Trust before the Plan Sponsor can file their tax return and claim the deduction. Not sure about your TPA, seems they are using the wrong words. The contribution is a contribution to the participants. The Company and deduct on their tax return, and the plan shows it on its 5500.

Nate just curious, if plan doesn't exclude them do those non US employees with no US income have any compensation as defined by the plan. You could end up covering them, but depending on definition of comp they may have $0 in income.