pmacduff

moved to 401(k) forum......

I have a large plan that is split into 5 divisions. My question is pretty basic...when I put employee numbers into Relius can I have employees under different divisions that have the same employee number? I was thinking that Relius is SSN driven for the participants so I should be ok. There are a number of them though so before I did all the imports and data entry I wanted to check with others. FYI - what usually happens to me - I answered my own question just after I posted: I was entering a rehire & tried to put her employee number in. That number was already used by someone in another division & the system said "NO - eenumber already in use"

Have a plan participant (non owner) who turns 70 1/2 in August of this year (2013). 1st RMD from the plan would be due by 04/01/2014 and another by 12/31/2014, Participant is still currently working but planning on retiring in July or August of this year. If he retires in July or August, is the plan required to pay the RMD before he rolls the balance out? Participant wants to roll the balance without the RMD and I believe the Plan must 1st pay the RMD and then he can roll the remaining balance. Can anyone give me the applicable reg section?

no, but it seems somewhat ridiculous to me to have the 3 pages followed again by all 3 pages. edit: I found the instructions (see attached). Oddly enough they want just the first 2 pages which is even more outrageous to me since the form is only 3. DOC050313.pdf

ok - I know this should be pretty basic, but am wondering what others think. Since the 5500 SF form for 2012 has the signature on the first page now (yay) are you only attaching that page as the "manually signed 5500 attachment" for EFAST? It seems logical to me that would be the case, but being in this industry over 20 years I have learned that logic does not always rule. I couldn't find "current" 2012 form instructions on point on the EBSA website. The FAQs explanation is still the old one that says to scan and attached the first 2 pages. The whole thing about attaching the first 2 pages always threw me but I rationalized that perhaps that was because the SF was signed on page 2. The 5500 has been a page 1 signature for as long as I can remember, though....SIGH

The IRS agent said that basically there is no difference in the case we were working on...& that you can't really have 6 "consecutive" months of service as your definition because under elapsed time (and in conjunction with the service spanning rules) it won't work. You'll end up counting the time they were gone anyway. Most entered on odd rehire dates as in Kathy's example. In this particular plan doc the "consecutive" was actually not a checkbox option but was typed in under "other". No hours requirement, though.

We just went through an IRS audit with a client who had 6 "consecutive" mos eligibility and employees that come and go due to the nature of the business. The agent checked the employee/participant data very carefully with regard to the service spanning rules. Thankfully there were very few people "missed" but they did make the client go back a few years, double check and correct all under SCP. That being said - I agree with BG5150 on the 01/25/2012 entry date because I had to check a LOT of people for this audit....

The Company wanted to get Execs in within 6 mos (used to be 1 YOS, 12 mos, 1000 hours) but didn't realize the impact on the NHCE population. No issues with vesting - this person has never had 1000 hours in any plan year (vesting is based on 12 mos 1000 hours). No 1 yr holdout. The corrective QNEC will be 100% vested anyway Thank you!

I think that section is the "service spanning rule". If applied I think this employee would have entered the plan on 02/03/2003 when he was rehired and age 21. But there was a break of approx 3 1/2 years between the 08/13/1999 date and the 02/03/2003 date. I'm just confused at this point. Tom - I noticed you didn't weigh in on an entry date?!?

I'm resurrecting this thread. Calendar year Plan has 6 months elapsed time eligibility, age 21, quarterly entry dates. Here is the participant data: date of birth is 05/15/1981. Original date of hire is 07/13/1998. hired 07/13/1998 Termed 07/31/1998 rehired 07/05/1999 Termed 08/13/1999 rehired 02/03/2003 Termed 02/07/2003 rehired 06/02/2003 Termed 06/27/2003 rehired 02/16/2004 Termed 02/20/2004 rehired 06/07/2004 Termed 06/25/2004 rehired 03/23/2007 Termed 03/28/2007 rehired 06/18/2007 Termed 07/20/2007 rehired 06/02/2008 termed 06/27/2008 rehired 06/08/2009 termed 08/14/2009 rehired 11/12/2012 Question of the hour...when did this person enter the plan?

ok - I know short plan year vesting credits have been reviewed before. This relates to anyone who is not yet a participant when the short plan year occurs. For example, off calendar plan PY ends 10/31/2012. I'm hired 01/01/2012. Short plan year is 11/01/12 - 12/31/2012. Let's say for argument sake that I worked 1000+ hours from Feb - Oct 2012 and with the plan year & entry date change I enter the plan as of 01/01/2013. Do I get the "extra" vesting credits that active participants realize for the overlap period of the short PY if I continue to work (and over 1000 hours each 12 mos)? I believe that vesting credits/vesting periods are a separate issue from eligibility and that an employee can be earning vesting credits prior to participation (of course depending on the Plan Doc). Someone else has opined that they believe the short plan year has no effect on the vesting calcs for the person who was not yet a participant when the short plan year occured.

perhaps you can't put in the "for" period on EFTPS. The client total me ( ) they were submitting through EFTPS for 4th Q 2012. I have been on the site but have not actually done any submissions myself, so I wasn't sure. Thank you for your thoughts, I'm in agreement!

I'd like other's opinions...Plan did a payout in December of 2012. Check for participant and check for withholding were cut in 2012. Plan investment statements show the disbursement in 2012. This was not the only payout in 2012. Plan fits into the monthly filer definition. The tax portion of the payment was made in January of 2013 to the IRS via EFTPS. For completion of the #945 - total withholding for 2012 was over $2500 and therefore must be broken down by month. The Plan assets say the tax withholding was done for in December and the tax payment made in January 2013 was coded for the 4th Q 2012. Is it ok to put the tax amount under December on the #945? I really think I am overthinking this whole thing, but don't want the client to get a letter saying that the taxes weren't paid in. I think as long as the tax payment was coded for the 4th Q 2012 and was not late, it should be ok, but you never know with the government!

I administer a PEO MEP plan (which BTW has been audited by the IRS 3 times.) The top heavy testing is done on each individual employer. I assume from your post that there are only 2 Employers within the MEP; therefore no controlled group or else you wouldn't have needed a MEP. There are employees (some key) that are under more than one entity in the MEP I administer. So...each employer is tested on the information (i.e. wages, balances, etc.) for only that one employer. Can get kind of crazy if the individual's balance is not segregated between the 2 employers. You'd want to be sure that was tracked somehow even if outside the pension software on a spreadsheet or something similar. I think you can find a lot of cites in Derrin Watson's "Who's the Employer" book. There is also info on this website under Derrin's Q&A section which I have found to be VERY helpful.

Not sure if this helps you - but the loan policy that our clients use states that all loan repayments must be made via payroll deduction. A participant out on disability cannot pay via payroll deduction and therefore is not eligible to take a loan because they cannot make the repayments according to the loan policy. The policy also has the language that you mention regarding "creditworthiness and ability to repay". We haven't had any problems with this thus far and have had several plans audited (which of course entailed review of the loans as well as the Plan Docs). Just another thought...does the plan allow for hardships? I find that since participants are out on disaibility for medical reasons; they can more often that not meet the "unreimbursed medical" hardship safe harbor.

Good thought Bird on the verbage...I was trying to find a better way to say it and I like the "not applicable" as opposed to the "not needed" for the Plan year. After reading through what I sent to him from Sal's book (including the example), the attorney "agreed with" my analysis and understood my position. Whew! Thanks for all the input. I hope everyone has a safe, happy & healthy New Year!!!!

This attorney's issue is that the Plan Doc states that the Plan will use the top paid group election. He didn't like the fact that the client was responding to the auditor by saying that the TPG election was not needed in 2010 because there were only 38 HCEs by definition and those 38 were all included in the EOY 2010 testing; which passed. This attorney is retiring as of 12/31/2012 but finishing up the audit work with the client. The Plan Doc is a well known vendor's non-standardized 401(k).

Yes - I agree with everything you said. Now I have to get the client's attorney to understand. The Plan is under IRS audit for the 2010 plan year. One of the things the auditor is asking the client to respond to is the fact that the Plan Doc states that the top paid election will be used. I advised the client that there were 44 to be considered in the TPG for 2010 based on the 2009 information, but that the TPG election isn't needed in 2010 because when we got to the end of the plan year there were only 38 HCEs. The client was including that in the response to the IRS audit followup. The attorney is telling the client that because the top paid election is in the Plan Doc, it applies. I cannot seem to get him to realize that we can't add 6 people to the HCE group from the NHCE group to get to the 44 count. I read over the IRS notice relating to the TPG election and there isn't anything specific I can send the attorney to make my point! I did send him some information from Sal's book and one example that states you don't add people back in, hopefully that will work. The sad part is that the IRS auditor will understand and be fine with the client's repsonse. The attorney is the one who is creating an issue. Thanks again

The 44 comes from the prior (2009) count of 219 times 20% = 43.8 rounded up to 44 people to count in the top paid group election for 2010. Now - when the actual ADP/ACP testing is run at the end of 2010 there are 38 highly compensation employees by definition. Since the top paid election is written into the Plan Doc - do I HAVE to move 6 NHCE employees to the HCE group to test for 2010? Those NHCE employees are not HCE by any definition. I'm trying to convey to the attorney that the top paid election is utilized if necessary, but you don't have to move up 6 NHCE employees to equal 44 if your test is already otherwise passing.

I need help!! I have a plan where the top 20% election is written into the Plan Doc. Based on the 2009 data, there would be 44 people in the top paid group for 2010. At the end of 2010 when the 401k discrimination tests are run there are only 38 HCEs in the test. The test passes. I thought that it was ok to leave the test as is...the client's attorney (not an ERISA attorney) is saying that we need to add in another 6 people from the NHCE group to have 44 in the upper group because the top paid election is in the Plan Doc. I thought the top paid group election was utilized in order to "reduce" the number of HCEs that have to be considered for the 401k testing which would therefore "help" the test when necessary. If I had 50 people in the HCE category at the end of 2010, I could consider only the top 44 in my HCE group for the 2010 test. Am I ok with only 38 HCE in my 2010 ADP/ACP testing? Thank you in advance.

Yes because both are IRS Code 7 (Normal distributon) with total gross in the total spot & taxable spot and total taxes in the withholding spot.

IMHO you leave those funds already in the plan in the cash account and apply them toward the current month's contributions as they accrue. You're only talking about a month anyway, right? I've always been told that the IRS/DOL do not like to see funds leave the plan and return to the Employer. I know others will disagree because this particular situation does not impact participants (since they have received their proper allocations).

That's strange...I know that EFAST won't take a filing without the "Plan Administrator or Practitioner" signature, but I've never had a problem with omitting the "Plan Sponsor" signature. That's how 99.9% of our clients sign. In fact, it has been the other way around for me- where if the "Plan Administrator or Practitioner" signature is missing and the client signs as "Plan Sponsor", the filing rejects.

I don't know about free, but you can get ethics credits through the CE exams from the former Pension Journal which is now the Plan Consultant. The exams are on the ASPPA website. You order and pay for each exam and then take the exam either online or you can still send in a paper copy for grading. Online is nice because you know right away if you pass. You have to find one that qualifies for ethics credits, but that's how I got mine this cycle.

There is an interesting write up by Derrin Watson...if you go to the Q&A columns on these boards and look at the last post from Derrin regarding MEPs. I'd provide a link but I'm not sure how to do that!