pmacduff

I don't agree. The prior year testing % for the NHCEs is determined on 12/31 of that year (12/31/2006 in this case) and is already in place when the next plan year begins. That's one of the whole points of prior year testing - so that the HCEs know what they are limited to as the plan year begins.

FWIW, I agree with you - the prior year % is whatever it was and unrelated to the comp definition change for the current year...

we had a broker try and sell this idea to a client that failed every year as a way to save the deferral refunds. We luckily prevailed in advsing them against it, but it was a tough sell convincing that it wasn't it good idea.

FWIW we had client under a DOL audit (a number of years ago) and the DOL was quite specific that their position was that the distribution fee was NOT part of the taxable amount. The DOL then checked each plan distribution/1099-R explicity for this issue. I realize that's not a formal position, but think it does point to the DOL view under audit...

Just another one of the things we TPAs confront that seems to have many different interpretations! FWIW the few times we have had this come up; we explain the last day rule and doc language to the client and then let them tell us. Anyway...back to the original post for a moment re: Relius...if there is a 12/31 term date coded in Relius and you have the "X" in the allocation field in specs, Relius will not give that participant an allocation, even tho they may be entitled. I delete the term date, run the allocation then put the date back in to print off the census/ee status reports. However, be mindful that you made the change if you have to reverse and rerun the allocation for any reason.

What about a separate mailing to the Social Security Administration with an explanation and a listing (or even duplicates of the Schedule SSA pages). At worst you may get a response on the proper procedure and at best maybe that will take care of the issue. As WDIK asked; how many are we talking about......

I believe you mean rehired February 1, 2008 - but FWIW I say employee starts over from new hire date because they were never a participant. What exactly are the entry dates?

Thanks Janet, that was my feeling as well. We do know where the beneficiaries are in this case so I'll probably be reporting it as a "D" on the Schedule SSA in the not too distant future anyway as it will get paid out.

I have something I cannot believe has never come up before: Deceased participant (2006) still has a balance in the Plan. Is this reportable on the Schedule SSA? I was always under the assumption that the SSA was used by the Administration to inform participants of a possible benefit in a retirement plan when the participant applied for Social Security Benefits. This participant will obviously not reach that point. Would the Administration notify whoever applies for any Social Security benefits on behalf of the participant? added twist...original beneficiary was spouse, spouse was convicted of participant's murder. Participant has minor children and client believes court will award the minor children/their guardian to receive benefit.

Report it as you would if you had the 1099-R form. This was a convoluted system that the gov. came up with many years ago and we TPAs have been dealing with ever since! The 1099-R does not need to be filed with the return so when the participant receives the actual form next January it will be coded with a "P" (for previous, meaning taxable in 2007). That form should be kept with the participants 2007 tax return. Hope this helps. Thankfully this procedure is going away under the new regulations!

ok - I need HELP (probably much more than this !? but that's another story)... Off calendar plan year 07/01/2006 through 06/30/2007. ADP fails - HCE who contributed $7800 for the plan year is due a refund of $4,012.80. He is over 50 so $4,012.80 is reclassified as catchup; no refund necessary; so far so good. Plan year is switching to a calendar year for 2008. I am completing a short plan year val from 07/01 - 12/31/2007. HCE mentioned above contributed $3,750 from July - December '07. Short Plan year ADP fails - software reports refund required to said HCE of $2,003.30 and then recharacterizes the $2,003.30 as catchup and reports there is no refund due. Is this accurate?? OR is $987.20 of the 2nd test refund allowable for catchup reclassification and the HCE must take an actual refund of $1,016.10 plus G/L? Thanks in advance.

minor correction...I don't think the Social Security Administration sends out notices. They wait until a person applies for their Social Security benefits and then advise them that they MIGHT have a benefit in "such & such" a plan based on the SSA data. I've recently had a minor "rash" of these come up with a few different clients. Luckily all had either the balance still in the Plan or forfeiture account enough to cover the payout. All were legit, though, believe it or not and had not previously been paid out. I was amazed.

UPDATE: I wanted let raleightpa and others know that JHancock has posted the 2007 Sch D conversion tool in its TPA website. I ran through a quick import and it worked fine for me. I did not check in detail yet, but everything seems to be fine...

FWIW - I would think that such an out and out lie as you describe is enough to discourage you from even thinking of taking them on again as a client. I know we would not touch this with a 10 ft. pole in our company. my 2 cents

Glad to be of help! I think we have to know as much about software as administration so anytime I can help someone and feel a bit of satisfaction it works out for all !

Sure - I'll let you know when I do my 1st for 2007. (I'm actually having a carryforward issue that Relius told me may not be fixed until mid-February so I have to enter filer data all over again when I go to do a form!) Anyway, after you hit "append" it will only look like there is one entry on page #2. This is where you want to use the "sort" option from the Edit menu and once that is done it will complete the form. I sort by the PSA name, but I suppose you could use any of the sort options (never tried.) Give this a try with the 2006 and let me know if it will work for you. Also - when I went in to look at an '06 Sc D so that I was giving you the right information, I remembered even another step that seems as though it was unnessary for you, but I want to share for anyone who may need to know: For my Sch Ds to be accurate I actually have to go in and "delete" the Sch D (if there is a carryforward from the year before) and start with a "fresh" one in order for my import to work. Good luck, keep me posted and I'll let you know about the '07 as soon as I can...

Ye s- try the cursor on line 2 of the second page instead of line 1. I think that's what I do...sorry maybe this is another little change I do without thinking... Good Luck!

Don't want to sound brash, but did you follow the manual exactly? I know there is a step in there where you have to click on the "sort" button, etc. or are you not even getting that far? Which page is "still blank"?

I usually download the conversion tool each year, even if no changes are made. I haven't done any for '07 to let you know if that's working ok; sorry. I'll post on that as soon as I can... The modification I make is to insert a blank line in the top of the post conversion spreadsheet and then resave it. I've had to do this for the last few years and not sure why, but once I do that, the import works. let me know if this helps.

I use the Schedule D conversion tool and I LOVE it! I have to make a minor modification to the spreadsheet file and add a line at the top in order to import properly, but other than that, it works well. I also add up the totals on the Schedule to be sure that they match the spreadsheet, I don't know of a way to sum them in Gov. Forms but it is still way faster to import and you can't miss any of the funds. I have found that the totals on the hard copy Schedule A include receivables whereas the totals on the breakdown of funds do not. Hope this helps. Let me know if you have any questions and I'll do my best to assist. There is a Schedule D manual on the JHancock website (I think) for a couple different vendors including Relius.

I couldn't seem to attach the instructions... if you go onto the irs.gov website to forms and publications, I think the information you seek is in the 1099-R instructions (assuming Roth deferral into a QP???). anyway...they have added various codes for distributions from Roth accounts. Hope this helps.

FWIW, I say he needs 1000 at each entity if that's what each plan requires. For example, I think it wouldn't work if he had 1500 at one and 500 at the other.

It was interesting for me to read through this post because we began asking about an Am. Funds link for Relius over 7 years ago!! After repeated inquiries, I was given the answer that Am. Funds did not want to incur the cost of settting up their platform with Corbel. It's another way they claim to keep their costs down over other vendors. While I'm sure that there are numerous other factors at work here, I imagine that the cost to the investment vendor has probably not decreased in the last 7 years!

we have a similar situation with a client that has truck drivers. The drivers are paid by the load and deliveries, not hourly. But the client knows who is "full-time" and who is part-time. They apply a consistant amount of hours based on the number of days worked for those who aren't full-time. The plan has never been audited, but I believe as long as the client is consistant and applys everything uniformly for each employee, they will be ok. In your situation, perhaps they could assign an average number of hours for each task and apply it accordingly?? How specific is their plan doc with regard to eligibility and vesting?

Your plan document should tell you. In most of our documents if the person does not meet the initial eligibility then the computation period for that person switches to the plan year. The employee then needs to work over 1000 hours in that plan year entering on the following January 1 for example in a calendar year plan. Hope this helps.