pmacduff

Pax - I'm glad that they also provided the "Gift Bag Q & A" - valuable info I wonder how many people affected by this would actually be on the IRS website looking for this information..............?!?!? It was good to have a chuckle this afternoon; Thanks!

can the document be amended to pay fees with forfeitures? I can't imagine that someone is going to help terminate for free...

why are you performing the ADP/ACP testing on a safe harbor plan?

ok - this one goes back a ways...I know there were posts, but have been unable to find them... What, if anything, would happen if an Employer was making the 401(k) deposits on say, Wednesday, but the actual payroll check date is Friday? Wasn't there something in the Regs about this being a "bad" thing because participants were receiving an allocation to their 401(k) account prior to actually receiving their payroll $ ? Most paychecks checks are paid for time worked, so the employee has earned that money already. Any & all thoughts appreciated.

#29 must be Bonnie & Clyde, then, right??

I believe #18 is a horror movie like maybe "Halloween"?

Thanks all for your replies... Mike - your suggestion is the easiest and I will use for this case but Tom I'll also try your suggestion for Relius as well, just to see if I work it out and for future reference and use. Thanks again!

This plan did fine last year with cross-testing with the goal to get the most $ to DAD of the contribution . For the current PYE, they lost a NHCE who was younger and increased salaries on the younger sons (who are owners). I gave everyone 5% except Mom & Dad (who are 63 and 66 respectively) and gave them 15%. All of my tests fail miserably no matter how I run (accrual vs. allocation), etc. (I use Relius) Here are the demographics: HCES: SON - AGE 33 COMP $150400 - GREATER THAN 5% OWNER SON - AGE 39 COMP $168600 - GREATER THAN 5% OWNER SON'S WIFE - AGE 47 COMP $13,000 - OWNER BY ATTRIBUTION MOM - AGE 63 - COMP $9600 - GREATER THAN 5% OWNER DAD - AGE 66 - COMP $147000 - GREATER THAN 5% OWNER EMPLOYEE - AGE 36 - COMP $91828 - HCE COMP > LIMIT IN PRIOR YEAR - NO OWNERSHIP NHCES: EMPLOYEE AGE 31 COMP $48443 EMPLOYEE AGE 55 COMP $51571 EMPLOYEE AGE 59 COMP $56606 I'm thinking maybe I'm not using Relius correctly to test because it seems like if I give everyone 5% except Mom & Dad, I should pass easily. What am I missing? Any suggestions appreciated!

I don't think you need a complete set of new loan forms, but what about a one page amendment to each loan specifying that the Company changed payroll frequency and what the new per payroll amount will be? Perhaps also add a line that no other terms of the original loan application and forms were changed. Then have each participant sign off?

Thank you for the replys. Tom I see what you are saying...my edition of the ERISA Outline book is a few years old, and that was where I read that the ADP must pass both "prior to" AND "after" shifting. I was stumbling there because I was thinking that my catchup contributions aren't really catchups until my ADP fails. I have plenty of "wiggle room" for the catchup in this plan, and I need to shift less than 1% from ADP to ACP in order for the ACP to pass. ADP then passes also (again with catchup recharacterization, but alittle bit more than intially). I'm gathering that I'm ok on this one and the HCE need not forfeit any match... Thanks again!

Ok - I'm new to "shifting" so bear with me please... I have a plan that fails ADP, only 1 HCE and he's over 50, so the refund amount is recharacterized as catchup. Now; the ACP also fails by a very small amount so I wanted to shift some ADP to ACP. The ERISA Outline Book says I can only shift if the ADP test passes both before and after the shift so... will this work in my situation or am I out of luck? Thanks in advance!!

Archimage - one of the things we're addressing is the distribution issue since a participant can't roll Roth $ into a traditional IRA. Plus there may be participant who will choose to contribute both before tax and after tax $. In the "old days" where you had one rollover distribution to process if the participant left, you will now have at least 2, one to the Traditional IRA and one to a Roth. It may not seem like much of an issue, but in our small operation where we process what seems like a "gazillion" distributions, it's just going to add to the burden of distribution processing. In those plans that allow distribution upon termination, we could end up doing four distributions if the participant is contributing right up until their term date.....whew!! You're right about the administration itself or recordkeeping, though not being too difficult. I figure you just add a source and track it separately.

Thank you!!

We have a PEO client with a Mulitple Employer Plan. They are signing on a new client, and the client is asking...under what section of the code does it state that the portion of a participants income that is 401(k) (CODA) contributions is exempt from Federal and State taxation, but IS subject to FICA taxes? I have found references in the Code that state "CODA contributions are not currently includable in income", which explains the Fed. & State deferred taxation, but does it explicitly say anywhere that they ARE subject to FICA? It seems to me that this is more of a payroll question than a question for us as TPA, but I was also curious.....

Hey Tom - just wondered...how it is going on version 10? I'm still on 9.1.4 and afraid now will have to wait until at least most of my year-end work is done to upgrade....Patti

Ahhh - Mr. Poje hit the nail on the head for me..."I think the difference is that otherwise excludable deals with eligibility to enter the plan". How can you exclude someone who has already entered the Plan? I wonder of any of these suspicious 401(k) tests (as in my takeover plan) have undergone the scruinty of an IRS or DOL audit...ummm...

rc - I'm right behind you with 16 years...it was funny you should mention this particular situation. We took over a plan in '05 and when I reviewed the '04 testing, I found the same thing, participants who were previously in the Plan, terminate with less than 500, show up in the prior TPAs test as statutorily excludable (say that 3 times fast!). In any event, I too was baffled, this was not a small TPA firm....what's going on?!?!?

thanks crosseyedtester - didn't mean to be picky - just wanted to be sure I wasn't missing something...

"and they are rolling over their balances into IRA's, so there will be no 1099." Shouldn't there be a 1099-R form for each with a code of "G" for rollover to an IRA? - why no 1099-R?

IMHO he was already 100% vested the first time around & did not experience the 5 breaks-in-service, so he remains 100% vested. Doesn't the plan doc address this issue in the any of the "upon rehire", "break-in-service" or "vesting" sections?

Thanks Tom!

Hi everyone...I'm working on a census report and I want it to show the "reason not eligible" element for the ineligbles. I can't seem to find a database field that will work. Does anybody know the table/field that I can use to get this info to print? TIA for any suggestions.

Tom - I'm still on 9.x also, but thinking I might want to go to 10.x now, instead of waiting until after the first of the year. I was reading over some info on the upgrade and see that 10.x uses Crystal version 10.0. My Crystal version is 8.5, so I need to do some upgrading there as well. It looks like you can upgrade custom Crystal reports alittle easier that you could before, so there's a positive!!! If I proceed with my upgrade shortly as planned, I'll let everyone know how it goes....................

This was too cool, I was able to use the zip file in this thread and Tom's Crystal report on the other thread and save the *.rpt file. Good to know in case I ever need to post a Crystal report or hopefully help someone out with one. BTW - I used WINZIP and it worked great. I'm one who owes Tom a smile but only because he didn't actually see me smiling in his ASPPA seminar presentation (there were quite a few of us in the room at the time - all smiling - Tom is quite entertaining as well as educational you know !!) [meant in the best of spirits, Tom!]

If you only have the one entry date then it would seem to be correct. The employee had >500 hours, but he doesn't hit 6 months until 02/22/2005, thereby moving his entry date to 01/01/2006. I don't know why you would only have 1 entry date with a 6 months service requirement, though...