pmacduff

all eligible participants

I beg to differ on the portion of your sentence, "those payments are all made back into the 401(k) with after-tax dollars. Then, when you retire and take withdrawals, you pay taxes yet again." I agree that is true with the interest, but when you take a 401(k) loan of deferrals or employer monies, you have not yet paid taxes on those funds. Perhaps an example will show it best... you defer $5000 from your check. (no income taxes paid yet on those dollars, right?) you borrow $2500 from your deferrals. Do you pay income tax on the $2500 when you take the loan?...NO! You pay back $2500 plus interest. Even though it seems as though you are paying the $2500 back with after tax $, you have yet to pay any taxes on the original $2500 you are repaying the original tax deferred $. I agree that the interest payments are made with after tax $. In a perfect world, we administrators could all track the interest payments on every loan from inception and when a distribution is ultimately made to the participant, you could separate the interest payments as after tax $ in the distribution. I don't believe that there are many out there who are actually reporting it this way. In any event, once you have paid back the $2500 to your account, it is back "intact" and you will not pay ordinary income taxes on it until it is distributed to you.

You never paid tax on the loan principal, only the interest payments you have made. People make the incorrect assumption that the loan payments are after tax, but the principal payments are not. Therefore, when the monies return to the plan as payments, you are only "replenishing" the principal which, as I mentioned, was never taxed to you to begin with. If you default now, you not only have the 10% penalty, you will pay the ordinary income tax rate....the theory of paying the loan back and taking the monies when you retire makes an assumption that you will probably be in a lower tax bracket at retirement, therefore your ordinary income taxes on that principal amount will be lower than they would now. You will also avoid the 10% tax at retirement (assuming it's after 59 1/2). Hope this helps.

1.085 "to the 22nd power", right Tom?

Hi Africa - I'll let you read it for yourself...here are the instructions...nominee returns are addressed on page 6 of the general instructions...

My two cents says no because the participant already reported and payed taxes on the amount when he/she filed for 2001. If you are defaulting the loan with a distribution payout (in other words, together) and the participant has enough cash balance to withhold the mandatory 20%, then you figure the withholding on the entire balance. But again, that's when it is happening at the same time.

Tom - just for a chuckle I thought I'd tell you...you know how the messages appear in your e-mail, don't look quite the same as they do on the boards directly, right? Well when I first looked at mine of this thread, I was horrified to think that someone would write something like the beginning line in your post, even if it was in fun - what a relief to find it was you poking fun at you!!!

I've had that happen to...do you still have the original report before you made changes? Maybe you can try deleting one field at a time...If I recall, sometimes it was the client and/or plan name that I deleted and Relius couldn't access the data. Tom Poje on these boards has been a tremendous help to me in the past with Crystal issues, if he doesn't read your thread, you might want to try sending him a message directly. He's the moderator on the "crosstested" plan board. Sorry I couldn't be more help.................:confused:

I'm no Crystal expert, but I think if you click on "verify database" from the database menu. Sometimes with the Relius updates they change variables in the database and Crystal doesn't know where to find them. If you verify the database to update the tables in your report, it might work. Hope this helps. Patti

FWIW - I asked this in a prior thread and was told that as long as the document does not specify %tages for groups, you can get away with giving the TH only person the 5% gateway, no need to do 8% provided the testing passes. As a caveat, however, I was advised to be sure that the plan document did not refer to the gateway in specific terms which might dictate this issue and require 8% to the participant eligible for TH.

I am offering up this file with the different State withholding on distributions because I know that this time of year I seem to get many requests for it. Hope it's helpful..........

The Plan Document will tell you................

Weren't the assets segregated within the plan when the QDRO was initially processed? If not, can't you just segregate the assets within the Plan itself? I'm no QRDO expert, just some "food for thought".

Ed - There is a "supplemental notice" that must be handed out 30 days prior to the plan year end telling the participants the employer's decision regarding the safe harbor contribution. I don't know how your original "maybe" notice was drafted, but, for example, the one that we have has the supplemental notice on page 2 of the original SH notice with 3 options...1.) Employer has decided not to make SH, 2.) decided to make 3% safe harbor or 3.) decided to make contribution of _______%. The employer completes, signs, dates and distributes this supplemental notice to all participants.

Brian - try this.... http://benefitslink.com/boards/index.php?showtopic=17117

Yes - top heavy is required to be on whole year's comp...........

Cathy - I responded to a similar thread back in July. I wanted to attach a link to that thread, but I don't know how to do it! If you search the July threads under this same topic (Plan Administration & design>form 5500) you can probably find it. The 5500EZ instructions are pretty clear...you do need to file a final.... hope this helps. Patti Actually it was August 1st

This is from the form W-2 instructions: Retirement plan. Check this box if the employee was an active participant (for any part of the year) in any of the following: 1. A qualified pension, profit-sharing, or stock bonus plan described in section 401(a) (including a 401(k) plan). 2. An annuity plan described in section 403(a). 3. An annuity contract or custodial account described in section 403(B). 4. A simplified employee pension (SEP) plan described in section 408(k). 5. A SIMPLE retirement account described in section 408(p). 6. A trust described in section 501©(18). 7. A plan for Federal, state, or local government employees or by an agency or instrumentality thereof (other than a section 457 plan). For information on the active participant rules, see Notice 87-16, 1987-1 C.B. 446, Notice 98-49, 1998-2 C.B. 365, section 219(g)(5), and Pub. 590, Individual Retirement Arrangements (IRAs). I don't have the time this minute to check out the cites^ but there they are in the instructions.................

I could be wrong, but I think the last info I read said to go to your Plan Specs "miscellaneous" section (I think it's the last group) and you can code your default orientation there. I haven't checked it out yet...hope this helps!

fidu - Is it possible that you are confusing the fact that the Plan is not required to withhold the 10% upfront? (only the 20% mandatory Federal is required to be withheld). But when the individual files the 1040 return, they are required to report the Qualified Plan distribution and there is a line item for the 10% excise tax if the taxpayer is not yet 59 1/2. Could this be the issue?

2much - doesn't the plan allow for in-service distributions after attainment of NRA? Maybe our plans are unusual, but most of them allow for that and, in your instance, we would try to distribute the minimum + balance and be done with it even if the participant was still employed.

Thanks for the detail MGB - I was confident in the old rules which, as you say, have been in effect a long time. With all these new things changing..I thought maybe I had missed something !

If you're referring to the 10% excise penalty...it applies to withdrawals prior to age 59 1/2 which may or may not be the Normal Retirement age in the Plan. I also think there are very few exceptions... although total and permanent disability comes to mind. I could be wrong and have maybe not read up on all the new rules, but I do not think the 10% is waived for hardships or first time home purchases...at least from a Qualified Plan. Anyone else out there better versed than I in the new rules?

Hi Bill - Thanks - I did get it to work by cutting & pasting & adding it to the new report as you mention. Many of my plans are combos with 401(k) & profit sharing, so I do a minimum of two vals per year (and some quarterly) and most have more than one entry date. Since the term dates are not in the ee census file until the end of the plan year, I resorted to using the status dates instead and I simply limit who the report chooses by status code & category. It seems to work well for what I need. Thanks again for your thoughts. Patti

I have created a Crystal formula variable that looks at Category Code and status date so that term dates will print on my Employee status report pages for all terminees but not for participants with status dates for other reasons. (I did this because termination dates do not update to that data field until the end of the plan year, so all current term dates were not printing on my status pages). In any event, I named the formula field @termdate, but my problem is that when I want to insert that field into another report, I don't see it listed as a formula option in the new report. HELP! I'm on Relius version 7.3 & Crystal 8.5. Any help is appreciated. As usual - I have discovered how to do something within minutes of posting or sending questions to Relius support! In any event, for those who might have wondered...I simply opened the report with the formula I wanted and opened the new report. I then simply copied the formula field from the old report to the new report. It was easy.