Blinky the 3-eyed Fish

He's not. Sure, most plans pass the ratio test for coverage. This addresses plans with this design that do not. To point out that the plan needs to pass the ratio test for coverage in this situation.

I noticed his conspicuous absence. Not enough experience here to be a big gun, so I will take the "big mouth" nomination.

Hey, what's that crack about?

Yeah, your plan document sucks! http://benefitslink.com/boards/index.php?s...=24269&hl=sucks

I didn't understand what you meant by your last sentence. Let me summarize what I am saying. For those 21/1 participants, when determining what compensation to use for meeting the gateway requirements, I am saying that without specific language in the document that assigns these people an entry date for gateway purposes, that the gateway should be based on full year's compensation. If you have the specific language, then I believe it would be okay to limit the gateway amount to compensation from that entry date.

But in this situation when the DC plan has only 401(k) deferrals 404(a)(7) doesn't apply, so you could fund the maximum contribution.

No matter what the IRS says, I would never shred old papers. From personal experience I can say that there are times when you will need to refer back to them for certain clients.

Tom, but keep in mind jaemmons is asking this question concerning people without an official entry date in the nonelective portion of the plan yet. Jaemmons, I would be curious where you read anything on this. I would say that a theoretical entry date would not be sufficient enough to get around the definitely determinable benefit criterion. Instead I believe special document language that assigns an entry date for gateway purposes when otherwise excludable testing is used would be required to address this situation.

The answer is yes to your first question depending on your document language of course. As for your second question, I wouldn't put it quite that way. It would be that the gateway language that allows for the allocations to be increased is there. Thus, any 21/1 participant would get the TH minimum and then be brought up to meet the gateway requirement by this language. If you don't have this gateway language in your document now, then you have no mechanism that I see that would allow for the 21/1 employees to get the gateway. I smell what 1.401(a)(4)-11(g) is cookin'.

The 415 limit would be reduced by the benefit previously distributed, not by what was earned. Of course this is good news here, but would be bad news if the prior plan had excess assets allocated.

I think that the transfer eliminates the RMD problem, but opens up 2 other problems: 1) A distribution took place without election forms or spousal consent. 2) How much did the distribution exceed the RMD and does the document allow for the excess to be distributed (i.e. is the person past NRA and are in-service withdrawals allowed?)

For the benefit of others it's here http://benefitslink.com/boards/index.php?s...t=0entry95095. I stand corrected on his opinion, but it doesn't change mine.

To answer Lynn's question, a rollover may not be available if the distribution restrictions apply for him being a top 25 paid HCE.

Not really, as 414(k) language is often written into DB plan documents. Again though, I am not arguing the validity.

I think some would argue differently if a 414(k) election is made. I am not sure I am one to argue though.

Many times takeovers are the best opportunity to highlight your firm in comparision with others. If at all possible, go back and recreate the splits amongst sources. Also, if any payouts were done, those should be reinvestigated. For the extra time you spend, then client should consider getting payment from the prior TPA. Now if it's impossible to recreate the sources, then I would take jhilliard's suggestion.

The formula is specific to your document. Your questions are specific to your situation. I agree it seems odd, but I am not sure how anyone here can help. I know I can't.

From now on I will replace the word "plan" with "scheme" when discussing murder. I just hope it doesn't creep into my work-life, because then I will be doing proposals for a Defined Benefit Scheme. I think potential clients will be skeptical with that expression.

Let me try again. It's not fail-safe language that keeps it a safe harbor; it's the language in the first place that makes it a safe harbor. In other words, it's either a safe harbor or not. It's not possible for it to try and be a safe harbor, but have corrective language in the plan that makes it a safe harbor in case it's not a safe harbor. So, you need to ask whether it's a safe harbor or not? If yes, skip merrily along. If not, then run the general test. If that fails, seek -11(g).

I have taken over too many plans where unknowledgeable people were administrating them. Because plan administration is largely unregulated, there is a wide disparity of service provided. Woe to the client with service on the low-end. Maybe I have it on the brain due to a recent takeover where the prior TPA is costing the client tens of thousands of dollars, but I was just making the comment to point out there needs to be a knowledgeable person in the loop.

No cite, that involves work. Anyway, unlike the 402(g) limit, which is individual, the 415 limits for DB or DC plans are employer limits. In the example, the state plan and the law firm plan are not related employers, therefore separate limits apply. Now, if they were related employers, then one limit would apply.

Not satisfying 1.401(a)(4)-3(b)(4)(i)©(1) means the design is not a safe-harbor and you need to run the general test. You don't give specifics, but consider whether or not it's a non-design based safe harbor. In asking whether or not corrective language is there or available doesn't make sense. It's the design that is controlling here. Just look at the first part of 1.401(a)(4)-3(b)(4)(i)©(1). It says, "Under the plan, it must be impossible for any employee to accrue in a plan year..." So, the fail-safe languge, if you will, is the language that makes it a safe harbor. Now if you fail the general testing, then you have 1.401(a)(4)-11(g) as your guidance to make it pass.

If it hasn't been thought of, I would like to point out that if the plan is to murder this individual, then that could raise some legal issues, possibly.

PATA, where the 3% SH nonelective would not provide the TH minimum is if it was based on compensation from date of plan entry, was not provided to otherwise excludables or if a DB plan were involved and the TH minimum was 5%.

Sounds like DB questions to me.