MarZDoates

Participant wants to take a hardship withdrawal. He has roth deferrals only. The distribution would not be a "qualified" distibution under the Roth rules. Since we can only distribute deferrals (and not earnings) for a hardship, would this be non-taxable?

Plan sponsor had an address change in 2013. Plan document was not amended. Since we can't amend a S/H 401(k) Plan mid-year, we will probably just wait until the restatement to change the address in the document (adoption agreement). How should the notice to participants be handled? The address is in the SPD, so technically, an SMM would be required. Can an SMM be prepared without a plan amendment? Or is it even an issue at this point?

Thank you.

Corporation sponsors a 401(k) plan w/ fye 3/31. Eligibiity is age 21 and 1 yos w/ semi-annual entry dates. They utilize the services of an individual through a temp agency beginning 6/25/13. This individual has worked more than 1500 hours to date. Assuming she is still performing services for the Corporation on 6/25/14, we determine that she is a leased employee. The plan excludes leased employees from participation. Should she be included in coverage for the plan year ended 3/31/15? If the plan does not exclude leased ees from participation, would she enter the plan on 10/1/14? Thanks.

I would be happy to let them do the testing. One of their employees said that since it is not a CB plan, there isn't any combined testing that needs to be done...that we could just do the coverage and non-discrim for the DC plan (which is cross tested) and they would do the testing for the DB plan. Does that sound correct? Meanwhile I'll take a look at your citation. Thanks!

This is my first time dealing with a S/H 401(k) Plan when the sponsor also has a DB plan. Is there any special or combined testing that needs to be done? I have very little knowledge of DB plans. (Our firm handles the DC...another firm handles the DB). I do know that it is NOT a cash balance plan and the DB does NOT contain floor offset. Thanks in advance for any help you can give me.

Are alternate payees (under QDRO) required to be reported on Form 8955-SSA? Account balance is still in the plan. Thanks.

Ahhh, yes. That wonderful answer. "It depends". Thank you muchly!

Does a board resolution need to be adopted to declare the amount/percentage of p/s contribution the plan sponsor will make for the year? (IF they make one?) I have heard "yes" and I have heard "no".

Thanks.

The items are actually excluded from the definition of comp in the document. I think the sponsor is thinking it will reduce his match cost if the employee is not allowed to defer on those comp items.

Plan excludes bonus and overtime from compensation for deferrals only. Plan does not exclude any time of compensation for safe harbor match. Don't we still have to make sure the comp for deferrals is not discriminatory? Thanks.

Thank you!

According to IRC 402(A)(b)(1), a roth deferral must be maintained in a separate account. Does this literally mean a separate investment account earmarked for Roth deferrals? Can you not have a pooled investment account and just separately account for the roth deferrals, earnings, etc.? Thanks for any and all input.

Awesome. Good luck. I hope to go down that road in the future. DB exam away from QPA so far.

We have a safe harbor 401(k) using the basic safe harbor match to satisfy adp/acp testing. Client is considering a profit sharing allocation to a select group of employees who are not HCEs (i.e. "middle managers". Since this is not a design based (or non-design based) safe harbor, we will have to pass non-discrim using the general test. Their document allows them to exclude classes of employees (anyone that does not fall within the middle manager definition) from receiving the profit sharing contribution only. They are still eligible to defer and receive s/h match. Their document allows them to exclude HCEs from profit sharing only. They are still eligible to defer and receive s/h match. Plan is NOT top heavy. Since no HCEs benefit for the profit sharing portion, the plan automatically satisfies coverage and passes general test? Does this sound correct? I think it's okay....but wanted to bounce it off the experts. Thanks!

Plan Document (Adoption Agreement) currently does not permit automatic rollovers of balances between $1,000 and $5,000. Is there an exception in the event of a plan termination that says the funds may be automatically rolled to an IRA in the absense of a participant election? Or does the document need to provide for auto rollovers? (The participants will have been given a distribution packet and the option to elect the form of distribution.). Thanks!!

Thanks. The material I read (not the actual reg), left out the "to the extent..." part. What I read originally sounded like the entire distribution would be considered a refund of excess. Thought that sounded pretty darned harsh!!!

Tom, does this mean that the entire distribution is considered to be a refund of excess deferral? Or just the portion that should have been refunded to pass the ADP test?

Thank you.

Is it correct that the dinglebat is not included in the adp/acp but IS included in coverage? Serious question.....funny example!! (Assuming a non-safe harbor 401(k) plan, of course.)

Thank you.

Since SIMPLE plans are subject to the controlled group rules (i.e. all members of the controlled group are treated as a single employer for qualified plan requirements), would it be correct to say that there can not be a SIMPLE sponsored by one controlled group member and a 401(k) sponsored by the other controlled group member in the same year? Thanks.

Thanks, everyone!

I have a client that uses a 3% safe harbor non-elective contribution plus a discretionary profit sharing contribution. Last day of employment allocation condition applies to the discretionary p/s. P/S is pro rata based on comp. (Not cross tested/new comp allocation). Is it correct that I must pass the general test since a terminated participant receiving the 3% safe harbor but not part of the profit sharing eliminates the "uniform allocation" forumla of the plan? I think I heard this in class or in a webinar, but can't find my notes. Thanks!