Mike Preston

What makes you so sure that 403 is a b?

If Company A and Company B are not in a controlled or affiliated group, they each can extend qualified plan benefits to their employees without consideration of the other. That means coverage, nondiscrimination and maximum limitations.

Firefox rocks. There are so many features that it has that IE doesn't it isn't even funny. However, password manager? Not on my watch. Much prefer something like http://passwordsafe.sourceforge.net/ Multiple tabbing is something I don't ever want to be without. Really like the bookmarks toolbar. You can group multiple bookmarks (like NYTimes, CNN, LATimes, Chicago Tribune) together, then click "Open In Tabs" and go away for a few minutes and all your websites have been accessed and loaded. Works better with 30 than 5. <g> One click....all loaded. Amazing. Does IE have something like that. If you have a mouse that tends to be right-clicked and moved "all by itself", you might want to disable mouse-gestures. That is, if you rest your hand on your mouse and find yourself moving it around and right-clicking unintentionally, mouse-gestures may not be the next best thing since sliced bread. If you ever want to scroll-size not only text, but graphics, you need Opera. Neither Firefox nor IE expand graphics. Dithering can be a problem, but it is better than nothing.

Hey, I resemble that remark!

1) 401(a)(26) - No, they don't count in numerator, because they aren't participating. They count in the denominator only if they would otherwise be eligible for the plan but for some factor other than age or service. Hence, if the plan excludes a certain class of employees from participating, but otherwise has a zero hour exclusion, then this individual would count in the denominator because he would be a participant but for the fact that he was in an excluded class. In your case, that doesn't seem to apply, so they aren't in the denominator, either. 2) 410(b) - Again, if they meet the definition of excludable employee, then you can exclude them from the test if you are excluding excludable employees from the test. Kind of a fun statement, that. 3) 404(a)(7) - well, you include and you don't include. You include the compensation and the SH contributions. But because this person is not participating in the DB plan you don't otherwise create the 25% limitation just because of this person. Obviously, in the situation you described, I'd be shocked if part of your plan design was to attempt to avoid the 25% limit all together. 4) 401(a)(4) - include in any test where this class of excludable employee is tested. That is, if you test under 401(a)(4) by permissibly disaggregating the excludables from the non-excludables, this person goes into the excludables being tested. If you don't disaggregate, yes this person is counted.

RTK, a very nice description that. Correct, too. Very nice.

Of what photo do you speak?

Yippee!

Will an over-the-hill ex-board member satisfy you? If so, fire away.

You ARE trying to avoid the issue of an ERISA attorney, and in this case, I think that is silly. Even when I ask, you still don't provide specifics. Yes, both are SCorps and one is an LLP and the other not. Which is which? The mere fact that you don't know that you need to be precise when you lay this out is precisely why you need an ERISA attorney. The stakes are high. Complete disqualification of the MP/PS plans. How much in there? Poof. Gone. Between income and excise taxes, along with penalties (even though penalties don't get paid from the trusts). On your watch? Does the public consider them one entity, and they internally just split them up the way they want? Is there one phone being answered? Two separate phone lines? Answered by the same person? Who pays that person? What is the arrangement for that person, 1099 or W-2? Who owns the other 50%? Related in any way? Is it a real ownership? There are just way too many facts that need to be pinned down to determine what is going on, once you identify the fact that they are practicing out of the same location.

It was nice of the IRS to provide that "clarification." The regulation in question appears to be specifically addressing the case where the HCE is paid out DURING the year in question. The Q&A is more broad in that it allows for the case where teh HCE is paid out AFTER the year in question. Without the IRS' clarification I was reluctant to state that the regulation was applicable.

Sometimes you feel like a nut....sometimes you don't.

I'd guess that there is a very good reason for the 10% limitation. But before I could tell you for sure, I'd sure like to know who sent you that letter. And, even more importantly, I'd like to know WHY they sent you that letter. There is certainly nothing in the code or the regulations that restricts your HCE's to 8% or 10%. So there must be some other reason for it. Find out what it is, and then maybe somebody can tell you whether that reason can be set aside.

Having a bad day, huh Qp? "No way" is a strong statement, but in this case I'd suggest it is wise to do so. Without trying to be too blunt about it, it is pretty obvious that you, alone, do not have a mastery of the applicable law and regulations that govern this area. If you did, you would not have confused the controlled group issue with the affiliated service group issue. However, with that said, if you provide enough DETAILED FACTS here, maybe somebody, even QDROphile, may give you enough information to make a determination. The facts that you need to provide, at a minimum, are the bueiness entities involved (are they corps? partnerships?), what they do, how they do it and exactly how they interact. This may be more information than you are willing to disclose on a public venue. If so, consider hiring somebody familiar with these matters, who may be able to give you comfort in very little time.

And DB should be 175k

You need to visit with an ERISA attorney to determine if there is a controlled group situation here. With only 50% ownership in B, unless other owners of B are related to him and unless there are affiliated service group issues, I just don't see it - based on what you have said, anyway. I'm more concerned with the fact that he doesn't participate in the SIMPLE. Do you mean that he just doesn't defer? That isn't the same as not participating.

I'm with Trumpy.

The other plans probably aren't 3% SH plans. They are just new comp plans. Probably. I hope!

Bob, I just don't get what you are saying. We don't know the structure of the existing new comparability plan, do we? Perhaps it is as flexible as anything you might be thinking of going to. We just don't know. I'd like to know what the provisions are before I suggest they do something to change. Then again, maybe I missed something in the translation.

Sniff...sniff..sniff...... Yup. Fails the smell test. With apologies to Labrynth fans everywhere: "SMELLS BAAAAAAAAAAAAD" Can anybody seriously argue that this is not a Benefit, Right or Feature the provision of which to a single HCE doesn't fail the "significantly discriminatory" definition?

What kind of amendment are you talking about?

Hey, you guys got our quarterback, so we should get the nutritionist plus a coach to be named later.

You get two catchups during the 12 month period the same way that you get two 401(k) deferral limits during the 12 month period. Try explaining that you can defer, legitimately, $27,000 during a 12 month period to somebody unfamiliar with anything other than calendar year plans. Great fun. ;-)

If it is to be taken into account under 404a6, then you would treat it like any other contribution made after the end of the year under 404a6. That is, if you reflect the receivable contribution in your reporting, you include this amount as a receivable.

Consider it all your fault, Tom. All your fault. <sigh>