Mike Preston

fjr, I admit to not understanding your comment.

hpaine, yes the plan is top-heavy, but how does that modify anything that Blinky said?

So confirmed. If you test a DC plan on "contributions" it is NOT cross-testing.

No.

You need to subtract the 1/2 FICA tax.

Yes, and no. That is, I can do so generically, but don't have time to do so in detail. The IRS published a Field Service Memorandum on the issue of definitely determinable in a cross tested plan some years ago, before they were accepting discretionary groups in the document. In fact, the rescision of the Field Service Memorandum was the condition precedent to the IRS allowing groups in a plan document. Basically, you have to define precisely what method you are using to determine your cross-testing (accrued to date vs annual method, interest rate, mortality table, retirement age, normalization formula, etc., etc.). If you find a cross testing document from TRA with a Letter of Determination that should pretty much show you the type of language needed.

What plan year is in question? Are you projecting for the 12/31/2002 year? If so, keep in mind that -11g amendments are, by definition, retroactive. If you make an amendment before the end of the year, do you need to be concerned with the vesting issue?

Sure it can be done. Why not? The only issues, as pointed out, are whether it is definitely determinable and whether it passes testing. If the integration percentage is not at the 5.7% level, then if very well might fail. It depends on whether there are any other plans and/or whether accrued to date testing works out better than annual testing. With that said, unless the document lays out a lot of what it means to determine how cross testing is to be performed, my bet is that it is not definitely determinable.

Maybe. Probably, even. But not definitively. If the a4 testing is done without consideration of those who do not satisfy statutory minimum age/service requirements, and if this person falls into the category of not satisfying statutory minimum age/service requirements, then no. However, if the person is in the plan because they at some point satisfied the statutory age/service requirements, then yes.

Anybody want to verify whether this is correct?

No for the rate group testing (that only includes the discretionary and the SH), yes for the ABT (that includes all sources).

I'm hopeful that the negatives can indeed be attributed to growing pains vis-a-vis the hotel's expectations of the ASPA Conference. Certainly adjusting room temperatures and hiring more staff for the checkin crunch (be it cleaning staff or front desk staff) are issues that can be improved. Keep in mind that the lead times on selecting hotels for events of this magnitude are quite long. I forget exactly, but I think it is at least 3 years. Hence, 9/11 had no impact. Also, there are very few hotels that have the conference facilities ASPA needs, so it isn't like we can get into a bidding war. Maybe that will change once the new DC Convention Center is built, but I'm not a fan of holding an ASPA Conference at a convention center. By definition, that means people will have much further to walk from their hotel rooms, and most likely have to go outside when walking between their rooms and the conference. Did I mention the entertainment was REALLY, REALLY bad on Tuesday night? FWIW

One more thing. It was very nice not having a handful of sessions at a hotel that you had to walk outside to get to. It was miserable outside this year and had we still been at the Hyatt, the walk over to the Marriott would have been dreadful.

Yes, indeed. I didn't even mention that the box lunches were very good, as was the sit-down lunch on Tuesday. Again, much better than the Hyatt.

Agreed.

Oh, I thought the facilities were ok. Rooms are rooms (sleeping, that is). Maybe not quite up to the standards of the Hyatt, but pretty close. I thought the traffic patterns were much better than I expected. A single escalator for climbing two floors seemed to me to be a recipe for disaster, but I didn't see too many backups either entering or leaving. The exhibitors hall was much, much better than the Hyatt. And, last but not least, the actual session rooms were miles better than in past years. Having each and every one of the sessions set up classroom style, instead of theater style, is a vast improvement. OK, maybe the last paragraph wasn't the last comment, becuase my pet peeve was the Gala on Tuesday night. Two subcomments, actually... 1) The sponsor's did not get the mileage out of paying for the food because it wasn't advertised in advance as having chinese, italian, crabcakes, etc. The food was very, very good and many more people would have attended had they known about it. Maybe that was a mechanism for holding down costs? I doubt it. Again, to compare against the Hyatt, the food was miles better here. 2) The entertainment was absolutely horrible this year. Supposedly it was the same group as last year, but they must have all gone through some life-changing event because all they did was play obnoxious solo's (playing for themeselves and not their audience) and play songs that emptied the dance floor more frequently than not. You would think they would take a look at how many people exited the dance floor everytime they played a certain genre, get a clue, and change to more of the old time classics. Nope. They couldn't even get the beat to When a Man Loves a Woman right, and their rendition of Shout! at the end was pathetic. As far as the Gala goes, the only comment that comes to mind is: "But, other than that, how did you like the play, Mrs. Lincoln?" But the rest of the conference, including the continental breakfasts, which were better stocked and more easily accessible (I forgot that comment earlier) was just fantastic.

Your position is not supportable. You should tell the client that you are taking a "worst case" position and that they are likely to get a different opinion if they talk to anybody else.

It is permissible.

The vesting post was in reference to Maverick's posting. In a situation where you you have 2 yos eligibility for PS and 1 yos (or less) for deferrals, you might want to consider separate plans.

With respect to the vesting percentage for the individual forced to get a contribution before being eligible for the regular profit sharing contribution, what does the plan say? My bet is that top-heavy provides a minimum vesting schedule that is meaningless, as the vesting schedule under the plan is 100%.

Tom, with 2 year eligibility plans one should not select the option to measure eligibility computation periods on the basis of plan years after the initial eligibility computation period. That way, an individual needs to work 24 full months to have 2 eligibility computation periods. Right?

As previously stated, I think, 415 doesn't seem to apply, but deferrals into the 457(B) plan reduce, on a dollar for dollar basis, the maximum that can be deferred in a 401(k) plan. Actually, the way the rules work is that the employee is free to defer more than the annual limit between the two plans. But when completing the tax return the employee will find that only a single maximum is excluded from income. That is, there is no requirement that the two plans have any knowledge of each other. Further, if the employee does defer more than a single maximum, the employee should request that anything in excess of the single maximum be refunded (probably from the 401(k) plan). If the money isn't refunded from the 401(k) plan within a specified period of time (I think it may be the 4/15 following the year in question) then the employee suffers double taxation. That is, the amount is not excluded from income but it is taxed when it comes out of the plan. Yuck!

It depends who is the owner of the second employer. There is a rule somewhere (I don't have time to look it up at the moment) that aggregates, for 415 purposes, the contributions made to a 403(B) plan of an employee that maintains a separate business with the benefits provided by the separate business, if the employee controls that separate business. I'm not sure off the top of my head whether that same aggregation applies to a 457(B) arrangement. Are you sure you aren't talking about the elective deferral limitation of section 402(g)? If so, then yes, I think that an individual's contributions under a 457(B) plan count towards that maximum. At least in prior years. I believe that EGTRRA eliminated the requirement to aggregate, though. I'm a bit rushed at the moment, due to 10/15 deadlines so I'd appreciate it if somebody else could confirm (or deny) what I seem to be recalling off the top of my head.

Well, you might have a case, but then again, you probably don't. Unfortunately, your most recent description is not consistent with the statement that: "All the adoption agreements were signed in the appropriate time." Hence, I guessed wrong. You now state that the previously executed amendments were only "snap-on" type amendments. It is highly unlikely that those snap-on amendments met the full requirements of GUST. If they did, then you would still have an argument, though, so maybe it is worth looking into a bit.

Michael, I'm confused. Your last post includes the phrase: "All the adoption agreements were signed in the appropriate time. " What does that mean, exactly? Because immediately preceding that statement, you also state: "I still need to get the plans up to date, so I will still go ahead and finish that. " Those two statements appear to be mutually exclusive. But, if I have guessed correctly, you may not have a problem. So, my guess is that the meaning of your statements is that: 1) You had your clients adopt updated, GUST II, adoption agreements, before 2/28/2002. 2) You have not yet submitted those plans, as you thought the deadline for submission was 12/31/2002. Do I have that right? If so, then all you have is a situation where the plans have not filed for a determination letter. It is voluntary to file for a determination letter. Yes, it is generally perceived as good practice to do so, especially for individually designed plans. But by no means is it mandatory. If I have guessed correctly, you can certainly submit for a current letter of determination by filing at any time. If the filing is beyond the end of the GUST RAP the IRS will only review for compliance within the current year. But, if the language of your plan is "good", that shouldn't matter at all. I hope this helps. mike