Mike Preston

Patient: Doctor, it hurts when I do that. Doctor: Don't do that. Seriously? Either this is intentional (which I doubt) and the participants previously received notification that a deferral election can serve to sever payroll deductions for other benefits and that in such case they would have to make other arrangements to avoid interruption of those other benefits or it is unintentional, in which case the plan sponsor should look to the controlling plan documents to see if there isn't some way to justify them changing the order of withholding, which I can't believe they can't find. If need be, amend the plan. But I find it hard to believe that will be necessary. Here is some language I found in a volume submitter plan: The rules and procedures for allowing Participants to defer and reduce their Compensation under Paragraph xxxx of Article I and this Paragraph xxxx and to decrease (or increase) such reductions and deferrals shall be established by the Committee, in its sole discretion; provided, however, that the Committee shall exercise its discretion in a uniform and nondiscriminatory manner. " If your plan has something similar it should allow the Committee to establish a rule that says: the maximum deferral for any pay period shall be no more than net pay.

No, $1 would not satisfy 401(a)(26). Reed has had one too many egg nogs.

Nope.

As far as age differences go, you need something larger than a 44 year age difference? What are you referring to when asking about spousal age differences? You just use the MDIB factors no matter the age difference when dealing with a spouse.

IRB 2004-26 published Treasury Decision 9130 which essentially just update the regulations under 401(a)(9) to remove Regulation Section 1.401(a)(9)-6T and insert Regulation Section 1.401(a)(9)-6. And, no, there haven't been any changes to that regulation. And, no, 12 years is not a long time, as these things go.

If you are not going to name the GT PASSES separately so that you know which gateway test was passed, you can lump all of them into a single OR which avoids bumping up against the nested IF limitation of 7 (note that your original expression had only 7 nested IF's so it shouldn't have been a problem): =IF(OR(A1=0,B1=0,C1=0),"NO REQUIRED GT",IF(OR(AND(Table!A2=2,U22>=0.05),AND(U22>=0.075,Table!A2=1),AND(T21>30,T21<=35,U22>=0.07, Table!A2=1),AND(T21>25,T21<=30,U22>=0.06, Table!A2=1),AND(T21>15,T21<=25,U22>=0.05, Table!A2=1),AND(T21<15,U22>=((T21/3)/100))),"GT PASSES","GT FAILED"))

Not by me.

A few things stand out: 1:All of your U22 tests are compared against percentages except the last one. To be consistent the last one should be U22>T21/3/100. 2:For clarity of operation order I would change the above to U22>=((T21/3)/100) 3:For ease in debugging I would change the 6 "GT PASSES" to unique strings. Something like "GT PASSES-1", "GT PASSES-2", etc. so you can see at a glance which test is controlling the output 4:In testing T21 you don't test for T21 exactly equal to 15 when A2=1. I think the last should be IF(AND(T21<=15,U22>=((T21/3)/100))

No.

It sounds like the plan is a safe-harbor match plan, is that right? If so, you were required to receive annual notices with the safe-harbor provisions specified. Have you been receiving Summary Annual Reports (which would only given to you if the plan were being administered as if you were, in fact, a participant)? Where do you get the 8% ADP? That seems kind of high to me. There are a lot of facts yet to gather to determine what, if anything, you are due. In a perfect world you find somebody with an ERISA background to help you. Maybe even contact the Department of Labor (you can find their contact information on their website) for help. But it is a strange position you are in because I'm not sure you can force the plan sponsor into a restorative payment. The plan sponsor can be forced into a restorative payment by the IRS. Or the plan sponsor can voluntarily opt for a restorative payment if they believe they haven't provided you with the opportunity to defer that the plan, by its terms, provides. Good luck.

There is nothing preventing you from establishing compliance with 410(b) by way of the Average Benefits Test.

I have had very good luck calling the toll free number for 5500's. As long as you have a 2848 signed by the client ready to fax over to them (while you talk) they can (and in my experience, they do) resolve things right then and there. You have to let the client know that whatever "fix" you agree to with the IRS will no doubt NOT stop the auto-correspondence. So, the client can expect at least one more round of communication before they get a letter from the IRS saying things are all cleared up. PITA, for sure.

Don't the SH rules specify that in the event of payroll to payroll match the matching funds must be deposited quarterly?

My recollection of the events is now hazy and the above (contradictory and confusing) messages don't help. I thought the comment in #4 was spot on that the audience member was convinced that a change in eligibility could not disenfranchise somebody already in the plan. The speaker disagreed. There was no discussion of whether a change in eligibility must disenfranchise, but had there been it would have followed the comment in #11.

Then they are fools whose employees will most likely suffer. If the plan isn't amended to create the special entry date then they simply will not come into the plan until the next entry date if the plan is properly administered according to its terms. However, when there are congruent ignorant events the result is, in the absence of discrimination, a happy one for the participants, if not the plan sponsor. Event 1: Company management ignores the need to amend the plan. Event 2: HR is ignorant of the requirement to amend the plan and then administers the plan as if the special entry date was in effect. Then you have an operational failure which can most likely be corrected by a retroactive amendment under EPCRS. More expensive for the plan sponsor than amending the plan in contemplation of the event. The happy event turns into a most unhappy event if those who are let into the plan improperly lean to those who are either key or HCE. While unlikely in the scenario you describe unless you can enumerate those impacted how can you be sure?

Make the acquisition date a special entry date.

I think I was in that session. Same recollection. Same surprise.

Not a good one.

Yes.

Audit? Seriously? I have done 100's of calculations that deduct everything (or almost everything) and never felt that any of the audits through the years are disproportional. To the OP: isn't 24k + 31.5k greater than 51.2k?

Happy Thanksgiving to all!!!

Andy, the above says the opposite of what I'm saying, not the same thing.

Not exactly. Re-phrase that to: Since the plan is written such that the plan sponsor can arbitrarily decide to provide one or more participants with zero, then if a person (or persons; or group; or groups) do not get an allocation, then the ABT is off the table. Maybe I'm being too conservative. What do others think?

To put your mind at ease, search RP 2016-51 for the following phrase: For qualification purposes, an Excess Allocation that is corrected pursuant to this paragraph is disregarded for purposes of §§ 402(g) and 415, the ADP test of § 401(k)(3), and the ACP test of § 401(m)(2). Does that answer one of your questions? RP 2016-51 has very few references to "excess deferrals." It prefers "excess allocations."

I, for one, find Cloudy's original post unambiguous. The R&F used to get more than they get now. This is relevant because it implies that ATD will give better results. We have to assume that the lower R&F pay credits are taken into account in a4 testing and since Cloudy is supremely uninterested in a discussion of a4 that a4 testing is satisfied. I think Effen's position is aggressive and that most adopt 2cents' approach that the pay credit, itself, is irrelevant, and instead look to the 0.5% accrual for a26 testing. But, it most certainly is a facts and circumstances determination and if Effen is willing to fight that battle, I'd gladly watch. I agree with John that ATD can most certainly be used when a26 is tested.