Archimage

It would probably be impossible to tell you what you are doing wrong since there are so many things that interact. I would recommend calling Relius support. They will get your problem solved.

Your assessment is correct. Just make sure you don't have any ASG issues.

I am designing a plan with a short plan year and I want to make sure my thought pattern is correct. I have a plan with a plan year ending on 9-30-2006. There will be a short plan year from 10-1 to 12-31-2006. I am going to define 414 comp as calendar year comp for the short plan year. I am doing this in order to make the ADP for the HCEs low enough to pass. Is there anything I am not considering that would cause me some problems?

Are you saying the president and secretary are making the investment decisions for everyone or just themselves?

Would you consider a failure to make ADP refunds by the regulated date a significant or insignificant failure under EPCRS? This is for one single year and not multiple years but it is outside of the prescribed two year period for significant errors under SCP.

We always use the published rates of return. I don't think there is any published guidance. I do either is a fair way to calculate earnings but as you said it would be too much of an administrative burden to calculate the actual return.

If the assets are truly custodied by the trust company, then you can do a limited scope audit.

I believe the Corbel amendment is not just for their document and you can purchase it from them if you want.

If your document defines 414(s) compensation this way you can. Otherwise you must use your 414(s) comp definition in your document.

The correction method you are proposing is for if the plan failed to include an eligible employee. It sounds like in this situation the employer failed to follow the participants' direction of what was to be deferred. This specific problem is not addressed in the EPCRS. At the ABA Tax Section Committee meeting with the IRS and Treasury earlier this year, this same question was posed. They responded that if an employee makes an election, the employer has to correct the error by putting the participant in the same position had the error not occurred.

You mentioned they use the 401(k) safe harbor rules. I assume this is actually written in your document. If you do the distribution then you have failed to follow the terms of the plan document which is a possible disqualification issue. Why not just amend the document before you do the hardship?

That would be fine. The only problem you will face is having to amend the plan every year.

You can do what you just mentioned. I would recommend to do the additional 7% as your discretionary profit sharing amount.

I have had the same issues as Elleny. There are instances that when you are building a document that contains a provision that you would rarely use, they would forget to build that feature in the document! You really have to proofread to make sure there are no document building errors. It is a cheaper document and you get what you pay for.

No, there is no requirement that the accounting for your plan be on a cash basis.

I agree. Need to submit.

Where does it state that in the regs!! Just kidding

Just to add to what Demosthenes is saying, most plans offset loans when a participant reaches a distributable event such as a termination. At this point the loan is offset from the participant's account and completely wiped off the books. There is no more accrued interest at that point. I would go back and look at the plan's loan policy to see what the provisions state. The situation you are stating is very uncommon (in my experience anyway).

I assume you don't have any NHCEs. If that is the case, you can do whatever you want. There is no testing since there are no NCHEs.

I think there is some freeware out there that adds a printer called "PDFWriter" or something like that. I don't know how or where to get it but maybe your IT guys might.

1. Some documents will have the options to select how the match is calculated, either on payroll-by-payroll basis or plan year basis. Some give the administrator the flexibility to choose either method for any given plan year. 2. If the deferrals were stopped against the participants' designations, I think depositing a QNEC of the average deferral percentage for the group (HCE or NHCE) is the way to correct this error.

The document is silent. This plan has used forfeitures before but not in this fashion. I can't find anything that says I can't do it. My line of thought is if the regs/code are silent on the issue and the administrative costs are not economically feasible to reallocate to participants, putting the earnings in forfeitures seems like a viable solution.

Basically if these benefits are taxable income then they are included. As "E" noted, the problem will be figuring out whether or not the moving expenses are qualified or nonqualifed and whether or not the reimbursements are non-accountable or accountable.

A plan has forfeited some ineligible deferrals. Normally the interest earned would be reallocated to all participants. Due to an administrative burden this really isn't an option. Is it appropriate to put these earnings to the forfeiture account?

You use 415 compensation to determine HCEs so yes would include those additional items.