Archimage

That is what I am trying to find out. Is a VEBA an ERISA trust?

I see the final regs now refer to SHNECs as QNECs. How would this affect a safe harbor cross-tested plan? Before the final regs, they safe harbor contributions were not refered to as QNECs.

I saw an article on 401khelpcenter.com the other day that said the DOL is using a standard of seven days under their plan investigation procedures. It was very interesting.

Since I am very unfamiliar with VEBAs, let me ask this question in a different manner since I cannot get a straight answer. Is a VEBA a qualified plan under ERISA?

The only way I know that you can do this is to use the user-defined fields. You will have to create new crystal reports that will sort on the user-defined field you have specified for your REAL divisions.

I apologize if I confused you. I did not mean the trustees only. My question meant to include all fiduciaries associated with the VEBA. I would assume the same rules apply to VEBAs as they do 401(a) plans but I do not know for sure.

Are VEBAs required to have fidelity bonds?

You should still amend to zero. You had mentioned basing the contribution on partial year's comp. You will not need to since no MPP contribution has accrued.

I take it there is no last day rule so the owner has already accrued the contribution. If you only want to base the contribution thru 1/31/05 then you would need to amend the plan year to make a short plan year because your document probably defines compensation as comp for the plan year. I don't see any problem with the two changes being on one actual amendment.

I think you are fine to merger it mid-year. You will need to amend the contribution formula to 0% and issue 204h notices. You will have to setup the new 401(k) plan and have a merger document that changes the assets over effective mid-year. You will have other issues if your MPP has participants that have already accrued this plan year's benefit. If you have a last day rule then you won't have any problems.

I believe PenChecks is another company that is doing them.

You would mail it to the same address.

I subscribe to TAG and I have just found they have a lot of information also.

Anyone know where I can get a copy of the guide, handbook, or any other tools that IRS agents use to conduct their plan audits?

You forgot a couple of things. 1. You have to subtract the contribution of 750 from 50,000 which gives you net earnings from SE of 49,250. 2. You have to back out 1/2 of SE tax which is 3479 which gives you 45,771 3. Then you would multiply by .03/1.03 which gives you 1,333 and some change.

The plan document is the only thing that has to be executed before year end.

Ugh...I thought this was supposed to be the Humor forum.

I am assuming there is no shared ownership among the three companies. I am also assuming the mgt company has no other clients but these two companies. This doesn't sound like it would be an A-org or a B-org ASG. It could be considered an ASG under the Management Group rules. However, the regs state that the managment company must derive MORE THAN 50% of its principal business from services to another company. This mgt company only receives 50% from each. However, if one company receives more fees from company A then I would believe this would be an ASG consisting of the mgt company and company A. I normally recommend hiring an attorney to decide whether or not a group of businesses is an ASG. The rules are somewhat vague and a legal opinion usually will give you piece of mind.

That is correct.

First thing, coverage testing is under 410(b) not 401(a)(4). Second, if everyone is receiving a 3% SHNEC then your ratio test is 100% so you pass. The SHNEC IS a profit sharing contribution.

It may not seem right but that is how it is done. Top paid group election could really help reduce the number of HCEs in a controlled group. However, the TPG election must be made my all members of the controlled group.

Agreed.

It is not uncommon for a plan document to require a true-up contribution on an annual basis for plans that are matching on a payroll by payroll basis.

If the participant's deferral % did not change throughout the year, then you would not have anything to change. However, if a participant changed their deferral throughout the year, your year-end deferral % (annual deferral amount/annual compensation) would not equal what you have matched on. Therefore, the document says you have to true-up this number in order to get the correct annual number. I hope that makes sense.

Austin, I agree with you 100%. However, there are some clients out there that might want to true-up just for the quarter. Why? I have no idea. Therefore the document providers may be putting this language in there to satisfy their clients.