Archimage

Yes, the employee would still be counted.

I believe Form 2032 deals with resident aliens, not non-resident aliens.

You are correct. There is no tailoring.

You actually have three different options. What you just said and two others. 1. Test the "terminating" plan through the end of the short plan year and test the surviving plan for the regular calendar year. You would treat the merged participants as new entrants as of the date of the merger. 2. Aggregate the plans and do one ADP/ACP test. 3. Test both plan through date of merger. Then do one final test from date of merger through end of calendar year.

I am looking in the ERISA Outline Book and I see Sal talks about this situation. He also says if the original principal amount is paid off by in the new loan by the orginal maturity date then there is no deemed distribution. I am reading this correctly? Q&A 20(a) of 72.(p)-1 is referenced.

Yes, that is the case. I figured a 1099 would have to be issued for a deemed distribution. Is there anything else that would have to be done?

A loan was issued incorrectly in the following manner. A participant had a vested balance of 32,000 and an outstanding loan of 9,000. The participant wanted to refinance the loan and the new refinanced loan was issued for the amount of 10,000 (9,000 of old loan and 1,000 of new addition). This would be over the limit of the available loan amount.(19,000>16,000) How is this corrected?

An employee (NHCE) wants to sign an irrevocable waiver out of a safe harbor 401(k) plan before he is eligible for the plan. This plan uses a SHNEC. The plan document does allow for this. How would this affect the safe harbor rules? I cannot find any guidance in Notice 98-52 or Notice 2000-3.

I am not a CFA nor do I claim to be an expert regarding the CFA material. I will tell you my opinion in case it helps. I can't see how the CFA designation would help you out as a plan administrator. The CFA would only be of value to you if you have an interest in actually managing other companies and/or people's money. If you have no interest in being a money manager or similar career, the CFA is not for you. If you are looking for a designation to further your knowledge in plan administration then you should look to an ASPA designation or CEBS.

OR refer to the SPD for other types of contributions available.

I have acquired a plan that was poorly designed. It is a 401(k) safe harbor with the SHNEC. The document currently contains no matching provisions. Is it possible to add discretionary matching provisions without losing safe harbor status. I thought so initially and then I starting to go back and read through Notice 98-52 and now I lean towards it not being allowed. I reference the content requirement: The content requirement of this section is satisfied if the notice (1) is sufficiently accurate and comprehensive to inform the employee of the employee's rights and obligations under the plan and (2) is written in a manner calculated to be understood by the average employee eligible to participate in the plan. For purposes of the preceding sentence, a notice is not considered sufficiently accurate and comprehensive unless the notice accurately describes (i) the safe harbor matching or nonelective contribution formula used under the plan (including a description of the levels of matching contributions, if any, available under the plan); (ii) any other contributions under the plan (including the potential for discretionary matching contributions) and the conditions under which such contributions are made; (iii) the plan to which safe harbor contributions will be made (if different than the plan containing the CODA); (iv) the type and amount of compensation that may be deferred under the plan; (v) how to make cash or deferred elections, including any administrative requirements that apply to such elections; (vi) the periods available under the plan for making cash or deferred elections; and (vii) withdrawal and vesting provisions applicable to contributions under the plan. Would you agree that the match cannot be added to keep safe harbor status?

No, it won't impact your test. The actuarial factor is based on years to testing age (65). From this point forward he will use zero as his years to testing age.

I would agree with you. I think the DOL would agree that this was "as soon as administratively feasible". As long as they are under the maximum window of 15 business days following the month in which the deferrals are made I would check "no".

If you are only carrying forward the number from last year then you are doing this incorrectly. Your beginning of the plan year number will include participants that enter the plan on 1/1/03. If you have nobody that entered the plan on 1/1/04 then you would not need an audit.

Top paid group deals strictly with the compensation test. Your ownership test must still be performed.

That is correct. Sorry for the confusion.

Alf, the problem runs into how the document is worded. The document we are currently discussing probably states the the match is discretionary and does not state a formula. Some would argue this is not acceptable. I would say that you should submit for a determination letter. If you get it then I think this practice would be acceptable. When drafting documents and you have no intention of submitting I suggest you always state a formula in the document for a discretionary match.

You should file based on the contract year that ends within the plan year. In your case it sounds like the contract date was extended to 12/31. I am assuming you are receiving two parts of information from the insurance company. I would consolidate both of these to reflect your schedule A information for the 15 month period.

What exactly are you talking about? Are you referring to the insurance contract and Schedule A?

As long as you are following the plan doc and pass non-discrim testing then I do not think it is abusive.

A person has an IRA (rollover from a QDRO) and is not age 59.5 yet. She is currently receiving annual installment payments which qualify for no premature penalties. She would like to take a lump sum distribution from the IRA. Three questions: 1. If she takes this lump sum, does this cause prior installment withdrawals to be penalized? 2. Would the lump sum negate any future installment payments from penalty? 3. If she so decides, can she return any of the lump sum money within 60 day? Is so, are there any other consequences?

I have a prospective client that has two HCE non-resident aliens with U.S. income that they want to benefit. Does anyone know of any problems or situations I should be aware of in regards to non-resident aliens?

Based on what you have said, he should be able to defer the full catchup amount.

I disagree (on the federal level anyway. No knowledge of state law). A discretionary contribution is just that. A discretionary contribution can be made, reduced or eliminated at the discretion of the employer. The plan document will probably not require a board resolution for the contribution. Many documents also state that the contribution for the given plan year has to be made by the due date of the tax return.

You do not attach any schedules to the form 5500 for ERISA 403(b) plans. The 5500 instructions state: "1. 403(b) Arrangements: A pension plan or arrangement using a tax deferred annuity arrangement under Code section 403(b)(1) and/or a custodial account for regulated investment company stock under Code section 403(b)(7) as the sole funding vehicle for providing pension benefits need complete only Form 5500 Part I and Part II, lines 1 through 5, and 8 (enter pension feature code 2L, 2M, or both)."