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You thought right. From the information you gave it is not a controlled group since ownership is less than 80% for company B.

What Tom said.

I will try and look up the code and post. Mark, that is where you get an ERISA attorney involved.

I agree with mbozek. The employer could be liable for deferrals for a certain period, let's say a month. After that ERISA says that employees have an obligation to mitigate their damages by pointing out that deferrals are not being made.

There is no other exception. They will have to make the top heavy minimum contribution of 3% unless the highest key deferral % is less than 3%.

As "Other Expenses".

In every case I have dealt I have sent a letter back to the IRS saying that the client participated in the DFVC program through the DOL. The IRS has come back every time and waived the penalty. Should be no problem for your case.

agriffith, let me know if these posts help. If they have confused you even more let me know and I will try to explain it better.

It wouldn't pass on a benefits basis but it would pass on an allocations basis.

I believe you can do this in 9.0. Any version before that you will have to post a contribution transaction.

I have the same problem. I try using the advanced help and those suggestions never work for me. I find it impossible to search now. I thought it was just me.

Is there someone out there that would be willing to discuss with me how they go through daily reconciliation on the AST/Security Trust platform? It takes us so much time on a daily basis to reconcile all positions. It seems as if we have made this harder than it should be. I would appreciate any help on this.

I agree with JQ on the mutual fund issue. The IRS/DOL is looking to make sure that plan investments are diversified. If you have all of your assets in Technology Fund, are you truly diversified? Of course not. That is why you need to treat a mutual fund as a single security.

Um, you are a couple of days late. Theoretically you should be able to do it. I can't think of any reg off the top of my head that states you couldn't.

Your plan document is required to state how top heavy requirements are to be made. This should already been written in your document. I don't think you will have to change anything.

Yep, you have to give him the TH minimum.

I would have the employees sign a sheet of paper stating they received the safe harbor notice and sign a deferral election form stating they do not wish to defer at this time. If the owners feel certain they won't defer, I would take the design a step further. I would make the match formula 250% of the first 6% (or whatever the formula would be to get the HCEs to 41,000). Since this is all safe harbor contributions, the NHCEs would not even have to get the top heavy. You could adjust this based on what the owners want to do but it should give you some ideas.

Interesting discussion. Would the ABPT still be available if a group of HCEs got a zero contribution? (assume this would not make the plan a CODA).

I agree with your solution. I know of no reg that gives you the authority to refund ACP corrections before the match is made.

That is true but you cannot refund matching contributions that are not made yet. Please give me a reg that shows differently. It would make my life easier.

You cannot do ACP testing until after the match is made.

Since the plan was in existence in 2002, a 5500 is required.

I have someone who wants to sell their real estate out of their IRA to his brother. I don't see anything under IRC 4975 that says that this is a PT. Am I correct?

If your document allows for it, you can do a bottom-up QNEC which could be very cheap for the client.

Top paid group only has to do with compensation. See he has no compensation then he can't be in the top paid group. However, he is an HCE because of his ownership. He is excluded. You will have to correct with refunds or QNECs.