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Sorry for the confusion. We had already answered those questions in previous posts. I was trying to point out that the rationale for the top paid group assumption was incorrect.

He is a 5% owner so he is an HCE regardless.

I keep the last two years and chunk the rest.

View this thread for more discussion http://benefitslink.com/boards/index.php?showtopic=23366&hl=

That is incorrect. EGTRRA changed that rule that basically says that any plan that consists solely of safe harbor contributions gets a free pass.

I just found my answer. I see that an employer can allocate a contribution for a prior plan year if it is made no later than 30 days after the 404(a)(6) period applicable to the given tax year.

I have an employer that does not want to file an extension on the company tax return. They would like to make the 2003 contribution after that date. They understand that they would not get the deduction for that year. Is it possible to do this and still allocate it to the 2003 plan year? Can you take the deduction for the 2004 tax year?

I would only add that you can still do it but you should let the client know that they will probably only be able to use the bottom-up QNECS for another year or two until the proposed regs become finalized.

Here is the research. Let me know what you think. IRA_Exemption_Determinations.doc

I think what the IRS may be referring to is the testing of the benefits, rights, and features under 401(a)(4). However, you are not going to need to test for this unless you really had a funky match formula such as <5 yrs of service gets a 50% match and >5 yrs of service gets a 100% match. For your basic safe harbor match there is no need to test this.

From the information gathered, it sounds like you are stuck with an audit.

This was an article posted on Morningstar Advisor.Com written by Donald Moine on 2/18/04. The article said they can send me a list of IRS exemptions. I will try to get this list and post it.

I am seeing the new hype with a new real esate transaction involving the IRA forming an LLC that can purchase your personal real estate. I was wondering what your thoughts were in regards to this new IRA design.

But you have fins. Now that I think about it, how do you type?

I agree with Sal that there is no official guidance. However, I completely disagree with Sal that zero divide by zero is 100%. It is just not mathematically possible. As Blinky previously stated, IRS officials have publicly commented on several occassions that no compensation means they are not in the test.

I don't even think it is a reasonable argument. It is mathematically impossible to divide a number by zero. Also, you cannot be eligible to defer if you have no comp to defer from. IMHO, you should not include them in the ADP test.

Your plan would be exempt from the top heavy minimum and your HCEs can defer the 402g limits without having to worry about what the NHCEs are deferring. However, if they decide to make a profit sharing contribution then you will lose your TH exemption.

The $$ amount is discretionary, not the formula. You have to follow the formula that is stated by your plan document. You would have to explicitly have this written out in the plan document what you are wanting to do.

And then some.

Are they receiving any type of non-elective contribution? If so, then they get the gateway.

After briefly looking over your information I can't see that any combination would constitute a controlled group.

If the employer never cut a check/wired to send to the custodian, how is it segregated from their general assets?

I will have to say that I have never considered a DOL reg as "a wonder to behold".

You shouldn't have any problems as long as you follow the method you prescribed. There are plan docs that do offer the flexibility of picking from year to year. Most volume submitter docs that I have seen recently use this and I have seen a couple of prototypes do it as well.

I believe you just have to add the % to the relative. I don't think Relius has a function to do this.