Archimage

Since you are amending the plan document you need to give participants a Summary of Material Modifications. You have 210 days after the close of the plan year in which the modification is adopted.

You will have to include his distributed amount and the wife's balance in your top heavy test for the 2001 plan year. You would not use either of them for the 2002 plan year. How can you be completing top heavy testing for the 2002 plan year when the plan year is not even complete?

I am not 100% sure about the 90 day period but you still must give a notice in the form of an SMM or SPD when you do amend the plan. I tend to think you still need to use the 90 day period.

You are correct in saying that ERISA does not say this. However, since this is left open, state law may have certain requirements as to who may serve as trustee.

It depends on the company's state law. Some states only allow certain entities to serve as trustees, such as banks.

Never heard the reference of the "SHUSH corridor", but I like it. Mind if I use it?

Thanks for the help, guys. I figured out what I did wrong. I had early uploaded a contribution and reversed it. Well, the data was still in the census data/compensation entry screen. Once I corrected that, everything was fine.

I realize that but it is using the total annual addition amount in regards to the rate group testing.

I am running the 401(a)4 test in Quantech and it includes the 401(k) and match in the cross-testing for the HCEs. How do I get it to stop doing that?

Is step 16 just filling in the number from step 15 or setp 12?

Okay, I am a little dense today. For step 4, if I have an HCE with comp of $132,000, covered comp of $64,248, 11 years to T.A.,and a contribution of $41000 (2003 figures), how do I come up with the accum factor of 2.453?

I am using the ERISA Outline Book as my source of guidance. 1. Is there a Permitted Disparity Factor table in the book for step 2? 2. I don't quite understand step 4 or step 6. I think I may use different terms for these but I am not sure. Can you explain these a little further? Other than that, I think I understand the rest of the worksheet.

I stand corrected. What's to keep someone from amending their plan for two additional months, make another amendment for two additional months, etc.?

I am trying to understand the computation involved in a regular cross-tested plan versus a cross-tested plan that is imputing disparity. Can anyone explain this to me? I can get the computer to do it but I want to understand this additional concept. Basically I want to know how the EBAR is calculated differently with imputed disparity.

I think that would be fine. This is not a benefit that is accrued by a participant.

I am attaching a CIGNA newsletter that might be of some help.

Sounds right to me.

As long as the match formula is uniform and given to NHCEs as well, there is no reason that it would not be okay. An employer might wish to max out to their $40,000 using a safe harbor match of this type. I have yet to see someone want to do it but it is certainly permissible.

I would not call it a safe harbor match either but it definitely satisfies the ADP/ACP safe harbor as long as you keep it in the limits.

The 6% limit deals with what you match, not a dollar limit. You can match 25% of the first 6% of compensation. This passes the 6% limit because your formula does not match on a percentage greater than 6% of comp. Since this would result in a participant receiving a total of 2% of comp match, it would be lower than the 4% limit. In essence, you could have a stated match formula of 300% of the first 6% of compensation and still pass ACP safe harbor.

I disagree. The discretionary match limit is a dollar limit to 4% of comp which is different than the 6% limit on what can be matched. As long as the total discretionary match does not exceed 4% of comp, you are okay.

KJohnson, you lost me. Which match would not be okay? The only match stated above is your example and it looks okay.

I say the ACP testing can be avoided as long as the discretionary match is not greater than 4% of compensation.

I charge my clients extra if they do the scenario you state because it usually results in more work for me. I would recommend to your client to amend the doc to calculate based on payroll frequency or to submit the match on an annual basis.

I do not believe you can use a prototype or volume submitter doc for a multiple employer plan. The nature of a multiple employer plan makes the document a custom document due to certain language that needs to be modified in the document such as the controlled group section. You will have to file for a determination letter for the plan. You cannot rely on the opinion letter for your prototype.