Brian Gallagher

plus, isn't the maximum enhanced 100% of the first 6%? if that's the case, 500% of 5 & 6% wouldn't qualify anyway.

i just read in a sample loan policy that $1000 is the max min to satisfy IRS safe harbor guidelines. i didn't see anything about that in the pension answer book. any thoughts?

The DOL's instructions to send in loan payments timely notwithstanding, we are having a split decision here on how a loan should be set up on the recordkeeping system. Should the loans be set up bi-weekly--as the money is taken out of the pay check? Or monthly, how it's remitted?

Just a note on the post above, you have to sign up as an online member of the Times to view the article. It's free, and you don't get a bunch of junk e-mail. Or you can go out and spend a buck on the paper if you can get it (it nice to have it delivered every morning!).

Just out of curiosity, how would allocating forfeitures to people mess up passing top heavy?

The employer cannot add a safe harbor provision mid-year--you cannot add that mid year. It violates the participant notification rules. Doesn't it?

Is there a threshold on how high a minimum loan amount can be? I thought it was $1000, but we have a plan that has $2500. So how high can a plan go for its minimum?

tell us how you really feel QDROphile!

The SH non-elective goes to all eligible participants, the SH match goes to only those deferring.

No one said it had to be the FIRST $200,000 of comp. People can put in up to the 402(g) limit (assuming ADP passes).

that's what I ment. Sorry for any confusion.

Also, vesting. If you choose to vest the match over time, it wont be safe harbor. Withdrawal restictions: can't allow in hardship distributions.

just kidding!

funny. most people can't tell the difference between a circus clown and a tpa.

with hardships you still get banged with the early distribution tax. plus the 6 month suspension (in most cases). at least with a loan you get to reinvest the money.

if this is a qualified plan, wouldn't an SMM need to be done?

A lot of questions isn't bad, but a few paragraphs would have made it easier to read.

It's time to amend that tax return!

i don't see any reason why you couldn't change, but i would advise against switching back and forth a lot (year to year). if the plan ever gets audited, there better be a good reason for switching to and fro. and, of course, if you change the calculation method, be sure to let the people know (and, i'd put it into the spd, as well).

we are planning on implementing something like that late in 2004. we have a couple clients asking about it. i'd be interested in the feedback, too.

how has the plan been doing these calculations in the past? once you pick a way, i would stay with it. why would a plan want to include contributions after the year-end? it just makes the mrd more.

As for the original question: what is the money source of the dstribution?: Does the document address this? Our default is pro-rata across all sources, but the client can choose any method, such as from rollover 1st, deferral 2nd, match 3rd, etc.

Ashley: § 1.401(a)(9)–5 Required minimum distributions from defined contribution plans. Q–3. What is the amount of the account of an employee used for determining the employee’s required minimum distribution in the case of an individual account? A–3. (a) In the case of an individual account, the benefit used in determining the required minimum distribution for a distribution calendar year is the account balance as of the last valuation date in the calendar year immediately preceding that distribution calendar year (valuation calendar year) adjusted in accordance with paragraphs (b) and © of this A–3. (b) The account balance is increased by the amount of any contributions or forfeitures allocated to the account balance as of dates in the valuation calendar year after the valuation date. For this purpose, contributions that are allocated to the account balance as of dates in the valuation calendar year after the valuation date, but that are not actually made during the valuation calendar year, are permitted to be excluded. © The account balance is decreased by distributions made in the valuation calendar year after the valuation date

did you mean Dec, 1, 2003? (not '04?) if the person did not incur a 1 yr break in service, we count it as is he was employed throughout, as if he never left.

usually we use the account balance as of 12/31 of the previous year to calculate MRD's. i always assumed that this was a cash basis number. one of my clients says that in the past they have used an accrual basis for that number. for example, say the acct balance is $10,000 on 12/31/02, but a match of $3,000 was made in january for 2002. the client is saying we should use $13,000. i disagree. but any thoughts would be appreciated.