Jim Chad

I tend to agree with Kevin on this one. For ADP and ACP testing, we only count those the plan document allows to defer. The definition of an eligible employee, for this purpose, is found in Treas. Reg. §1.401(m)-5. Of course, this works only if you have passed coverage testing, which should always be done first. At least I think it should always be done first. Can anyone point me toward an exception?

Remember I am in the micro plans market as I say this. Those separate accounts need to be set up so that the owner (because he is the trustee) is the one to sign to take money out of the separate accounts.....and the only one who can sign to take money out of the separate accounts. I have seen plans that weren't set up this way with all kinds of operational mistakes. Employees taking loans or hardship withdrawals that were not allowed by the plan or way over legal limits were the most common and biggest problems.

I am confused. (Again) Would you please share with us the document eligibility provision? This post seems to be describing hours without a time period as the measurement period. Or am I missing something (again)?

One quick addition to what Blinky said. If GUST was signed during the EXTENDED remedial amendment period (RAP) you will have to prove eligibility for RAP.

I received a letter last month. And I still do not know why the IRS is sending them out.

Robert was thinking about the "promises to keep".

Does anyone charge extra for those who keep postponing? I think I am going to have a major fee increase from 2009 to 2010. Especially because of the PPA compliance problem.. I use Corbel VS and they are not going to write a good faith amendment for the old GUST doc. So I think I really need to be done by 12-31-09. Ok ....Ok enough whining for today. I'm going to go get some cheese to have with it.

Thanks, Tom

I want to pay devil's advocate here for a minute. Bird, I think you are right about it being for the convenience of the employer. But more important, it was in the contract to get the loan. What gives the Participant the right to change the terms of the loan after he has the money? Can he also change the interest rate? Bret, I think your risk analysis makes a lot of sense. What I wrote above is where I am after 5 minutes. If I thought about this for an hour, I think I would agree with all of you.

FWIW My first thought was that you s should look at the doc and see if it says to use whole years comp. But on second thought, I don't think it is most important if the doc says to use whole years comp. It seems it should be more important to first decide who is eligible and I think it is a given that in a DC Plan, these sort of things would only effect people who work at least on one hour after the effective date of the amendment. If I understand you correctly the amendment has an effective date of 7/1/09. There fore I think that someone who left 5/1/09 would not get in.

Did you mean Plan effective date of 1-1-09? FWIW I think since the Plan is full year you do not prorate anything.

I just want to confirm something really basic. Is this outline correct? Once you have your employee groups figured out, the algebra in BRF testing is the same as coverage testing. First the Ratio Percentage test, must be at least 70%. If that fails you do all parts of the Average benefits test, like in coverage; Both Nondiscriminatory Classification Requirement and Average Benefits Percentage Test (The Nondiscriminatory Classification Requirement can be passed with either the Safe Harbor Percentage Test or -----using Facts and Circumstances and the Unsafe Harbor Percentage Test & classification is non discriminatory based on facts and circumstances) Is this outline correct?

It looks to me like the restatement deadline is 4-30-10 for you (except maybe for the PPA amendment, this amendment might make it 12-31-09) Am I missing something in your situation?

I would have sworn I pressed the send key yesterday. ya gotta love computers.

I am quite certain there is no sort of "universal availability " rule for SH. So I think you have it right.

As you said the SHNEC is a QNEC. So it could be used as a QNEC in the ADP or ACP test under the usual rules.

Lori: I think that refers to a situation where you are cutting a protected benefit and want to do it legally. For example, you want to take out the hardship withdrawal provisions. This can only be done prospectively. You must protect the benefit for current account balances.

You are correct in saying it is not a distributable event. I think I have mostly seen it forfeited and used to pay part of the next years employer contribution.

The higher fee might well be for more time explaining issues and procedures for hardship and loan. I have thought about charging more for hardships because of these experiences. I do charge more for loans. I do not waive or decrease my fee for small accounts. and if the account is smaller than my fee I charge an account closing fee equal to the account balance.

I can't think of any "universal availability' kind of requirement for SH. You say it will pass coverage. I think you are good to go when you exclude them.

There is a sample notice on the DOL website.

Blinky: What is the best way to find that part of the final 415 regs? I did a search for hours, commissions and salary and got some hits: but nothing useful.

That is not a bonehead question. That is a GREAT question? Anybody know the answer?

Earl, Did you type what you meant to in your original inquiry? If I am reading it right, you are sticking it to the highly paid. They are getting less than prorata. ...or maybe I am reading it wrong.

I think you should amend. FWIW