Jim Chad

k-k-kuz This is amazing! Andy said it better than I ever could. Bravo!!

Thanks, WDIK. That is the answer I was looking for.

Putting 1096's on paper with red ink, is not a big bother, but it would be easier to print them on white paper using all black ink. I have heard of people that have never bothered getting the paper with the red ink and never had a problem. Can anyone tell me anything about this? Is the paper with red ink, required or preferred or...?

If you have 1,000 hours requirement for the Profit sharing, she would not get a PS contrib. But she cannot just be ignored for coverage and nondiscrimination testing. If the PS is substantial, than the "non-elective Plan" may not pass nondiscrimination testing. Trying to make sense out of this next sentence used to drive me nuts. Here it is...now stay with me...But we may be able to pass nondiscrimination by breaking it apart and passing coverage. Stay with me and I will try to simplify this. Let's break the non-elective into SH and PS. The SH is a prorata allocation formula. By regulation, this formula is nondiscriminatory and goes to everyone includable in testing. So this passes. If the PS is the usual prorata with or without permitted disparity it is also a design that is, by regulation, considered nondiscriminatory. So all we have to do is pass coverage on the PS. The lady you mentioned would not be excludable from testing and would not get a PS. So You do the Ratio Percentage test. If you pass you are done. If you fail, you look to see if the doc has a Ratio fail safe provision. If it does you start giving people PS according to the doc until you pass. If the doc does not have the ratio fail safe provision, you would run both parts of the average benefits test for coverage. If you still fail, you would start giving people the PS in some "reasonable " fashion until you pass. Then you would prepare an 11(g) amendment do make the document say to do what you just did. Hope this helps.

First I want to clarify that if they work less than 500 hours they can be excluded from coverage ONLY if they were not employed on the last day. In your example, coverage testing would be handled the same way as anytime participants are excluded for last day or hours requirement. Would you like more detail on this?

30 person 401(k) at record keeper platform IC called me to ask vesting on a Participant. Since plan has never had anything but deferral and SHNEC, I said 100%. I found out that the Employer had sent distribution forms straight to investment company instead of to me. I then confirmed that he had retired 2 years ago and asked her to send me copy of the forms When I went through my checklist, I saw the form asked for just $10,000 of a $60,000 account. The Plan Doc only allows for lump sum distributions. It is a Corbel volume submitter with an adoption agreement. I am thinking that asking for the money back isn't going to work. And I think the EPCRS fix would be to amend the Plan to allow partial distributions, at least for this year. He was never an HCE, so there would be no discrimination issues. What do you think? Besides, telling the employer please always send the form to me, what would you do? Would anyone feel comfortable ignoring this as a one time mistake?

Tom is right on but I would like to add a few things. You implied that the match failed the safe harbor conditions, and that is the way Tom answered......but you did not actually say it. Are you familiar enough with the rules to say for sure that it is out of safe harbor. For example: did you know that a fixed match (one defined in the document ) can be over 4% of comp? I am not trying to be a pain in the @&**#. The first time I heard what was possible with a triple stacked match, I was shocked. One other thing about testing...No you can not test match above 4% and ignore the match up to 4%. Good Luck.

It might be on FREEERISA.com in their free area. It is pretty easy to register the first time and then log in.

At first glance this looks wrong. But let's talk about how this could be correct. The first thing that comes to my mind (as little as it is) is that two different definitions of compensation are used: one for allocation of match and a different one for testing. For example was comp used for testing "comp minus deferrals, often called net comp". This can be helpful if some of the HCEs are above the 401(a)(17) comp limit of $225,000 for 2007. This is all I can come up with. Does anyone else have any ideas? Oh and if you cannot find a way that it is correct, I do think you need to correct and then test.

If testing age is 65, than you treat the employee as being age 65. Does this answer your question? or are you asking for the full formula? If you want the full formula, send me a message through this board or email me at jchad@lettinga.com and I will send you the worksheet from my book.

Another question about coverage for match: Did you count as benefiting all those employed on last day who did not defer and did not get a match? This sounds odd, But I am pretty sure that people who did not receive a match for the SOLE reason that they did not defer are counted as benefiting for coverage. As far as the wiggle room for 100% vesting on Partial termination.....I don't think so.

Are the NHCE's getting bonuses of over 3% of pay? What years do you want to work on?

FWIW Here is an idea. The following reg says that if you do not put in the SHNEC for the whole year you will fail to have a safe harbor plan. So you pick a freeze date at least 30 days out and give a 204(f) notice notifying employees that you are cutting back on benefits. As of the freeze date, allow no more deferrals. Then put in the 3% SHNEC and do ADP testing ASAP, make any corrections needed to pass all tests and then do distributions. 1.401(k)-3 (e) Plan year requirement. (1) General rule. Except as provided in this paragraph (e) or in paragraph (f) of this section, a plan will fail to satisfy the requirements of section 401(k)(12) and this section unless plan provisions that satisfy the rules of this section are adopted before the first day of the plan year and remain in effect for an entire 12-month plan year. In addition, except as provided in paragraph (g) of this section, a plan which includes provisions that satisfy the rules of this section will not satisfy the requirements of Sec. 1.401(k)-1(b) if it is amended to change such provisions for that plan year. Moreover, if, as described under paragraph (h)(4) of this section, safe harbor matching or nonelective contributions will be made to another plan for a plan year, provisions under that other plan specifying that the safe harbor contributions will be made and providing that the contributions will be QNECs or QMACs must also be adopted before the first day of that plan year. Documents: One idea restate for EGTRRA as of a date after the freeze and before termination. Since the Plan will do almost nothing under this document, maybe you can cut the fee. I would. This is just my thought, FWIW.

You get PAID for your lunch hour? WHERE do you work? We don't even get lunch hours.... we get lunch minutes!

They are hours the employee is paid for, I don't see a legal way to exclude them. Does anyone else?

Kevin C is correct, Also, I believe that the employees not getting a match because of last day should be excluded from the ACP test. Also, Have you tested the match for coverage? If it fails coverage, you may be required to give a match to some of them.

FWIW I think you are right on. The maybe notice only refers to the 3% SHNEC. The employees have to be notified of the match safe harbor before the beginning of the year.

Termination from employment is not a factor in distributions and rollovers from IRA's including SEP's and SIMPLE's,

If the only contrib in a safe harbor plan are deferral and safe harbor the Plan is deemed not top heavy. Any forfeitures being allocated as non elective?

I love Firefox but was surprised to find it does not work well with the ASPPA website. You can only go down a few levels. When I was trying to find a book I kept getting stuck. When I called for help, the lady had me try many things and then finally asked if I was using Firefox. When I said yes, she suggested I try IE becasue firefox doesn't work well. I switched to IE, went back and had no problems.

Thanks, guys. I'm at version 14 and still working like I did years ago. I did not realize that everything like comp and DOT's carried over immediately. I was still transferring everything with a DER. Thanks, again.

Let me emphasize and clarify. FreeERISA and the DOL have copies that are different. The DOL matches my copy of a signed 5500. The amendment box is checked and it is definitely done by the software when printed. FREEERISA does not show the amendment box checked. As I said the DOL does. I feel like I have entered the twilight zone.

What changes to 5500's have people heard of being done by FREEERISA? Looking at 2005 form the date is handwritten, the signature is deleted (a good thing). But here is the odd part. The box for amended is unchecked and my copy and the DOL show it checked. Has anyone seen anything like this before? Any guesses as to why?

FWIW, I believe it is legal....but why would anyone want to do it? This is a fee that can be paid from the account using money that is part employee's and part IRS's.

Could the employee realistically have been able to afford to make the payments on the loan? You may want to look in your document to see if a loan was really required under these circumstances. I am fairluy certain that the regulations do not require a loan if the loan payments would add to the hardship.