Jim Chad

When an account is less than the distribution fee, I know some TPA's charge an account termination fee. This is disclosed in the SPD. And it does cover all of the work mentioned above. On occasion all the work is quite time consuming even when you find that the total vested account is quite small.

And a Sincere Thank you to all of you. Don, you are so right about this feeling like a community of friends. HAPPY THANKSGIVING!

The 5500 ez is certainly easier than the 5500. And with good software like Third party administrators use, it is very easy. I would think that it would be a big bother to you to read all of the directions to do one return. Could you roll some of this IRA to another IRA and still have the same results?

Buckeroo, you are right on. That is my problem. Most of these employees do not work 40 hours a week, 50 weeks per year. The hours are extremely variable. That adds to the problem of figuring eligibility using only brain power. Looking at another Plan I have that is similar, I have learned over the last 11 years that even getting hours monthly is not enough. My experience has been that Relius brings most people in right. But now, for anyone close, the employer goes to the timecards and checks using the date of hire to 6 months later. By the way, this wasn't my idea. There have been a few years where many months after the profit sharing was put in, the employer came back and told me I missed someone. And this trouble has been on a much smaller employer.

Jennyb473 I realize that Relius would not think her first six months was 7-1-09 to 12-31-09. Hire date 9-18-09. I put in 3rd quarter hours on Relius for 9-30-09. This includes 12 days of his employment. I put in 4th quarter hours on Relius using 12-31-09. This includes hours for 3 months. Now I have hours for 3 months and 12 days I will not have any hours to put in on 3-17-10, the end of the initial 6 month eligibility period. The problem is that if I am receiving payroll quarterly, I will be putting the comp and hours from 1-1-10 to 3-17-10 in on the 3-31-10 quarter and Relius knows that 3-31-10 is past the 6 months for someone hired on 9-18-09.

In Corbel's prototype all three are seperate options. FWIW I always suggest marking the box for death because I don't want to play "let's kick the widow". And I always recommend against the other two becasue I have seen to many sticky situations where it is difficult to say yes or no, this person is retired or disabled.

Does anyone know of an outline of what the ERPA tests will cover? Also, are there any study materials, anywhere?

FWIW I agree with you. Don't need to touch the match. Even if the document says that the period for match calculation is weekly, I still don't think this changes the answer. Was that the reason you were double checking?

With the variable hours these people work, I can imagine or I should say remember, a huge problem...because I have faced it in a similar plan with only a few employees. Example: She is hired on 9-18-09 and works 30 hours that quarter, then works 300 hours the next quarter. My system thinks that the initial 6 month period is July 1 to December 31 and starts looking at her semiannually. But in reality, she works 200 hours in in the part of the first quarter up to February 18th. Now she has meant eligibility and gets in 7-1-10. If she works 500 hours in the first half of 2010, the system brings her in 7-1-10 and everything is fine. But the busy season is over and she may only work 300 hours in the first half of 2010. It is easy to imagine her being kept out for 1 or several 6 month periods too long. And this doesn't even mention rehires. She will miss telling me about some people that I should have included in testing. It has been an aggravation for a small plan. What is this going to be like for a plan with up to 700 people to look at each year? Or am I being a worrywart and I should just let the office manager tell me who enters when and figure that any problems are ......... Tom, you said you do many Plans annually, don't you have a lot of screw ups to fix. Just tonight, I have two problems with two small plans that only send me info quarterly and insist on calculating the SHNEC themselves. One put in too much because they did not stop comp and $230,000 and the other missed a newly eligible entering July 1.

John Hancock will provide quarterly statements. So that part is taken care of. The plan required 500 hours in 6 months to be eligible and dual entry dates. And most people have variable hours from 5 to 40 hours per week. My concern is for example someone is hired in the second half of the year. The first period to look at for eligibility will be the first 6 months. But unless they are hired very close to the beginning of the quarter, Relius is not going to mark them eligible at the correct date. Depending on their hours, Relius may mark them eligible 6 months late. That could be the next Plan Year.

Is this going to be the nightmare I imagine? A company with about 130 participants and about 750 employees over a calendar year pays weekly. (Obviously, they have a high turnover.) They Plan on uploading contributions to the Investment company weekly. The office manager wants to send me payroll data only quarterly or twice a year. The Plan has age 21 and 500 hours in six months eligibility. I use Relius software. I am thinking that if I receive the hours and comp weekly, Relius will do a huge amount of the work automatically. If I get the date 2 or 4 times a year, I think I will have to force a lot. Does anyone have any experience with this on this large a scale? (I do this with some plans with 5 people now)

At a meeting in Grand Rapids, MI, a rep from the DOL said to keep records for 6 years after the due date of the final 5500.

When you said to wanted to max out contributions for 2007, did you mean 2008?

Today I discovered my in-box. There were three messages in it, one of them from December. I never knew this part of the board existed. Now I am wondering what else I am missing? Is there a tutorial for this board by any chance?

Thanks, Peanut Butter Man

Does anyone have a phone number for the IRS in Covington Kentucky? I would like either a phone number or an answer to this question. I am submitting for a determination letter on a volume submitter that looks and feels like a prototype. Of course, I am sending in a copy of the adoption agreement and the IRS approval letter. My question is: Do I need to send a copy of the complete document?

There is one thing that should be clarified. The testing is a little different when testing an employer for coverage under 410(b) vs. testing an allocation group for coverage under 401(a)(4). Here is a rough outline that might be useful. The math used in the ratio percentage tests is the same. Average Benefit Test (ABT) 410(b) The first part of the ABT is the Safe Harbor Percentage Test (If you are brave you may try the Unsafe Harbor Percentage test) 401(a)(4) The first part of the ABT uses the Midpoint The second part of the ABT is called the Average Benefit Percentage Test (ABPT) and is the same for 410(b) and 401(a)(4)

I think ERISAnut is saying that the way to pass 401(a) is to have each separate benefit formula pass coverage. This is the method cross testing uses to pass 401(a). Of course in cross testing you are setting up rate groups based on EBARs. This would be like rate group testing on an allocation basis. Our industry language is very confusing here. The way I finally got this straight in my mind was to do a couple of dozen practice problems with a calculator.

They are not looking at a cash balance plan, just a conventional DB. I expect the Plans are being designed to pass all testing separately. They will cover everyone, so no there will be no coverage problems. If this is true, there will be no gateway requirements. I may not have worded my question correctly. I am not talking about just having a DB Plan. I am talking about maxing it. If we go to 415 maximum in the DB Plan, can I still do the 6% 401(k) Plan?

I have been putting off taking the ASPPA DB test for years. Looks like I need to get started on it. This is the second time this has come up this month. A prospective client is making a lot of money now. He wants to put in a DB plan and fund it to the maximum this year and next. Can we put on a 401(k) Plan also? Is it true that they could have a 3% SHNEC plus a 3% discretionary nonelective Contribution. Will they also be able to defer the 402(g) limit? What is the 415 limit on a combination like this? Also, do I need to watch out for the gateway requirements?

gmag00 Are you asking what would happen if you used a formula of, for example 10% on the excess? If you did this, you would not have a safe harbor allocation formula and you would have to pass general nondiscrimination testing.

I am trying to upload vesting information to John Hancock. I do not have the module that lets RA link to them. Does anyone know of a report that will print in an Excel compatible format and have the vesting for Discretionary nonelective seperate from Safe Harbor?

I would add "unless you are testing excludables seperately.

Thanks, everyone. Kevin and Larry: What both of you said makes perfect sense to me. Since both positions are reasonable, I am thinking I won't get into much trouble. I think the only way this could come up in the future is if someone wants a distribution, I say they can't have it and they call the DOL. Then I explain the situation and do whatever the DOL says. What do y'all think of this?

Doc says distributions are as soon as administratively feasible after the next valuation date. It was set this way when there were quarterly valuations. Then they went to a daily platform for a few years. They decided they did not like the higher costs, so they switched to one big trustee directed account. Valuations will be done annually. I sure would like to hear opinions. Is this a cut back on distribution options if the document is left the same?