Jim Chad

When I started this thread I was only thinking about starting the payroll suspension period properly. A new question came up about the end of the suspension period. If someone had signed up for 5% of pay, is the employer obligated to restart that person at 5% of pay at the end of the six month period? If yes, what are the affects of missing the restart by a few weeks or months....or years? Is there a way to make this the responsibility of the Participant?

FWIW, I would take "Plan years" as a way of describing which 12 months are used in the measuring period. I would not take that as saying anything about excluded years. I'm going to be interested to see what others think.

IMNTBHO means "In my never to be humble opinion"

Can you use this definition of compensation for the ADP test? For testing don't you have to use a definition that is either safe harbor under 414 or passes testing? It seems unlikely to me that this definition would pass testing. So I think you would have to count all of his commissions in the ADP test. IMNTBHO

Naveen, First looking at the time you posted this...you have my sympathies. IF I follow you right. This is a matter for the police. Maybe you want to call the DOL to ask them also. As far as recovering the money, the owner can sue the employee, but I would not expect much to be collectible.

Thank you for the answers. His wife will be in the office working mainly with collecting from insurance companies.

One doctor has a corp and a 5 year old 401(k) Plan with the usual 21 and 1 year and dual entry dates. New doctor will start a corp and the 2 corps will form a partnership. They would like the new EGTRRA document to waive eligibility requirements for the doctor and his wife by waiving requirements for anyone employed on or before October 1, 2008. How exactly would this work? What would we do with the nurse hired 2-01-08. Would we just let her in on October 1st or is there something else we would have to do for her? How about the receptionist hired November of 2007? I have read that this is a Benefit, right or feature that must be tested for coverage. On 12-31-08 testing: Who is benefiting? Who is not benefiting? Who is excludable?

By "old amendments received years ago" I meant the amendments we received for GUST Plan Docs. Many of these were only needed for a Plan termination or if we wanted to use a provision right now. One Example would be the 415 amendment we received in December 2007. Should I use this? Do I need to use a seperate amendment or are the provisions in the checklist regarding 415 comp enough for a DC Plan?

I'm trying to get a handle on what tack on amendments I need when I restate from Gust to EGTRRA. I think Robert Richter in Chicago said the following were needed. Please correct me if I'm wrong on the list. 415 PPA '06 402(g) Gap period Heart There are some provisions in the checklist that seems to deal with 415 and PPA. Are these sufficient or do we need the tack on amendment? If we need a tack on amendment, are you using the old ones we received years ago?

Thanks for the reassurance ERISA nut. I thought Hancock was great, too.

I received a note form John Hancock reminding me that one of my plans has 16 Participants who have never filled out enrollment forms. Obviously they are not deferring, they are just getting the non elective contributions. They have not chosen investments so they are in the default investment. They have not chosen beneficiaries so the document will control that Some of these people have been given enrollment packets several times and they never fill them out. Is there any legal requirement for how often we need to remind them to enroll? If no legal requirement, what do other firms do as a standard kind of practice?

I remember someone advocating the facts and circumstances position to eliminate the hassles of the deferral suspension period. I am considering changing the 16 plans I have with hardship to F & C when I restate for EGTTRA. I started with safe harbor provisions with prototype documents years ago and have never used F & C provisions. I have heard that the burden of proof and the employer's liability are greater with F & C. Can anyone shed any light on how much greater or how you handle it?

If there is no employer stock in the Plan, does anyone know of any problems with the document allowing distributions in cash or property?

Unless getting the signature was a major problem, I would amend so I could forget it. I have so few brain cells left, I don't like to waste them on things like this.

A one person profit sharing Plan has nothing left in it except real estate from a long time ago. The company was slowly shut down and has had no income for a few years now. The Participant (owner) paid a few thousand dollars in taxes and expenses. I would rather not go into the reason the plan is still open. He actually has a pretty good reason. 1st question: Is it legal for him to have paid the taxes and fees for the property? Second question: If it is legal, can he treat it as a loan and have tax basis in the plan equal to what he paid?

Thanks Rcline46. That worked.

I have a basic SH match paid monthly and I thought it would be easy to make sure everyone received the correct match by printing the ADP and ACP test. But the SH match doesn't show up on the ACP test. Anyone know a good report on RA or a workaround?

I can't remember ever having heard or read that the requested extension must be used. Can anyone expand on that?

IMNTBHO I agree with you that your approach would be the more conservative one. I also agree with them that their approach is reasonable. This is a judgment call. As the customer, you certainly have the right to request that they do it your way. And you should also expect to pay more if you take them out of their normal system.....and it might be a lot more. It might be a lot more if they have to do your Plan manually because their software is set up the other way. FWIW I think you may want to trust their judgment.

I am curious if I am missing something. The new EGTRRA document, just like the GUST document, makes it very clear that how match forfeitures will be handled is a separate question from how any other forfeitures will be handled. Are there times when they are required to be handled differently?

A client with a June 30 year end for health insurance has a medical reimbursement cafeteria plan on December 31 year end. He asked me if he should change the 125 plan to June 30 to match. I can't think of a reason they need to match. Am I missing something?

I think we may need some clarification. Are you suggesting using an allocation formula that does not have the same list of classes as the document? Are you going to use names of groups of classes? If so, I would recommend against it because of any ambiguity could be a big problem. By the way, it is not unusual for many classes to have the same allocation percent or dollar amount.

I have been trying several ways to approach this. One that seems to be giving me the correct answer is to rate group test on an allocation basis. .....with imputed disparity. Does anyone see anything that Relius does not handle correctly?

Quick reminder: Remember Section 415 limit for current year if they want to put in any money for this year. Also, Since part of the contribution not made was a Safe Harbor contribution, the status of the deferrals and ADP testing may be a problem.

First, I hope you are billing by the hour. My fee schedule includes 2 allocation scenarios and I charge by the hour after that. You may want to mention something like this in any letter or fax. How to attack this problem? FWIW I would start by giving as much as needed to the people with the lowest compensation. Also, if testing on an accrual basis, I would look at giving more to the youngest. Keep in mind gateway and 415. Good Fortune!