Jim Chad

When testing each rate group against the mid point ( sometimes called the nondiscriminatory classification test) you should use A, Without deferrals. When testing 401(a)(4) the only place you would use deferrals is in the Average Benefits Percentage Test. In the Average Benefits Percentage test you would use all annual additions.

Unfortunately, yes they can treat HCE's differently. It is possible that HCE's are excluded from match. It is also possible that someone mistakenly classified this as a catch up contribution and did not match it because your Plan document states that catch up contributions will not be matched. You may want to check with payroll departement or human resources to find out who knows the rules. And then ask that person to double ccheck this for you. Some of this information might be in the Summary Plan Description. If you do not have one, I would suggest you ask human resources for one.

Does anyone know of a report in Relius that shows stock ownership, both direct and by attribution?

It sure looks to me like no one was employed on the last day of the year and therefore no one has a right to a Top Heavy contribution.

I work for a CPA firm and it seems that one of these pop up about every other year. I have always filed returns for 3 years and have always seen all penalties waived by the IRS. Note: Be sure and send to IRS not PWBA or EBSA. These are Department of Labor, (old and new)

The old TPA of a Plan I am taking over badly mixed up the records when they took over a Plan a few years ago. For many people, they have some or all of the SHNEC (Safe Harbor NoneElective Contribution)money mixed in with the SHMAC (Safe Harbor Match Contribution) money. I think it may be possible for me to straighten this out. But maybe not, I am trying to get records now. I am sure it will be a heaache. In the future the Employer does not expect to ever put in a match, again. I would like opinions: What do people think about just having both types of money in the SHNEC account from now on?

Austin Were you saying to check the document? For example if all employees paid on commision were excluded in the Plan document and there was 1 salesman, the following would occur: 100% of the HCE's receive a benefit 1 NHCE is not excludable and 0% of the NHCE's receive a benefit. This Plan would fail coverage. Is this what you were getting at?

I was hoping one of the smart people would reply. They didn't so here goes: Let's see if I have the picture right. The company is laying off everyone except the owner and selling all assets. The owners will continue to work for the company to collect receivables and oversee the moving company taking stuff out. The owners will be the only ones still employed on last day and the only ones with greater than hours. Since you can exclude from coverage anyone terminated with less than 500 hours you are thinking you have an automatic pass on coverage. I agree.

I have seen 11(g) amendments do many things. But this thread refers to something I have not seen. Can an 11(g) amendment be used to change the allocation classes in a new comparabilty plan after the end of the Plan Year?

Safe Harbor contributions are not available for hardhip. SHNECs and SHMACs are available for in service at 59 1/2. 1.401(k)-1(d)(3)(ii)

Probably, your only chance is if there is a last day requirement to reciceve an allocation. If this is a calendar year plan, no one will have met the requirement until December 31st. If all you have is an hours requirment, as soon as one Participant has the required hours, you cannot amend to change the allocation groups. IMHO

This would fail the Ratio Percentage test for coverage. But it may pass the average benefits test. Everything sounds reasonable and and it would pass the safe harbor percentage test. The question is, would this pass the average benefits percentage test? Your document probably has the option of choosing the "ratio failsafe" provision. You have to make a guess at the future to decide whether or not you want to choose it.

Did you mean "move an NHCE into a different allocation group"? This way the NHCE would get a different contribution amount and be in a different rate group. My understanding is that the allocation group is defined in the document. Another way to put people into a higher rate group for testing would be to give everyone in the allocation group of that NHCE a higher contribution amount. As for your question about amending; you can amend until someone has met all allocation requirements. Are you looking to amend after the Plan Year has ended?

To add a little to what MWyatt said: Some documents allow 500 hours and 6 months. If your document allows this, you would be bringing in all short timers. But not necessarily all part timers. And this would only apply until you amend back to your current eligiblity provisions.

The employer can amend the document to allow for in service withdrawels. But it is not required in any way.

I understand that a MPP was terminated. Were the Participants allowed to roll their money any where they wanted and even take it in cash? This would allow J & S to be eliminated. If the Plan was truly merged into the 401(k) with no other options given, then, I thought, J & S went on forever for that money source. How was the termination of the MPP handled?

I have a Money Purchase Pension being audited. Because of different eligibility rules, this employer has kept this along with the 401(k) Plan. To get a better fee structure, this was set up at John Hancock as combined account with seperate recordkeeping. The IRS auditor would be more comfortable if there was a statement that said Money Purchase Pension and did not have deferral and SHNEC contributions listed. So far he hasn't pushed the issue. But I am wondering: does anyone have any experience with this? Does anyone have any thoughts about it?

Is the idea that he wants the flexibility to put in a contribution for himself in some years and not in other years? It would be unusual to prefer deferrals which are subject to payroll taxes. The Safe Harbor Contributions are true employer contributions and not subject to payroll taxes such as medicare tax.

Does the Plan doc allow it to be on a per pay basis? Does the pLan have an IRS approval letter? If no to either of these questions, I would operate it on an Plan year basis. Also, any last day or hours requirement? That would require operation on an annual basis. One other thought, Would you have to test for coverage or nondiscrim every pay period?

If I understand you correctly, an employer is questioning your numbers. Is that correct? If that is correct, email me at Jchad@lettinga.com and I will send you what I Put together to teach myself this.

Thanks. I have found a combination of settings that works. Now my question is: How can I tell it to print darker? When I use Adobe Pro - 7 it prints lighter than when I scan as a JPG and print in paint.

Hi Denise: You have my sympathies. We are always encouraging our employers to email us an excel sheet that has the following format: Last name, first name, soc #, Date of Birth, Doh, hours, comp, 401 deferrals, dates of Term A few thoughts, our DER (data entry routine) has a pad for DOH because employers too often put rehire date in there. We enter DOH by hand Also, when we did have a pLan where comp did not include deferrals, we had one more column for secion 125 deferrals We have a pad for the DOT column and enter those by hand, also.

When I scan a page into a PDF, Adobe 7 prints it wrong. It always moves it to the edge of the page high and right. Does anyone know what I am doing wrong?

I just saw the thread on subscribing to a forum and it looks terrific. I have a problem in that I signed up a long time ago using an email address that gets so much spam, I don't want to use it. Is there a way to change my email address?

Thanks, Tom