Tom Poje

one such article can be found here http://www.federalreserve.gov/pubs/feds/20...2/200842pap.pdf the discussion of double taxes on interest (not princiapl, its obvious that is a myth) began somewhere around page 6, the conclusion being that while yes, the effect was minimal. math geeks will love the appendix at the end, maybe back in the old days I would have appreciated it.

in the original preamble to the catch up rules it was actual written you could limit the HCEs to $0 and therefore anything deferred would be catch up. this did not appear in the final copy of the preamble, but that might have been for reasons of space. there certainly does not appear to be anything to prevent one from doing that.

if the discretionary match met the safe harbor requirements (e.g. no eligibility requirements and was capped at 4% of comp) then it would meet the safe harbor requirements, and that would be ok.

well, the regs 1.401(k)-3(e) says a safe harbor plan has to be 12 months long. however (paragraph 4) it could be less if in its final year provided either (i) plan satisfies paragraph (g) [the rules applicable to suspension of match] or (ii) termination is in connection with transaction described in section 410(b)(6)© or employer incurs a substantial business hardship/

since a discretionary was made then it would be my understanding the 'get out of top-heavy for free' rules no longer apply. unless the document states that match can not be used to satisfy top-heavy, it would be my understanding you could use that match to satisfy top-heavy as well.

that's not my understanding. My understanding is that the due date is Jan 2012, unless you are requesting to further have it extended for whatever reason. but yes, if you are requesting an extension for the SSA then in its wisdom the IRS is requirong a signature.

I'm waiting for the webcast from FT William today. according to their e-mail one option is to: 3.Utilize ftwilliam.com's batch fulfillment service to e-file the 8955-SSA. No need to obtain a TCC Code. The fee for the batch fulfillment services will be $10 per batch, plus $1 per 8955-SSA. There is a fee of $0.84 per participant statement, if applicable. Electronic Filing Process Requires No Signature Paper Form 8955-SSAs must have the plan administrator and plan sponsor sign the bottom of page 1. However, if the plan administrator and plan sponsor are the same person, then only the plan administrator need sign. At this time, there are no signing requirements to e-sign. However, it is good practice to send the completed form (on paper or pdf) and ask clients to review, sign and keep a paper copy for their records. if I understand this correctly this would also solve the problem of 'dead' plans - the ones which paid out everyone in 2009 and there is no way I can find someone to sign.

so taking it to an extreme if you have 1 HCE with 10 years of svc they would get 10% of comp (as a match, 0% if they don't defer) and 1 NHCE with 1 year of svc would get 1% of comp (assuming they defer) so "currently" (current available test) how many people are eligible for the 10% of comp match, 1 HCE 0 NHCEs besides failing the ACP test, unless you have NHCEs with the same number of years of svc as the HCE with th most I don't see how it would ever pass BRF unless I'm missing something in the description.

that sounds correct. though you can't aggregate for nondiscrim testing, you have to aggregate for the avg ben pct test

a failure to satisfy nondiscrimination (401(a)(4) or 410(b)) is a demographic failure, generally requiring a corrective amendment to increase benefits, as permitted under 1.401(a)(4)-11(g). however, you have passed the deadline of correcting within 9 1/2 months of pye. 5.01© of EPCRS Because its a demographic failure (rather than an operational failure) you can't correct under SCP, so you can only correct under VCP. (4.01(2)) of EPCRS

for DC plans only the regs 1.401(a)(4)-8(b)(1)(vi)(A) says provide 1/3 alloaction rate (B) says its deemed satisfied if you provide 5% of 415 under the aggregattion rules 1.401(a)(4)-9(b)(2)(v)(D)(1) says provide 1/3 alloaction rate or if less 5% blah blah blah and the rate for each NHCE must be 'at least'... I see no requirement it be the same for everyone, though I hadn't thought about it before. but remember, since the NHCEs could be in different groups, they could end up receiving different amount anyway. plus, if the plan is top heavy, you might be providing 5% based on full year comp, but since the person might have entered mid year when you look at the gateway they end up receiving a 'larger % of pay' based on the entry comp.

you raise an interesting point. under the SSA guidelines you have to provide a statement. so if your statements provides the vested percentage, but doesn't include a blurb "Oh by the way, if we terminate the plan before you are paid out you will be 100% vested" has it satisfied all the requirements?

it doesn't matter what the definition of comp you use for allocation purposes, but for testing purposes it has to be any definition that satisfies 414(s). so the two can be different. and the gateway must either be 5% of 415 comp (though it could be from date of participation) or 1/3 the allocation rate (based on a definition that satisfies 414(s)) thus conceivably you could use a definition of comp for allocation purposes, but would base the 5% gateway on 415 comp or 1/3 of 414(s) comp.

the regs say you can only cross test if you provide the gateway. If I have a group of employees I am treating as otherwise excludable, I could test them on an allocation basis (not cross testing that group). Chances are there is no HCE in that group so that group would pass. Since I am not cross testing that group I would not have to provide the gateway to that group.

I looked up the reference I was referring to, in the case of a dissolution of the sponsor itself the person could not ever return and therefore no longer vest so 411(d)(3) should not apply. ERISA Outline Book cahpet 4 section XII Part A1.e. (2006 edition) but then see 1(a)(2) which points to FSA 1992-1023-1 0% vested people do not necessarily become 100% vested, if the deemed cash-out occurs prior to actual plan termination. I'm assuming FSA means field service announcement??? so find a copy of that and have that handy. as for paying out former terminees before the plan term date, under the regs that would seem viable because the same rules apply as someone who was 0% vested - once paid out they've received their distribution, they then forfeit, because supposedly those people aren't 'affected participants'. all that bneing said, if some of those folks were hces and they weren't paid out but the nhces were paid out and an IRS agent actually noticed I think you might have some problems.

Despite the owner's opinion, the regs are still the regs. A partially vested individual who returns to work must be given the option of paying back his vested portion and having the unvested balance restored. If you forfeit that money and the plan no longer exists, then you have a problem if the person returns. how can you make an additional contribution? yes, in 99.9% of the cases the person will not return or pay back the vested portion. but it's not out right to predict the futre, one has to assume the worst case

since under the regs 1.410(b)-7(d)(5) Two or more plans may not be aggregated and treated as a single plan unless they have the same plan year it is generally recommended all plans have the same plan year. in other words, if that plan failed coverage on its own, you couldn't aggregate with any other plan to pass. but there is no requirement that you change the plan year.

somewhere in the deep recesses of my mind I recall reading (or dreaming) the following: Upon termination, everyone becomes 100% vested. the one exception would be if the company itself terminated, the argument being that it would be impossible for someone who was partially vested to ever return to work and earn possible service. but again, those are only vague memories. but that would seem to make sense. You are going to make everyone else 100% vested, which is basically making an assumption, absent the plan terminating they would continue to accrue years of service vesting - thus avoiding the possibility of a terminee returning and having to have his forfeited balance restored.

the 'illogic' of the body count (at least of including "D", as required by electronic filing) arises in the following situation in which you are filing over a 2 year peiod. (or maybe its simply things weren't thought out properly when they said we could file over a 2 year period) someone quit in 2008, so they need to go on line 6a. someone quit in 2009, so they would be voulntraily reported A on line 6b. that makes sense since I am filing over a 2 year period, if the form had been ready in 2009 I could have reported this person. someone else reported years ago was paid out in 2010. since the form is being filed over a 2 year period you need to report them as a "D". If the form had been produed timely and I had filed in 2009 I wouldn't even know about this person being paid out at the time I would have filed.

upon further review of my counter, the "A" bodies are correct as for the year the "D" body total is correct, but as to whether they are 2009 or 2010 will be off when running a date range from 2009-2010. My current counter will lump all "D" people in 2009, even if they should be 2010. not sure if there is an easy way to tell the system what year they were paid out when running a report over two years. (I suppose it might be possible to look at prior distrib, but probbaly just as easy to tun the report from 1/109 - 12/31/09 and see how many D's show up) of course this results in quite an anomaly. for items 6 the electronic import expects the body count on page 2 = to the values one puts on page 1 (thus you include 'D' bodies) however if you put the count down for a 2 year period, then you put 2009 people on line 6a and 2010 bodies on line 6b. 6b is supposedly for those bodies you voluntarily report - which would normally be people who quit the same year the form is filed. but then why would that item include D people, so that will only add to the confusion.

we just had one plan which moved from one asset house to another, and buried the gains/loss from that sale under 2(B)(4), though of course if the auditors ask we change it I have no problem complying with their wishes. The old asset house had included a 'schedule H' report which showed this as well.

EPCRS 6.07(1) ...as part of VCP the deemed distribution may be reported on Form 1099-R with respect to the affected participant for the year of correction (instead of the year of the failure). this relief..only applies if the Plan Sponsor specifically requests such relief. since its part of VCP I'd think the IRS would tell you the rest of what happens.

oh, if no one goes on the SSA the report will print blank if saved as an excel file I believe it will only show the company name

I've decided to post this version of the report for now. Seem to be having real good success with it, and the wonderful Austin took the trouble to look at it and seems to have success as well. He actually modified the report slightly and I actually like his version of the report better, but I ran into one problem with the report if 2010 is the first year the plan is on the system even though it has existed in the past. Which is why I posted this version) OK, I'm at level 16 and it appears to works fine, he is still at an earlier version, so the D people don't get pulled from the prior year (if the report is printed from 1/1/2009 - 12/31/2010) another possible issue is the amount that shows - possibly may be different if there is an outstanding loan balance. In Relius, run the report out of Custom, save as a File/ Excel (data only) the items in columns A - J can be copied and pasted into the FT William file 8955Sample.csv (when you open up the 5500 in FT William, you have to first click on form 8955-ssa and then return - at that point you will now see an option to upload file.) I've sort of added a counter to the spreadsheet, you can total up the number of D and A people on the excel sheet you create. I had one person show up as an A that had a residual balance of 45 cents, so they showed as a 0, I guess its ok to delete folks like that. had another that showed as a D. usually they show blank for the amount, this one showed as a negative amount, because I'm pulling the vested balance total. I think that was caused by the person being paid out and by the time the balance was forfeited there were some losses, so the system thought he was overpaid. (all account data was imported) so I guess there are one or two items to watch out for. This report can be run across the all plans as well, but of cousre the results only make sense if the plan has processed for the year. people who would have been an A in 2009 and a D in 2010 do not show. working under the assumption that you do not have to report these folks. of course, such report is 'use at your own risk', but as I've said, it looks to me like its doing the job. I think that's everything

seeing how things operate, that wouldn't surprise me a bit. you can't win no matter what you do. or maybe its the difference between self-correcting before an audit and being under an actual audit.