Tom Poje

I'm not even sure what this would accomplish anyway. those in 2) plan covering those not getting PS due to a last day rule are 0 already because they receive no ps. when I look at group 1 these same folks are also treated as includable and not benefiting so just what does that accomplish?

unless there are NHCEs receiving the same allocation rate (aside from the help permitted disparity provides) as the young HCE then component testing is not going to help. The most common times I've seen component testing done is with HCEs kids who have received a minimum contribution due to top-heavy, safe harbor or other non elective.

for everyone's protection I would make sure I would have a very clear explanation on the deferral election form, something like "I realize I am an idiot for not deferring because the match is somewhere between X% and Y%. Thats free money. but I still choose to defer 0% anyway." seriously though, if few or no NHCEs defer, it will have the appearences of plan set up for the sole benefit of HCEs and the NHCEs have no knowledge of it. The last thing you want is an NHCE going to the DOL and saying they knew nothing about it, even if they in fact had chosen 0% deferral, but there is no record of it.

back in 2004 the IRS issued a memorandum expressing their concern about using short term employees to help pass testing, even though such employees satisfy all the other conditions for nondiscrimination purposes. of course, in their example it was a matter of providing low paid people at the expense of other NHCEs so its not quite the same, but the memorandum does give insight into the IRS thinking. You indicated the people received less than $200. Did these people ever work 1000 hours, or perhaps, they most likely have a break in svc, so are they even eligible anymore? Sounds like a good fact and circumstances situation. I'm not saying they shouldn't be included. for instance, if I was running an ADP test and they were eligible to defer, then you would have to include them in testing.

that sounds correct. QNECs don't serve double duty. Question 6 at the 2006 ASPPA Conference Can a QNEC, used to satisfy ADP and/or ACP testing, also be used to satisfy Gateway testing? A. No. The QNEC can not be used for double duty (Unless the plan was a safe harbor 401(k) in which case this is permitted)

ah, that explains the category name Ha Ha Ha I'm slow, but I get it now.

so Andy, if my crosstested plan uses that term for one of the groups, is that valid, or does that leave too much to the discretion of the owner who exactly is in the group?

K2Retire if you have really good document language it will be apparent how to handle. generally you wouldn't count the person in 2010 unless you specifically checked otherwise. Sample Corbel language not sure what other documents say Administrative delay ("the first few weeks") rule. 415 Compensation for a limitation year shall not include, unless otherwise elected in Section 2.2 of this Amendment, amounts earned but not paid during the limitation year solely because of the timing of pay periods and pay dates. However, if elected in Section 2.2 of this Amendment, 415 Compensation for a limitation year shall include amounts earned but not paid during the limitation year solely because of the timing of pay periods and pay dates, provided the amounts are paid during the first few weeks of the next limitation year, the amounts are included on a uniform and consistent basis with respect to all similarly situated participants, and no compensation is included in more than one limitation year.

you can write a document to exclude anyone you wish, but you would still need to pass coverage and nondiscrim testing. People excluded from a plan are treated as includable and notbenefiting for coverage purposes, excluded entirely from the ADP or ACP test since they are not eligible, and show as a 0 on a(4) testing. generally if they are HCEs that are excluded it only helps testing. On the other hand, you could leave them in the plan and put people into different groups (excluding keys from top heavy minimums) if they don't defer, it helps the ADP test because you hhave HCEs that show up with 0. for purposes of a(4) [nonelective contributions] if they are in their own group, you don't have to provide that group anything and they show as a 0 as well.

this is a modified version of the ADP/ACP correction report. this report shows the results of the test after the dollar leveling - proof that the plan does indeed pass under the old rules. yesterday was the first time I have ever seen the correction 'fail'. ended up with 8.67 HCE and 6.66 for the NHCE after $ leveling. my hand calculation says I'd have to return an additional $10 or so to make it pass.

ha ha never do a refund if you don't have to. once had an ADP test fail, refund was $3. Then under the leveling method had to split that bewteen two other people. yeh, $1.50 a piece. I told the guy, well, you are suppose to refund this. end discussion. course my eyesight aint want it used to be, and my memory is slipping, there is always a chance I will miss seeing if it ever was done. or something like that. maybe my memory is so bad it never really happened.

ok, lets review the facts, because some things are apparently not being understood or missed or something. Plan failed ADP test, and QNEC was provided to NHCE to pass testing. NHCE terminated but worked over 500 hours so is treated as includable for purposes of nonelective contributions. But plan does not provide for a contribution to terminees. the HCE recevived a nonelective contribution the plan. the regulations (1.401(k)-2)a(6) require one to test a(4) both with and without QNECs. therefore, when performing the test without a QNEC the HCE received and the NHCE shows up with a big fat 0. so "Austin Space" needs to provide an additional amount to the NHCE to pass testing (I assume a corrective amendment) or at least that is the way I see the situation

at the 2010 ASPPA Annual Conference the IRS expressed the following opinion Does the rule of parity for vesting permit the disregarding of years of service for a rehired participant who was nonvested at termination in employer contributions but had salary deferrals? What about someone who made no deferrals but could have? If there is a vested amount, prior service cannot be disregarded, even if the vested account is attributable to deferrals. IRC 411(a)(6)© and (D). However, if there is a vested percentage, but no vested amount (i.e., no deferrals made in this example), the rule of parity does permit prior service to be disregarded. it should be remembered, of course that such opinions might not reflect an actual Treasury position, though the IRS personal do look at the questions beforehand.

well, I think that was my logic. they were in class A, and for all practical purposes quit and now started in B so its the sum of the two parts. But the actuary boss is still the boss so I'm looking to see if someone has something in writing, etc. or other basis for this argument

plan has 2 classes. Class A = 10% class B = 5%. person 1 works 1000 hours and switches from A to B. how is the benefit determined? is it the sum of the two parts? document is silent, except for saying is you go from eligible to ineligbile you figure things up to the moment you became 'suspended' and start over once you become eligble again.

for a good recap, you might wish to read the following, but basically says the same thing as PensionPro from Ilene Ferenczy who probably knows more about this stuff than just about anybody https://app.e2ma.net/app/view:CampaignPubli...9f625d645818752

I posted this one a few months ago, but in case you missed it this is a modified summary of accounts reports that mimics the 5500 account data format. I use the user defined fields to track the suspense account changes, so its possible you will have to modify the report slightly if you are using the number fields for some other purpose. of course its a use at your own risk, but I haven't run into any problems with the report. might have to adjust distributions if there was a corrective distribution and other such things, but its the best I can do for now.

success the second time around. This year's import files failed the first time around, there was something wrong with the import file initially but the folks at Oppy appeared to have fixed that. by the way, since this doesn't appear to be documented well on the Relius help screen (I can't find any mention of it anywhere), the Oppenheimer import file is a PAS file and you use FASCore (or I think even GreatWest) as the Vendor Name Looks like this year Oppenheimer has also included a PAS.xls file which could be used if you want to create your own DER routine.

I would agree. Unlike a SHNEC a QNEC isn't allowed to perform extra duty and serve both satisfying ADP test and included in a(4) testing. IRS officials have implied such at the ASPPA Conference

a 'mere' important question, would Relius even attempt to provide a top-heavy for the person or do you have to override. I don't remember. but once they receive a top-heavy, they have received a non elective contribution. and once they receive it, do you choose to not test it any test?

same rules apply to the ADP test. ACP test automatically pases.

if the snow is melting and the window is open and the wind is blowing in the right direction, you could very well be all wet. you are correct, the person is not eligible for the profit sharing but must receive the top heavy. that should be it, but... now you have a situation of a plan in which some people received different percenatges. sounds discriminatory, which could require gateway minimums! in this case 4 of 5 NHCE get the full amount - which means 80% benefit so you would pass using the allocation testing method and no gateway required. I suppose the plan would also pass the gateway using the Broadly Available gateway as well. lastly, the plan could test nondiscrim with otherwise excludables tested separately and the gateway wouldn't be need for her either. such a long-winded answer from a big wind himself.

but if I am working for Company B and it is bought by company A, and company A's plan has immediate eligibility (or recognizes past service with company B) then it seems to me I should be eligibile for A immediately...but then thats why I let others decide whats going on with mergers and stuff to make sure everything is spelled out.

you are getting in over my head. for instance, disregarding the merger of the plans, is everyone eligibile for the safe harbor at the beginning of the year since the acquistion took place just before the beginning of the year?

no one knows for sure as the regs are silent on the issue (they haven't been addressed at this point in time 1.401(k)-5 is for mergers, acquisitions but is simply 'reserved' at this time. I'd lean toward that the safe harbor will exist, the plan before the acquistion would have to be tested through the date of acquistion, but then I'm half out of mind, so my opinions might not be worth trusting.