Tom Poje

the following websites http://www.ssa.gov/OACT/COLA/AWI.html contains the info that can be used to update some of those valuations on the plan limitations table I have no idea what some of them might be used for, but what the heck. The National Avg Wage base can be found on this page. Cost of living table found here: http://www.ssa.gov/OACT/COLA/colaseries.html taxable wage base (hey at least i know what this one is used for!) http://www.ssa.gov/OACT/COLA/cbb.html bend points http://www.ssa.gov/OACT/COLA/piaformula.html all the history, how the calculations are done etc are discussed - I suppose if you have insomnia or something like that.

if a plan is a safe harbor, it automatically 'switched' to current year, though perhaps I use automatic loosely, if your document is worth anything it even says so. Thus avoiding a step of actually amending the plan to current year testing once safe harbor starts. For example: 1.5 Actual Contribution Percentage Test. The term Actual Contribution Percentage Test means the nondiscrimination test of Section 3.15 that is performed each Plan Year on a Non-Safe Harbor 401(m) Plan. The Plan uses the Current Year Testing Method to apply the Actual Contribution Percentage Test. In any Plan Year, if ACP Safe Harbor Matching Contributions (including, if applicable, ADP Safe Harbor Matching Contributions) satisfy the requirements of Section 3.17, then the Actual Contribution Percentage Test will be deemed to be satisfied with respect to such ACP Safe Harbor Matching Contributions for that Plan Year. Notwithstanding the foregoing, a Plan that makes ACP Safe Harbor Matching Contributions that satisfy the requirements of Section 3.17 is deemed to have elected the Current Year Testing Method. so unless one puts in an amendment to go back to prior year testing, its current year testing. but you knew all that and were just testing us for fun, weren't you.

if death proceeds RMD then it depends on the document If no beneficiary specified, and document does not contain a provision, must use the 5 yr method Treas Reg. § 1.401 (a)(9)-3, Q&A-4(a)(2) Austin, you old 'man of mystery' - possibly the top secret information you are looking for is buried in something as simple as Publication 575. well, besides the regs, but my copy is in an unintelligible foreign language that I don't understand.

but if there is more than 10 years difference in age it could well be the single life is better. (or if we are not age 80 yet! or something like that) I like your "is the sole spouse". are you implying that you process plans that have more than one spouse?

There once was a fellow named Austin Who complained the results were a sin The tables he tried were so bad so he cried These RMD calcs are exhaustin' .............................................. of course, as I understand it, these are only minimum distributions. I don't think there is anything to prevent you from taking the minimum distribution this year, and rolling the remiander of the balance into an IRA.

my understanding is 'yes', min distribution still required. especially since 416 (1)(A) says 'key employee' means anyone who at any time during the plan year...owned 5% since you indicated the distributions would be sizable, you probably would be wise in reminding the individual the tax consequences involved if you delay the first distribution until 2011.

for all practicallity, if you have ever compared the 2 tables, the factors used for the uniform lifetime table are 12 years different than single life. (at least for most of the factors once you get into the range you are talking about). why the IRS chose that I have no idea.so age 85 single life =7.6 = 97 on the joint table. guess when a spouse dies, the life expectancy drops dramatically in the eyes of the IRS. actually, remeber, the table assumes a 10 year difference, so if the wife is 85 technically the table assumes the husband would have been 95 or a factor of 8.6 (not 14.8)

yes, for better or worse, because the regs say anyone who is a particpant in the plan, not anyone who is a participant for nonelective contributions.

since it is this late, the correction methods are found under the EPCRS program, rev proc 2008-50 Appendix A .03 Failure to satisfy the ADP test set forth in § 401 (k)(3), the ACP test set forth in § 401 (m)(2), or, for plan years beginning on or before December 31, 2001, the multiple use test of § 401 (m)(9). The permitted correction method is to make qualified nonelective contributions (QNECs) (as defined in §1 .401 (k)-6 ) on behalf of the nonhighly compensated employees to the extent necessary to raise the actual deferral percentage or actual contribution percentage of the nonhighly compensated employees to the percentage needed to pass the test or tests. The contributions must be made on behalf of all eligible nonhighly compensated employees (to the extent permitted under § 415) and must be the same percentage of compensation. QNECs contributed to satisfy the ADP test need not be taken into account for determining additional contributions (e.g., a matching contribution), if any. For purposes of this section .03, employees who would have received a matching contribution had they made elective contributions deferrals must be counted as eligible employees for the ACP test, and the plan must satisfy the ACP test. Under this correction method, a plan may not be treated as two separate plans, one covering otherwise excludable employees and the other covering all other employees (as permitted in § 1.41 0(b)-6(b)(3)), in order to reduce the number of employees eligible to receive QNECs. Likewise, under this correction method, the plan may not be restructured into component plans in order to reduce the number of employees eligible to receive QNECs or Appendix B (b) One-to-One Correction Method. (i) General. In addition to the correction method in Appendix A, a failure to satisfy the ADP test, ACP test, or, for plan years beginning on or before December 31, 2001, the multiple use test may be corrected by using the one-to-one correction method set forth in this section 2.01 (1)(b). Under the one-to-one correction method, an excess contribution amount is determined and assigned to highly compensated employees as provided in paragraph (1 )(b)(ii) below. That excess contribution amount (adjusted for earnings) is either distributed to the highly compensated employees or forfeited from the highly compensated employees' accounts as provided in paragraph (1)(b)(iii) below. That same dollar amount (i.e., the excess contribution amount, adjusted for earnings) is contributed to the plan and allocated to nonhighly compensated employees as provided in paragraph (1 )(b)(iv) below. Under this correction method, a plan may not be treated as two separate plans, one covering otherwise excludable employees and the other covering all other employees (as permitted in § 1.410(b)- 6(b)(3)). Likewise, restructuring the plan into component plans is not permitted.

if the match is discretionary it has to be capped at 4% comp, but if its required as long as you are not matching above 6% deferred (not 6% of comp) you can provide whatever %. But remember, it is required. thats why it looks really bad if you are providing a 200% match up to 6% deferred and only the HCEs are deferring. it smells bad. especially if the deferral elections signed by the NHCEs are 0 and there is blood sweat and tears all over the enroollment forms.

what they should do is make everyone calculate the numbers on their own. The sum on the CPI-U values for 2011 is 654.762. enclosed is the 'how to' sheet provided by the IRS by following the example given you should be able to calculate them on your own for 2011. (The sheet is for 2009.) for deferral and catch up the 'base period' value is 654.765 instead of 533.3

yes and no, maybe, and only if I understand the regs correctly. I certainly know of no document you could do this in a single plan, but it seems logically you could do it in two plans. however, you could not aggregate the plans unless you were absoultely guaranteed that no HCE could receive at a higher rate for any level of match. but since you can't aggregate the plans, you have the chance of failing coverage and how would you even handle that if it did indeed happen? and if one plan is safe harbor match and the other 3% shnec I think all bets are off.

these are the historical values for the CPI-U over the last few years (for the relevant 3 month period). the required values for 2011 are noted for the limits to increase next year (deferrals would need a little more). (I have a spread sheet I can plug the numbers and find out) note, we are actually below the 2008 values, but on the average looks like there may be hope for next year. these values are updated around the 15th of each month at http://data.bls.gov/cgi-bin/surveymost?cu (select the first item from the menu) 2005 195.4 196.4 198.8 2006 203.5 203.9 202.9 2007 208.299 207.917 208.490 2008 219.964 219.086 218.783 2009 215.351 215.834 215.969 2010 218.011 218.312 218.439 2011 222.210 222.210 222.210

it is discussed a bit in the EOB, chapter 1, definition of key employee, part C 4 the general conclusion being the person is elibile for top heavy minimum, but in all fairness both arguments are presented.

sometimes you can't see the forest through the trees, so if you get real lucky the individual is catch up eligible. in that particular case, the regs are clear, the catch up does not count toward determining how much the individual received during the year (e.g doesn't count toward 415 either) and so the plan wouldn't have a top heavy due for the year. however, such amounts are considered in determining if the plan is top heavy in future years. so while noted in a previous post, the regs only mention counting them for 404 and 415, no mention is made of 416. but the catch up rules do say you don't count them for 415 or top heavy, so in around about way it would seem you would count them for top heavy if not catch up. this would be consistent with opinions expressed by IRS officials as noted in the ErisaOutline Book.

its automatic with what you set up, you can modify the message any way you wish. this is a sample: ................................................ Your 5500 is ready for a signature. You can log on at: https followed by the rest of the link (so all you do is click and go) You can log in using the following credentials: Username: name or whatever Password: whatever Thank You ...once entering the site, they print a copy of the form for their records, enter their User ID and their pin number and its done.

of course that all depends, stats can lie. for instance, there is a Bobby Jones Golf Tourney where only those named Bobby Jones can enter. Do you say, wow, 100% of the golfers all with the same name. what are the odds of that? or as one comic strip had years ago wow, Lou Gehrig died of Lou Gehrig's disease. what a coincidence.

one usually acceptable method is by using the DOL calculator found at: http://www.askebsa.dol.gov/vfcpcalculator/

if you can't find it, its here: http://www.relius.net/News/TechnicalUpdates.aspx?ID=390 In such cases, I would make sure I had signed copies of those NHCEs who choose not to defer, for example "I realize the plan's match is well over 250% of up to 4% I defer and I am just too plain stupid to take advantage of it. so what if my boss gets a free ride on testing and I get zippo in return." you need to protect the client - if the plan was audited and no one defers but the HCE it looks like no one was ever told.

sorry to disappoint you, this is me! of course everyone had to sign up with the DOL, so that is a step that doesn't matter what software you use. we modified the DOL instructions a little (e.g. instead of showing all items checked, our screen print only showed the box 'filing signer' checked along with a message 'check only this one', so I think we eliminated some of the problems others had. my initial biggest concern was the concept of not 'rolling one set of 5500s from one year to the next, and therefore how much time would it take to re-enter the basic data - plan name, address, etc' that was easy - all you do is type in the EIN number and the info is there. There is a report you can generate in FT William that lists all the 5500s you are working on, along with the status - Accepted, not accepted, not done, etc. along with the plan name, the date invite sent out, the date file accepted, the form (EZ, SF, etc) whether it is on extension, etc. if you have a number of different people working on the forms you can even indicate who is doing whhich plan. since it is an excel file you can sort it anyway you please.

well, at one ASPPA conference they indicated the answer was yes, you could use date of participation comp. having conversed with 'some' IRS officials, there is some disagreement about the bodies about this issue, but for now I think you are safe with that approach. basically, if there are no other contributions, the plan isn't top heavy, so it doesn't matter what comp is used. (But you can't provide the safe harbor to statutory includables only and ignore the otherwise excludables. they made clear anyone eligible must receive the safe harbor)

with QMAC I would agree, but you got me twiddled in circles because your original questioned mention QNECs and I thought that was what you were referring to - as I am much too lazy to re-read your changes. for match you have to have the provision you only count bodies who defer- otherwise any match could conceivable fail the representative rate

ah, forgive the ignorance of your humble servant. then I believe your representative group consists of 50% of all 'eligible' NHCEs (those who could defer, not those who defer.) 50% * 4 = 2 since the lowest rate of any 2 NHCEs is 0% you are traveling up the great waterway without an instrument to propel yourself

I guess I'm not sure why it seems like a 'glitch'. if all you have is 1 NHCE, whether under old rules or new rules you had either 2 choices: refund to the HCEs or kick up the NHCE until you pass.

I personally have never done accrued to date testing, which is the only time account balances would ever be used (in both avg ben % test and ratio % as I understand it). otherwise, if doing annual testing, no the acct balance wouldn't be used. if ee switched from non-union to union, then they would be excluded entirely, but if it is simply a 'category' then it sounds like you are doing things correctly and treating the person as a 0 (includable and not benefiting)