Tom Poje

I would of thought that no, the person is not entitled to anything more - he received 3% and whether it gets distributed or not I would have thought is a moot point. but your question raising an interesting point. suppose all the NHCEs defer and receive match sufficient for top heavy. a non key HCE doesn't defer, so is owed the top heavy. if you provide it as a nonelective, then you have 1 HCE with a nonelective contribution and no NHCEs. how the heck do you pass coverage?

or, as the IRS officials indicated at one of the ASPPA Q and A sessions in regards as to whether a CODA has been created. "We will know abuse when we see it"

I know with FT William you could create the data on a 2009 form, but then you create an xml file, which is imported into 2010 at the DOL. (as of 9/15 they have released their 2010 forms (according to the most recent e-mail), but I haven't tried them yet) In other words, I think at the time they knew what was needed, but they didn't have the forms ready, so the XML pulls the correct data and order or however those things need to get imported electronically.

the current CPI - U (Consumer Price Index) values for July - Aug 2010 are 218.011 and 218.312 Two years ago the values for July - Aug - Sept were 219.964 219.086 218.783 since we are still below those numbers, there will be no change in the limits next year (stopping short of some type of regulation change). In fact, before the limits will go up, the values for the three month period from July - Sept must average 222.2 so, looks like everything will stay the same again for 2011.

I think no matter what the investment house, its going to depend on the person involved. talking to an individual at Bible study last night, an individual who works for one of the above mention houses, she said she 'could' do something like that and get her 'cut', but wouldn't because she has to sleep at night.

apparently this has passed the Senate http://www.businessinsurance.com/apps/pbcs.../NEWS/100919932

The understanding is correct (note this is Q 4a, so it was a clarification of Q 4 which simply said you file using the current year 5500. Q and A's are found a thttp://www.dol.gov/ebsa/faqs/faq-EFAST2.html Q4a: Can filers use the Form 5500-SF to file 2008 or prior year delinquent or amended return/reports? No. You may not file the Form 5500-SF for any 2008 or prior plan year return/report. Filers wishing to file or amend their plan year 2008 or prior Form 5500 must use the current Form 5500 to submit that return/report in accordance with the directions in FAQ 4. Required schedules must be included in accordance with the procedures described in FAQ 4. Filers wishing to file or amend their plan year 2008 or prior Form 5500-EZ must use the correct prior year paper version only and must file it with the IRS. Filing electronically using EFAST2 on a Form 5500 or Form 5500-SF is not allowed. Filers should contact the IRS at 1-877-829-5500 for further information. --------------------------------------------------------------------------------

the regs due say use the compensation definition for the plan being tested. 1.401(k)-2(a)(3)(ii) since the 401k feature terminated I'd assume that means you wouldn't count comp after that date. this would be no different than someone who switched from union to nonunion (or vice versa), which as I understand it, you only count the comp for the portion of the year one was eligible. it would also prevent the owner from deferring the max in January, shutting things down, but then getting the advantage of determining the ADP % based on total comp but that is only how I would try to reason things out.

in other words, if the nonowner had the higher comp you wopuld have 2 HCEs. or put another way, list all HCEs by comp. now add to that list 5% owners. don't start with the owners and say, I already have enough HCEs so I woont look at comp.

any 5% owners are HCEs no matter what the comp. my strategy was to run the top paid group first (in your case, grab the highest paid of the 2 ees) and then add back any 5% owners. if there is a tie in comp, the regs say use any tie breaking procedure that will pass the test....er I mean any reasobale criteria to break the tie. why they woud have the top paid group election with 2 employees and both HCEs is beyond me. If they are both HCEs you pass testing no matter what.

this would be news to a lot of people that electronically filing is required for the EZ. the instructions for the 5500 EZ say The 2009 Form 5500-EZ will filed on paper only and cannot be filed with this electronic system. Instructions further state:(top of page 3, the NOTE) Filers of Form 5500-EZ are not required to file schedules or attachments related to Form 5500 with the 2009 Form 5500-EZ. (I wouldexpect in the future this means it may be required??) However, you must collect and retain for your records completed Schedule MB (Form 5500) for certain money purchase plans, if applicable, and completed and signed Schedule SB (Form 5500) for single-employer defined benefit plans, if applicable. Even though you don’t have to file the Schedule MB or Schedule SB with the 2009 Form 5500-EZ, you are still required to both perform an annual valuation and maintain the funding standard account for all plans subject to the minimum funding requirements of section 412

if it was necessary to use the avg ben % test then yes you would count all, but for that test only

I'd stick to my initial comments that its unclear - at best at how you read the regs. And I'm glad most people agree that all comments mentioned are only 'opinions' if the regs said "to the extent that the total required minimum distribution under section 401(a)(9) for the calendar year has not YET been satisfied." then I would agree you absolutely are stuck. so it all hinges if one applies the term 'first' in an example to all cases. ee has balance of 10,000. min distrib is 100. all $ in non interest bearing account so you can't have a decrease in any value, just for the sake of the argument. ee rolls 9000 to an IRA in January, takes 1000 min distrib in Feb. (or for that matter, I guess if 2 checks were cut the same day, but the rollover was printed first, you are still screwed because order is important. ) I have my leanings (though I understand the counter argument) saying this is ok, because to the extent the min distrib has been satisfied has been accomplished. (in addition, even under EPCRS Appendix A section .06) the correction for a missed min distribution is to simply make it - there is no mention of "by the way, if you already rolled some money out you have to treat part of the rollover as an ineligible distrib', but then again, you are back to relying on examples. fun stuff! (glad I'm not in that position) ............... stupid English language. I rememebr the last time something like this came up with failed ADP test and how to handle related matches - the expression "related matches may be forfeited" - and people were reading that as "they may be forfeited, but I don't have to". but the 'may' referred to the fact that even though the match might be 100% vested it was permissible (required) to forfeit such amounts.

without looking it up, I thought the rule was that if you had any amounts above and beyond safe harbor you ran an ACP test on the entire match, with an option to exclude the first 4% or something like that.

actually I received a note from a TPA that read as follows ( I'm worried I may be an accomplice) I am forwarding you copies of the amendments for the XX and YY Plan. They signed it and have executed the individual classes of partners. Thanks for all your help. man, I know times are hard, but when you have a last day rule and don't want to give a contribution I guess things can get real rough.

this should be fun. the IRS will look for a 5500 for the EIN begining with 28 even though it is impossible. they will send you a letter with a penalty because you haven't filed and you are late. you know they won't be able to read the attachment to see that the EIN was changed - in fact they will probably wonder why you never filed on the plan before since it has assets, but they have no record of the filing under the new number. (I only say this because awhile back we received a leeter asking why we didn't file for a plan, and this was one where the EIN was changed, and properly noted in item 4, yet they didn't recognize it was changed)

the problem is that in the example cited, there is no mention if there was any balance left in the account after the rollover, or if an additional distribution could have been made. the regs do contain the sentence that says "To the extent the minimum distribution has not been satisfied". I don't see anything that says the min distrib must be made before any other rollovers, especially since min distributions aren't due until the end of the year. By that argument, you could never rollover or take a distribution without first taking a min distrib. the only possible issue in this case, is for awhile, at a given moment in time there was no balnce to pay out the distribution. thats the only situation I could see the IRS arguing the point. now, under EPCRS, what is the correction for missing a min distribution? you simply make it. is there enough to make it? yes.

A little research implies this question may be answered (based on comments, the usual really awful Hollywood movie) "...'Jellystone Park' has been losing business, so greedy 'Mayor Brown' decides to shut it down and sell the land. That means families will no longer be able to experience the natural beauty of the outdoors -- and, even worse, 'Yogi' and 'Boo Boo' will be tossed out of the only home they've ever known. Faced with his biggest challenge ever, Yogi must prove that he really is 'smarter than the average bear' as he and Boo Boo join forces with their old nemesis 'Ranger Smith' to find a way to save the Park from closing forever..." Dan Aykroyd is the motion capture and voice for Yogi Bear, Justin Timberlake is the motion capture and voice for Boo-Boo Bear, Christine Taylor is the motion capture and voice for 'Cindy Bear', Tom Cavanagh is Ranger Smith, Anna Faris is 'Rachel' T.J. Miller is 'Ranger Jones', Andrew Daly is 'Mayor Brown', Nathan Corddry is 'Chief of Staff' and Dean Knowsley is 'Agent Florimo'.

the min distrib rules are found in 1.401(a)(9), but in this case they refer to 1.402© its real clear from point (b) that it doesn't matter if the person wasn't 70 1/2 when the distribution took place (unless it was before Jan 1 of the year one turns 70 1/2, but that seems like a moot point) so it is going to boil down to how you interpret the description in (a) The example used speaks of 'the first $ distributed will be treated as the RMD', but in this example there were no other distributions, so that would have to be the case, but I'm not sure if it is applicable in all cases. for instance, if I had a beg bal of $x and the min distrib was $y and I rolled out ($x-y) on Jan 2 and paid out $y in Dec I don't see how I have failed to satisfy the requirements. The first sentence in this paragraph says the rollover is treated as the RMD to the extent the distribution has not been satisfied. (of course, all that is how I read the regulation and I could be way off the mark) You are of course taking a chance you will have enough to satisfy the requirement, and in determining the RMD you have to consider the amount that was rolled over because it was part of the begining balance. Q–7: When is a distribution from a plan a required minimum distribution under section 401(a)(9)? A–7: (a) General rule. Except as provided in paragraphs (b) and © of this Q&A, if a minimum distribution is required for a calendar year, the amounts distributed during that calendar year are treated as required minimum distributions under section 401(a)(9), to the extent that the total required minimum distribution under section 401(a)(9) for the calendar year has not been satisfied. Accordingly, these amounts are not eligible rollover distributions. For example, if an employee is required under section 401(a)(9) to receive a required minimum distribution for a calendar year of $5,000 and the employee receives a total of $7,200 in that year, the first $5,000 distributed will be treated as the required minimum distribution and will not be an eligible rollover distribution and the remaining $2,200 will be an eligible rollover distribution if it otherwise qualifies. If the total section 401(a)(9) required minimum distribution for a calendar year is not distributed in that calendar year (e.g., when the distribution for the calendar year in which the employee reaches age 70 1/2 is made on the following April 1), the amount that was required but not distributed is added to the amount required to be distributed for the next calendar year in determining the portion of any distribution in the next calendar year that is a required minimum distribution. (b) Distribution before age 70 1/2. Any amount that is paid before January 1 of the year in which the employee attains (or would have attained) age 70 1/2 will not be treated as required under section 401(a)(9) and, thus, is an eligible rollover distribution if it otherwise qualifies.

please note the cryptic message above from Mel2. I usually delete these if I see them, but left this one on as a 'watch out' if you look carefully, you will see a 'link' - "make money online", it is real light. first time I've see it done that way. guess they are hoping you will accidently click on it.

but any safe harbor plan that has the possibility of forfeitures has that potential problem. I believe the most common recomendation was to pay plan expenses first from forfeitures. hopefully this topic will be discussed or explained in greater detail at the ASPPA conference. then we can find out if it is simply one IRS agent's opinion, if its a matter of technically thats what the regs say but we wont pursue it, etc. I could see Craig Hoffman arguing this one and ending up with the "we agree to disagree" response.

well, based on the comments above, it sounds like forfeitures shouldn't be used to fund QNECs (and as a result, safe harbors) so how do you handle things when you have a pre-approved document? of course, there is nothing requiring you to do so, but of course if pinching every penny makes a difference tehn it is understandable one may want to do this. best I can say is I submitted a question for the ASPPA Conference. they usually meet sometime in September, hopefully they haven't metyet and this one will be discussed. I believe in the past, the IRS attutude was they wouldn't push the issue if you did it in the past, but I am not sure on that.

but its also true that years ago (many) the fail safe language in their documents said you could pass either either ratio percentage or avg ben test, and this was later changed to ratio percentage only. also, years ago, many documents (not just Corbel) contained language for safe harbor 401(k)s implying it was driven by the safe harbor notice and the IRS made such language be removed, so I would be careful about making a blanket statement....

I can't, but then, others already have, so why bother.

is that a hint? never used that report before, my first attempts at generating anything resulted in no names appearing on the report. shows you how much I know about that report. Then I found out additional selections the year showing was 2010 instead of 2009, so once I set that to 2009 it pulled names. what you could do to the catch up elig report is to add the following formula if ({RPTEE.METCATCHUPELIGREQDATE}-{RPTEE.BIRTHDATE})/365.25 < 49 then "Check catch up date" this will take the catch up date and subtract off the birth date and give a warning if it less than 49. I manually changed someone to give a bogus catch up date in an earlier year and it actually produced a warning message. Have to use 49 instead of 50 because the catch up date is set to the beginning of the plan year (when the person is still 49) rather than the actual date someone turns 50. That's about the best I can do off the top of my fool head.