Tom Poje

we've had a 5500 accepted and there is a '&' in the plan name so I'm not sure if that is the problem

I'd lean toward a big no. the first implies there is a true up, the second inplies no true. thus the possibility exists (whether it happened or not shouldn't matter) that someone could have deferred the max already, but hasn't gotten the true up yet. if you switch mid year, then the rate of match would be different

Appendix A of self correction (.03) says you can make a QNEC, but you can't test otherwise excludables separately. has to be the same % to all (no semi-bottom ups QNECs, no 'by equal dollar') usually that is more expensive than the 1-1 distribution and QNEC as described in Appendix B

the top heavy minimum is the lesser of 3% or whatever the key employee receives, so it wouldn't make sense to give the non key 3% and allocate a smaller % to the key ee. since the contribution is so small, its basically a comp to comp allocation. each person should receive the same %

see 1.401(k)-2© for when a plan can switch from current to prior year "Because they want to" is not listed among the reasons

Mike: all for 1 and 1 for all. but my typing ability is something else.

in addition, if the plan had a last day rule or hours requirement for match. normally those individuals are excluded from the ACP test. but once you allow after-tax, you have to keep those people on the test as well. and if your recharacterize, though there is no actual distribution, you still have to 1099 and create a 'basis' going forward. as a side bar, now that Roth contributions (whioch of course are ADP tested) are available which would someone want an after tax contributions in which you pay taxes on the gains at distribution time or an after tax roth with no taxes on the gains. hmmmmmmmmmmmmmmmmmm.

EPCRS can't cover every situation. the examples given are generally the most common, so its probably safe to follow the example provided for someone who was allowed to defer despite age and svc. and it would be possible to exclude that individual prospectively - that is always possible as well.

years ago I wrote an example for the Coverage and Nondiscrimination Answer Book so I'll provide that info, its from Q 11:25 and example 11-9. this 'problem' occurs because the APR for someone who works past NRA is lower than that for NRA. therefore, consider 2 people, both making the same amount of money, one age 65 and one age 70. the age 70 individual would have a smaller amount of point through the age weighted formula if you used current age. this would be a penalty on the older person - he receives a smaller contribution, so usually age weighted plans use the APR at 65 for person who continue to work past age 65. but as is noted in the thread, the end result is it creates a larger E-BAR for the individual and appears to cause the plan to fail testing. The key reg cite is Treas. Reg. § 1.401(a)(4)-8(b)(1)(ii)]which basically says dont sweat it if alloactions are made at the same rate for someone after testing age as for someone at age 65. (hmmm, I must have the user friendly version of the regs) since I edit the book, I believe I have permission to give a direct quote ........................... Two employees, one age 65 (Employee 1) and one age 70 (Employee 2), each earn $100,000 per year. Normal retirement age is 65. The plan uses the UP 1984 mortality table, the preretirement interest rate is 8.5 percent, and the postretirement interest rate is 8.5 percent. Contributions for the year total $50,000. If the plan used APR at actual age if one works past normal retirement (assuming an APR of 84.0341 at age 70), the result would be as follows: Employee 1: $100,000 × 95.3828 × .01 = 95,382.80 (53.16 percent of total) Employee 2: $100,000 × 84.0341 × .01 = 84,034.10 (46.84 percent of total) Total Points 179,416.90 Employee 1 will receive $26,581.33 ((95,382.80÷179,416.90)×$50,000) Employee 2 will receive $23,418.67 ((84,034.10÷179,416.90)×$50,000) The end result would seem to be discriminatory toward an individual who works past normal retirement age. To get around the problem of discrimination, most plans are written to use the APR at normal retirement age when determining the number of points. Since both employees make the same amount of money, using the same APR would result in the same contribution for both employees—in Example 11-9, $25,000 a piece. But what happens when you perform nondiscrimination testing (in which case the APR used is for the actual age of an individual who works past normal retirement age)? [Treas. Reg. § 1.401(a)(4)-12, definition of testing age] A review of the E-Bars would result in the following expression: Contribution×(1.085)years to Retirement÷APR×12÷Compensation Note. Neither employee has any years left to retirement. Employee 1: $25,000 × (1.0850) ÷ 95.3828 × 12 ÷ $100,000 = 3.145 Employee 2: $25,000 × (1.0850) ÷ 84.0341 × 12 ÷ $100,000 = 3.570 This would seem to raise the possibility of failing nondiscrimination testing. However, a plan will not fail discrimination testing merely because allocations are made at the same rate for employees who are older than their testing age (determined without regard to the current age rule in paragraph (4) of the definition of testing age in Treasury Regulations Section 1.401(a)(4)-12) as they are made for employees who are at their testing age. [Treas. Reg. § 1.401(a)(4)-8(b)(3)(ii)] ........................ now as to getting relius to generate a report that would indicate this, well I suppose you could go into census temporarily change the date of birth (do not rerun eligibility or anything, just change the date of birth) so it appears the person is age 65. then rerpint the nondiscrim report. after all for calculating the persons contribution you treated the person as if they were age 65. then after you have printed the report change the date of birth back to what it should be

I think the IRS help line can tell you where to get the paper form to fill out, but everything has been in a blur the last month what with ADP testing and document restatements.

the default for an ADP test is prior year. you can always amend to current year, and once amended must be current year for at least 5 years. if a plan is a safe harbor plan, it is deemed to be current year. (This would only make sense because a safeharbor contribution is a QNEC or a QMAC, and its darn near impossible to make such an animal using prior year testing) now, while I haven't seen anything in writing, my logic would be if the plan has been safe harbor for 5 years, then it has been current year for 5 years, so you should be able to amend to prior year (though you can't include the prior year safe harbor, because that would be double counting a QNEC)

I had this one earlier in the year (loan was - or should have been defaulted in 2008), and called the IRS help line and then was redirected to another IRS help line in regards to the proper filing. plus I file 1099R electronically, so this was quite enlightening I am using 2009 1099R software, so as a transmitter I had to check the box 'this is a prior year data' and then for tax year entered 2008. this actually changed the date on the 1099R form to 2008. magic. I guess in your case that would 2007. and then the indiviudal need to amend the personal tax form for the year in question now, how that all works out if you use a paper form, well that didn't register in my mind. this was the IRS line that provided the final answer 866-455-7438

I always cut into 3 pieces. not hungry enough to eat 6 pieces

Sieve- I thought that meant you were considered to be an OX-e- Moron

this is document driven and should show up in the Post EGTRRA document. for example I believe that is covered in an accudraft document checklist by the following: Does code sction 415©(3) compensation include amounts earned during the limiation year but not paid until the next limitation year? As I recall, Corbell documents have similar language. can't speak for any others.

the problem with my picks is someone might misunderstand me when I say I'm behind the president's decisions.

since they are updating some things on the computer and somewhat shutdown processing stuff, I have turned to the dark side (no, I am not running DB plans)... this is the ugly 'invisibles', the clothes are there but the person (people) aren't and you have to figure out what the movie is, from the clothes or the background setting - then type the title correctly into the box correctly to see if you are correct. after nasty ADP testing season you deserve to get frustrated by something else (other than poor basketball picks)

you might want to check http://benefitsattorney.com/modules.php?na...wpage&pid=1 she has posted this chart the last few years as I understand it, other plans are counted when looking at the 401 Unless its a govt 401k) but not when looking at the 403b

it is #9, I mis-read the format of the spreadsheet

Question 10 from the 2008 ASPPA Conference: If matching or nonelective contributions to a §403(b) plan are used in the average benefits percentage test to satisfy the IRC §410(b) coverage requirements, are the §403(b) deferrals included in the average benefit percentage calculation as well? You should exclude salary deferrals from ABT test. See Treas. Reg. §1.403(b)-5.

hmmmm you should have done Bye Bye Miss American PI

Rev Proc 2005-66 5.05(3) states that a discretionary type of amendment should be adopted no later than the last day of the plan year for which the amendment is effective. top paid group elections, prior year/current year testing are certainly not required, so these types of amendments should probably be in place before the end of the plan year (as oppossed for instance, changes required by EGTRRA which are added after the fact)

This will cost you a smile. I used to only charge a nod for looking things up like this. from IRS Notice 97-45 VII. QUALIFIED RETIREMENT PLAN AMENDMENTS FOR HCE DEFINITION (1) Qualified plans that must be amended. If a retirement plan qualified under section 401(a) or 403(a) contains the definition of HCE under section 414(q), as in effect before SBJPA, the plan must be amended to reflect the definition of HCE under section 414(q), as amended by SBJPA. If an employer makes either a top-paid group or calendar year data election for a determination year, a plan that contains the definition of HCE must reflect the election. If the employer changes either a top-paid group or calendar year data election, the plan must be amended to reflect the change. However, a plan is not required to add a definition of HCE merely to reflect a top-paid group or calendar year data election.

as I recall, if a plan does not contain HCE language, then it could operate either as top paid group or not. strange concept, might even be an ASPPA Q and A from a few years ago on this one, but its at my 4:15 limit on a Friday and it has stopped raining and the sun has appeared and I'd much rather leave than do further research at the moment. sorry.

you are correct, if you pass the deadline, it can be plan disqualification, or you can correct under VCP