Tom Poje

famous last words, but this report should print a 1 page diversification report for all employees who have stock, have attained age 55 and 10 years of participation. it should also list their year of diversification (if they have less than 7). under 'details' their are 2 highlighted fields which list the account name. these would probably have to be changed to match whatever you may have. (The particular plan I have has the cash account, a tainted share account and an untainted share account, so I had to pull data from 2 accounts and none others) You would have to edit the share prices and or dates to match whatever it should be, and possibly some of the verbage (depending on whether this is a preliminary notice or a final notice to participants) hey, it may not be the greatest report, but it appears to work fine on the plan I have.

at the ASPPA conference this year, the question showed up and the answer was look at 1.403(b)-5 which says 401(a)(4) does not apply to 403(b) deferrals.

Maybe it simply works the same as eligibility. you could say the wait is 300 hours in a 3 month period as long as someone who works 1000 hours in a 12 month also enters. thus in a cash balance you can have a last day provision, provided anyone who works 1000 hours receives a contribution. thus, an active person who works 600 hours receives a contribution, but a terminee with 600 hours does not. hey Andy, couldn't get away the ASPPA conference?

of course, being a non-DB person this is only a 'guess' DOL 2530-200b-1a says something about ...an employee who completes 1000 hours of service ... MUST be credited with at least a partial year of particpation.... DOL 2530-200b-1(b) says that a plan which is NOT a DB plan....may provide that an individual who has been a participant in the plan, but who has separated from service...does not share in the allocation...even though the individiual is credited with 1000 or more hours so, since a cash balance is a DB plan, I'd say the last day rule is not possible. (once an individual has worked 1000 hours of course.)

I'd go out on a limb an think the IRS may argue the following: since you could only defer from 10/1 on, even though you matched on a full year of comp, you figure the rate of match based only on comp from 10/1 since that is the period your deferrals started. who knows how they think. At the ASPPA conference one questioned asked in regards to safe harbor plans, was whether a plan could change a discretionary match during the year. (e.g. the match was 50% up to 3% deferred per payroll, now they wanted 100% up to 3% per payroll) and the IRS agents said no, because of the rate of match issue. while your case isn't really the same, in some ways the aspects are somewhat similar. perhaps the issue (at least if a match was involved) would focus on the following: you can limit what comp someone can defer on (e.g. exclude bonuses) as long as someone can still receive the full 4% [basic] match. in this case, comp is limited to 1/4 of the year, so the NHCE would have to defer 16% [as you indciated] to receive the full match.

stopping short of running some test numbers to see what would happen. I'd lean toward saying you would use comp from date of entry, otherwise I think the 'rate of match' gets gummed up, which would blow the safe harbor match out of the water. In a situation like that, I would (assuming its possible) have the document be very specific how to handle. well no, since you get to use 3% for prior year testing, I would probably use that and then go safe harbor in the follwoing year. you are only talking about a 3 month initial plan year.

if the refund was too much, you request return of the excess amount because it was not eligible for distribution. if individual does not return, then you need to redo the 1099, indicating that a portion of the $ is (most likely) subject to the 10% early withdrawal. or at least that seemed to be the opion of the IRS at the 2008 ASPPA conference. granted those opinions expressed are the agents and do not necessarily represent the actual position of the IRS.

the catch-up rules anticipates the possibility of an imposed deferral limit being changed 1.414(v)-1(b)(2)(i)(A) Sum of $ amounts of the limits for the payroll period. 1.414(v)-1(b)(2)(i)(B) weighted average thus, if you read through the example given in B, it sounds like you could indeed create a scenario in which an individual exceeds the limit because you all of a sudden put a cap on how much is deferred. if that individual is not catch up eligible then you could indeed have an unhappy individual who needs a correction due to a plan imposed limit. not sure if that is a good strategy.

I'd go further to say there is no ADP problem to correct. it is safe harbor, the document says so. You have a disqualifying event if not corrected, and that would be nasty. the preamble to the final 401k regs had the following: A PLAN that uses the safe harbor method MUST specify whether the safe harbor contribution will be the SHNEC or the SHMAC and is NOT permitted to provide that ADP testing will be used if the requirements for the safe harbor are not satisfied. The safe harbors are intended to provide ees with a minimum threshold in benefits in exchange for easier compliance for the plan sponsor. It would be inconsistent with this approach to providing benefits to allow an employer to deliver smaller benefits to NHCEs and revert to testing. (ok, so I abbreviated the terms SCHENC and SHMAC) if the plan happened to pass testing without the safe harbor would you argue that you wouldn't need to put in at this late date? unless the IRS comes out and says otherwise, I'll hold to the fact there is no ADP test even if contributions are late.

they are officially out, the numbers are no different than on the spreadsheet (though the spreadsheet used June-July-Aug rather than july-aug-sept) I don't think they are any different than the predictions from a couple of months ago.

Well Dave, you know what I say when you do things like that... "Bad job Walt. Bad job" (for the rest of you, you had to be there, many years ago)

not sure what they are used for (except perhaps PIA calcs in DB plans) on the plan limitation table Bend Points for 2009 are 744 and 4483 cost of living% 5.8 national average wage 40405.48 taxable wage base 106800

and the official Taxable Wage Base is in 106,800 as found at http://www.socialsecurity.gov/OACT/COLA/cbb.html

if these folks are ineligble, don't they show on the 'excludable' report already? wow, someone bold enough to do component testing! 10 points for getting through the work around!

have you thought about baseball?

Sieve: finally had the chance to look up the other reg cite Its 1.401(a)(4)-2©(3) ...the ratio percetage of the rate group is determined taking into account all nonexlcudable employees regardless of whether they benefit under the plan.

what is it they say - I'd rather be lucky then good. Sometimes those guesses work. By the way, it is a good idea to have your customized report elsewhere - otherwise when the next update comes out, it will overwrite what you have on the system, and all your hard work will be for naught. psssst. "Elvis" told me he has song about software updates that he plans on doing at his session

do a search to see if your ADP report exists somewhere else on the computer. If the file you edited exists on the C drive but you have another version that exists under your custom folder, then I believe that is the one it prints.

profusion?

under 'my controls' - then (e mail settings) you can check the box to be sent notification of receiving mail it used to work, though a few weeks ago I had a new message and never was notified (it might have gotten lost in the spam filter at my end) still, in the upper right corner of your screen you should also have an indication if you have any new messages - that is how I noticed I had a new message

I think a more important question would be 'has an auditor even noticed?'

The last thing you need to do is to try and fill my mind with ideas. Its bad enough I heard Elvis ASPPA-resley may come out of hiding and make an appearence at the ASPPA conference.

I was using the table from http://www.ssa.gov/OACT/TR/TR08/V_programatic.html#wp187848 which shows an estimated wage base of 106,500 for all three tables - the low, intermediate and hi. (though I see I had a typo and only had 106,000)

yep, just estimating. I think one of the ideas of this spreadsheet originated with the concept of guestimating the values as early as June for studies. It hasn't failed yet, though who knows what Septembers value will be with the way things are going. but it would have to drop dramatically for the limits to change what they show on the spraedsheet. Good grief. someone actually went out to the web site and looked up the values! 10 points! estimate for the taxable wage base is 106,000 though I am not quite sure how that one is rounded.

This is the file that I have used the last few years. the current input values are from June-July-Aug and not July-Aug-Sept. I believe the CPI-U table is updated every 3rd Wed (that is, it will be the 15th at the earliest of any given month that the new monthly value will be known) By inputting the monthly value into the spreadsheet you generally know ahead of time what the COLA value will be. The integration level is a different calculation so is not on the spreadsheet. Over the years, I have done my best to maintain the spreadsheet, most recently adding the catch-up level as well. good grief. A little history on this spreadsheet. BAck in 1997 I had written a brief Benefits Link article on how the indexed limits were calculated. Someone had seen the article and based on the notes created this spreadsheet and graciously sent me the spreadsheet. In 2002 we had the major regulation change pertaining to the limits (e.g. deferrals were set at 15,000, then 16,000, then 17,000, etc. )All the other limits were also redone, so I tinkered with the spreadsheet the best I could. The first page of the spreadsheet indicates the 'projected' values, the second page provides the spot to input the values for the new year (along with the link to the website to obtain the CPI-U values. There may be a slight rounding issue (e.g. I don't recall if things are supposed to be done to 2 or 3 decimal places), so the unrounded values may be off $1 or 2$ - but I never worried about that. As one of the earlier notes indicated, some of us knew a few months ago what the new limits would probably be, and this spreadsheet is one way of getting that idea.