Tom Poje

suppose you pass the notices out today - would people still have a 'reasonable' time to make a decision? probably yes, unless of course they are off on Christmas vacation already. remember, the 30 days gvie you an IRS guarantee of providing a reasobale time. If the number of ees effected is small, if they were personally told, etc are all factors that could come into play in deciding if you are being reasonable.

This is a very bad joke. The punch line is going to hurt. What is really sad is I drag it out so long. I wouldn't be surprised if Dave Baker kicks me off for this one. Exit now before it is too late. Ok. You were warned. Our story takes place in Russia, back in the good old days, before the glorious revolution, before there was talk of ‘proletariat’ and ‘bourgeoisie’ and other terms I have no idea how to spell. And it concerns a certain Rudy Rudovich, who lived in one of the small villages that surrounded Moscow. Rudy was a poor dirt farmer. That is being kind, perhaps in a good year he had a bumper crop of ‘dirt’. You see, Rudy was missing a few screws, so to speak. And our hero was quite the hen-pecked husband. Once when I was telling this joke someone stopped me and said I shouldn’t be redundant. Hen-pecked and husband go without saying. Now, I have to take the individual’s word for it. I have never been married, and as I am in my mid 40’s maybe I will never find that out. Well, anyway, it was “We need more firewood, Rudy” and all he could reply was “Yes, dear.” Or “Are you done with the dishes?” “I will get to them as soon as I finish the sweeping, dear”. Poor Rudy. Day after day. Month after month. Year after year. If I had more time, I would explain where the term ‘hen-pecked’ comes from. But that is another bad joke, and it’s Christmas, and having you hear one bad joke is unkind enough for the season. One spring day, the sky was dark and threatening. But it was mid-April, and Rudy always sowed the seeds that day, and he wasn’t about to break his pattern. His wife had invited some ladies over. They were playing bridge, and drinking tea, and eating cupcakes with frosting on them. You know, the ones cutely decorated with those little round silver candies on top. Yeh, I thought you knew. Well, Rudy grabbed his seed pouch and headed out the door. Oh, maybe some of you don’t know. Those little silver candies are called dragees. You can get about 2 ounces of them for a couple of bucks. Well, maybe if they are on sale you can get them cheaper, but they are not that expensive. And you get so many of them, I don’t think they would ever sell them in bulk. Did you ever read the label on them? It says ‘Use only as a decoration’ and ‘Non-edible’. I’m not kidding. That’s why they make them out of sugar so kids won’t eat them. Yeh, right. But seriously, look at the ingredients: Sugar, corn starch, gelatin, acetic acid and silver. Honest. They actually use silver in making these. That’s why you aren’t suppose to eat them. You could get silver poisoning. Oooohhh. A plot for a muder mystery. Slowly poison someone by…oh, that’s another story. Anyway, do the math, silver sells for around $4.50 an ounce [gee whiz, 5 years ago, now its around $14.50] and you purchased 2 ounces of these things for a couple of bucks. There must be enough silver in these things to, hmmm. And that would be if you ate the whole container of them. Guess I wouldn’t lose sleep over whether you ate any or not. Ok, see you learned something new, so maybe it was worth reading this far. Now leave before you get to the punch line because it is going to hurt. Where was I? Oh yeah, Rudy was going out the door to plant the crop. About 5 minutes later there was a clap of thunder, and the skies burst forth with a torrential downpour. Of course, one of the ladies blurted out “Guess it won’t be long before your husband comes back, huh?” to which his wife replied “Rudy? That idiot hasn’t got enough sense to come in out of the rain” And so it was true. One hour, two hour, all morning rain, rain and more rain. And still Rudy had not returned. Finally, about lunch time Rudy swung open the door, soaking wet. The ladies looked up at this somewhat pathetic looking figure, but rather than express any words of comfort or sympathy, there was nothing but giggles. And then his wife let into him. “Don’t you dare track mud in the house” “Yes, dear” “And don’t you dare hang your wet things over the furniture” “I won’t. dear” “Rudy, I swear, I don’t think you even know what rain is, do you?” “Guess I don’t dear” Looks like it’s gonna be another banner year for the dirt farmer! So spring passed by, summer followed. One Wednesday evening, about 7 there was a knock at the door. Rudy’s wife looked up from her book and shouted “There is someone at the door” “I’ll get it, dear” Rudy said, emerging from the kitchen, soapy hands, apron and all. He opened the door, and standing there 6 individuals – members of the newly formed communist party. They had a very good sales pitch. “Be a Red, or be dead”. A convincing argument, especially when accompanied by the guns they brandished. They wanted Rudy to go their meeting that night, and, though he wasn’t the brightest, Rudy knew it was in his best interest to go. He had started to walk out the door when that old familiar voice resounded “Not until you finish the dishes, mister” Rudy returned to the kitchen “Of course dear. How silly of me” One of the communists took a step in and said “Listen lady…” but that was as far as he got. “Excuse me. Did I invite you in?” Wisely, he took a step back. Perhaps the world of events might have been different if there were more Mrs. Rudovich’s! It took Rudy about 5 minutes to finish his chore and off he went. Secretly, his wife was glad. She put her book down, got up from her chair, went over to the bookcase, and behind the third book on the middle shelf pulled out a chocolate bar. The Wednesday night meetings went on for about two months. (By the way, I could have picked any night of the week, it has nothing to do with the joke if you are trying to figure out where this is headed. I will warn you again to give up on this one, it will save you a big groan at the end.) After about two months, the communists (or Reds, if you will) decided they weren’t making much progress with Rudy. They convinced him he would best serve the party by simply growing food – they would handle the nasty end of things. They even managed to convince him it wasn’t a good idea to plant in the rain, as the seeds washed away. And to top things off, they gave him a red bandana to wear. “Remember Rudy, be a Red or be dead” Wear it for your health. Rudy was only to happy to comply. Fall came and went, followed by winter. Rudy put up a Christmas tree (well, this is a Christmas joke, I have to fit Christmas in somewhere). It was one of the few times of the year there was peace in the house. Ok already, the rest of the year his wife gave him a piece of her mind. But that’s not the punch line I have been warning you about. It is coming. Beware! Spring came at last. And it was almost like déjà vu. Threatening skies. The wife had the ladies over for bridge. There were iced cupcakes, but no silver candies on top this year. No, not because they were worried about the warning labels, but simply because Rudy’s wife was on a diet. Rudy headed out the door armed with his seed bag. And just like last year the skies opened up. Terrible rainstorm. Of course the ladies started in with some nasty remarks, remembering last year’s fiasco. Finally, to climax the snide remarks Rudy’s wife said “I told you that dolt doesn’t know what rain is” And at that moment, the door swung open, and banged against the wall. Now Rudy’s wife was sitting in the chair with her back to the door. She didn’t know Rudy was dry – he had been standing under the eves on the porch rather than being out in the garden. The other ladies were somewhat speechless, so his wife, bidding 2 hearts, added “Don’t track mud in the house” “Not muddy dear” Rudy replied. “Well don’t drip water all over the place” “Not wet dear” came the reply. “Look, Mister. Don’t get wise with me. I know you don’t have enough sense to come in out of the rain. Like I was telling my friends, you don’t even know what rain is. Just what have you got to say for yourself?” And turning, her jaw dropped as she saw her husband standing there, dry and clean. And the Rudy, waving that red bandana the communists had given him simply said “Rudolf the Red knows rain ….dear” I warned you it was bad. All kidding aside, may God bless your holidays! Much Peace in your homes!

the rules are the same as for safe harbor 401k - if there are no other contributions besides deferrals and safe harbor, the plan is not top heavy (assuming otherwise excludable option is not used)

sorry, with 15 people in the office, there are no leftovers. I barely get to sample anything I make. (I do buy some sugarplums to give away, because it wouldn't be Christmas without those 'dancing around' many years ago I was visiting my sister over Christmas, and I was given the task of hiding one gift behind the door (or where-ever) for my niece. well 'Santa' left her a note to look behind the door. but that only led to another note somewhere else, to another note, etc. my niece couldn't believe Santa would do something like that - Santa was really cool for doing that. oh plus she had left some tiny tots candy for Santa, he ate all but the green ones because he didn't like that flavor. the niece was really surprised, because those were some of her favorites.

I was hoping Garl Lesser would answer since he knows everything about SIMPLEs. technically you really aren't funding the plan - the $ are already there, so it is a bizarre situation. as for carving the roast beef...well, not from this grinch. by the way, that really is me. I have to do 'extra' stuff for the company Christmas party. while I don't do the roast beef, I have made a bunch of different cookies, plus they get 3 types of homemade bread (the best is a walnut-paste filled bread) oh, plus the chocolate covered pretzals and whatever else I decide to put together in a colorful Christmas bag.

my leanings are you can't 'allocate' the $ either, but the IRS has said you can do forfeitures - and those would be based on comp, so its a strange situation that is not written up anywhere I know of. I know transfers and rollovers dont violate things either, but I am not really sure if that would refer to this situation either. the 'release' of these dollars is not deductible, so they act like forfeitures, and maybe in one sense of the word they are 'SIMPLE' then. as for Christmas, I heard one school banned Rudolph the Red Nosed Reindeer, because it mentions "Then one foggy Christmas Eve", and that is pushing religion on someone. I say BAH!, but then I am a Grinch, so what do I know? (I was well pleased with hair this year, lovely shade of green, don't you think.

the rules say you are allowed to have a SIMPLE IRA and still allocate forfeitures to another plan. not sure of the reason for this, maybe because you are not deducting anything in regards to the forfeitures. anyway, came across an indivual who had a DB. the DB was terminated and the excess assets were rolled into a new DC plan. so of course the question becomes: can you 'allocate' the excess assets and still have the SIMPLE IRA?

A plan MUST allow you a chance to make catch-up contribution, otherwise it fails 'universal availability'. the preambe to the final regs words it as follows: "Catch-up eligible participants do not have an effective opportunity to make catch-up conttributions unless the applicable emploer plan permits each catch-up eligible participant to make sufficient elective deferrals during the year so that the participant has the opportunity to make elective deferrals up to the otherwise applicable limit PLUS the catch-up contribution." then there are examples of how a plan could operate within the guidelines. thus, if, as Mike suggest a possibilty, that the plan "doesn't allow it, you can't force them to take it" then the plan is in clear violation of universal availability. this could mean disqualification or whatever else accompanies such violation.

its the law. you have to have a distributable event such as termination, age 59 1/2 in service withdrawal, etc. once you get past the April 15 deadline. see 1.402(g)-1(e)(8)(iii) I think its because the IRS are a mean one, Mr Grinch!

yes, its time for me to be nasty again, so I am posting the puzzle again. though there are even more songs than before (its now 120) along with the song list (getting soft in my old age) of course there are more songs on the list than 120, but if you saved last years stuff then you should have 100 done already. no, I did not create the puzzle, I am just a nasty grinch who wants you to get behind on your office work. yes, that really is me.

during the ASPPA webcast the other day, the individual from the DOL recomended that all participants receive the notice the 'first' year, one of the reasons being it gives 'pre-emption' relief. after that, only provided notice to new ees or those that have default investment

correct. you must actually be eligible to be included in the test. (ees who took hardships are considered eligible) thus, as a reminder, you do not include people in the ACP test who are eligible to defer, but could not get a match because of hours or last day requirement.

lets look at it from a different point of view. lets say you have issued the notices and everything else this year and next year rolls around and you don't issue notices. does the plan cease to be a qualified auto enroll - or would you say "its too late to be auto enroll for next year?" NO. of course the IRS may frown on things to a greater degree if its the first year of the plan... in fact, (at least if the notice works the same way as for safe harbor plans) if the document has been amended (or will be amended) before the begining of the year you have such a plan. at that point in time, you have a failure to follow the terms of the document - namely issuing notices - which, at least in regards to safe harbor 401ks the IRS has said is correctable under EPCRS by issuing notices (though if the safe harbor was a match they haven't explained how to correct) as was noted in the previous comment, 30 days is deemed reasonable. I myself wouldn't push things, especially the first year of the plan.

see if 1.410(b)-7(f) helps this comes right after 1.410(b)-7(e) "Determination of plans in the testing group for average benefits percentage test"

no notice is required that I am aware of (since the plan is no longer safe harbor). the smm should be sufficient.

as ASPPA will have a webcast on Automatic Contribution Arrangements on Tuesday, and another one on QDIAs on Wed, my thought is too wait until after I sit on those before I express my 'opinion'. (or if you are a member of ASPPA sign up for the webcast and sit in on the thing)

one idea is that the notice is an extra reminder to all 'eligible' employees about the right to defer. (so then why aren't regular 401k plans required to 'remind' employees) in addition, at least with the notices I've seen, they note that if you are a member of the 'otherwise excludable' group, even though you are eligible to defer you won't receive the safe harbor. so these would be people who are 'eligible' but not 'eligible' for everything. I'd say union people fall into that same type of group. If you would provide the notice to otherwise excludables, then I'd provide the notice to union folks as well.

a leveraged ESOP had an amazing $19.90 left on a loan from the prior year. That was paid off in the current year. since less than 1/3 of that loan pmt went to the HCEs, then forfeitures (of shares) don't count against the 415 limit? (This year they also made a large cash contribution in order to pay distributions. This resulted in a big chunk of forfeitures as well, so people are bumping into the 45,000 limit.) In future years since there are no loan pmts, does that rule no longer work since there really is no '1/3 of loan pmt' left???

The Corbel documents usually say something like 'any definition that satisfies 414s can be used' (in fact, if you failed the compensation ratio test, you would have to use total comp for testing even though you used a different definition for allocation purposes.)

I agree with you. with lack of any other example, I am going to include the Return and Risk described on the Morningstar disclosure, along with the investment strategy/category description, and also the brief composition of the portfolio analysis. I only have one at the moment, a non-safe harbor, and have managed to squeeze it all into 3 pages.

the sample language for automatic enrollment ws released by the IRS yesterday, and looks like the following. (Guess I need to modify my initial attempt a little, [still, I should be able to get a form to be produced out of Relius]) now my goal is to get it to 4 pages

The song is from my collection of (miss) hits "Pension Songs in American History" I think I am up to 11 of them now. (They only get worse than Old MacDonald, especially if you are a Beatles or Elvis fan)

does anyone have a sample? I've dummied up a safe harbor notice the best I can, looking for any comments if I have missed anything, etc. the highlighted parts pertain to the auto enroll requirements (unless as I say I have missed something. ) If I wait for the govt, well it might be forever.

as you indicated, Roth contributions are treated as 'ER elective contribution' 1.410(b)-5(d) says only employee contributions are disregarded. Roths are not considered ee contributions (though for all practical purposes they sure do seem like them. must be that Roth label

include them in avg ben % test (unless by chance they would also happen to be 'catch-up' contributions)