Tom Poje

a guy can't take a few days 'off' (HA!) without Andy throwing his name into the mix. that is my understanding of the rules. you would still include the 'distributed' deferrals for purposes of the avg benefit % test. they were included in the ADP nondiscrim test, so they would be included in the avg ben % nondiscrim test. the exception would be if they were treated as a 'catch-up', but since you indicated there was a distribution, that would not be the case.

I suspect that would be a problem, probably under the argument of 'rate of match' will or could change on someone. the reason for the safe harbor notice being provided 'timely' was that someone would make up their mind at the satrt of the year how to defer. now you are giving a chance for an HCE who didn't defer for the first few months to be rewarded for starting deferrals at this late date. (I'm not saying the change actually effects HCEs, but since it could you know darn well the IRS would give thumbs down) there is probably no reason you couldn't make deposit on a regular basis even if the match is on an 'annual basis' - e.g. that a true up would be provided at the end of the year, if needed. in fact, as I recall, this was the original way things were done and the IRS later added the option of allocating match on a payroll basis.

I can not tell from the data provided, however there may be even bigger problems. (besides the issue of late deferrals being treated as 'loans' and all the stuff with filing the 5330 and stuff) for example, if deferrals were taken out in 2005 and never deposited until 2007, then they would be treated as nonelective contributions and not used in the ADP test. if they involve HCE deferrals then you have to worry about discrimination testing on the a(4) side rather than ADP tesing.

if I understand your question correctly and the document does not specify who or how to allocate a QNEC then the formula would fail 'definitely determinable' requirement. that sounds like a more serious problem.

the IRS has given a nod of approval to some chnages (such as adding a Roth feature) as long as a supplemental notice was issued. I don't recall exactly what the Rev Ruling or Proc was or how the exact wording was. I would suspect such a change as you indicated would be possible - in fact I am not even sure you would have to issue anything (other than an SMM) as the change has no effect on the safe harbor.

Carol: I cheated. I use a spreadsheet, and know that the CPI numbers are updated on Wed the middle of the month. I've posted the sheet before, but here it is again. (of course there might be an error somewhere on it, but it seems to be working) you can actually plug in the CPI numbers on a monthly basis and get an early idea on what next years limits will be. note: came close to hitting 47,000 for the 415 limit. maybe next year we will go from 46,000 to 48,000. also, last year the deferral limit just barely went up (unrounded was 15,501) so it had quite a way to go before it would hit 16,000. good grief. Kingmaster Dave changed the website again, but it says the file is attached.

it took me awhile to track this down, and hopefully someone can translate how this works. the $100 issue is an exemption found here: http://www.dol.gov/ebsa/regs/fedreg/notices/2006003675.pdf this would seem to say if it is less than $100, you dont have to file 5330, but rather you pay the $100 to the trust. my question focuses more on the how or when the 180 day rule applies, that is, is this option only available if the payment corrections are less than 180 days late - or if it is after 180 days that you have to file through VFCP (still avoiding the 5330). and then of course under the VFCP program it even says there is no requirement to file for small amounts, but that the filing gives you the relief available under the program.

note in regards to dates: one of the options when importing dates is to set the import 'replace existing dates with input'. I believe the default is not to replace an existing date, so if a date has been changed it would normally not be replaced, as far as I know.

note: if plan is top heavy it has to be total comp regardless of date of entry

for starters: if you get the info in an excel spreadsheet, one employee per row, you can do just about any type of download. as an alternative, youcould use the DCM feature (for those that dont have excel). this features creates (for lack of a better term) a mini excel spreadsheet that can be filled in at the client end. I haven't used that in years, we pretty much do everything with excel downloads. (If it is a seperate module, I am assuming you are licensed for downloads)

they just released the CPI value for Sept, so I calculate the limits as follows: catch up - 5,288 round to 5,000 no change deferral 15,866 round to 15,500 no change (last year was 15,501 so just got the increase last year) comp limit 234,280 round to 230,000 415 DC limit 46,856 round to 46,000 DB limit 187,424 round to 185,000 key ee 152,282 round to 150,000 HCE 105,856 round to 105,000 twb is calculated differentely, but I expect that to be 102,300 and now, just released (I was off a little): nope, must have just missed. the wage base will be 102,000.

and now, the good news from the DOL - this is from the DOL's website. at least they have backed off on non participant direction plans. "...in view of the foregoing, and pending the issuance of further guidance, the Department is providing the following additional guidance. Plan administrators of individual account plans that do not provide for participant direction of investments will be treated as acting in good faith compliance with a reasonable interpretation of section 105(a)(1)(A)(ii) of ERISA when statements are furnished to participants and beneficiaries on or before the date on which the Form 5500 Annual Return/Report is filed by the plan (but in no event later than the date, including extensions, on which the Annual Return/Report is required to be filed by the plan) for the plan year to which the statement relates. This guidance supersedes the guidance provided in FAB 2006-03 as it relates to the dates for furnishing pension benefit statements to participants and beneficiaries of individual account plans that do not permit participants and beneficiaries to direct the investment of assets in their individual accounts."

yes, that is correct.

yes. the nearest I can find to anything is in the code 402(e)(3) which says deferrals 'contributions made by an employer on behalf of an employee...' and 'not treated as contributions made to the trust by employees..."

the cite you quote is for an existing safe harbor plan (otherwise, given the fact a safe harbor has to be 12 months long you could never amend/change a plan year on n existing safe harbor) you can always covert an existing profit sharing to a safe harbor as long as the first year is at least 3 months long, so you should have been able to put one in place by 10/1. you could not convert an existing 401(k) plan to a safe harbor plan mid year.

employee contributions are after tax contributions (not to be confused with employee contributions which are deferrals which in the eyes of the government aren't really employee contributions but rather employer contributions.)

I would recomend putting match made during the year into a holding account and then actually allocating it after the end of the year. you have a real mess figuring out what gains to attribute to such match. you also have a problem with showing $ in someones account that they might not even be entitled to.

Austin, what I saw on the original post was a note 'is there any guidance', and I simply pointed out what the IRS guidance was under EPCRS. whether a document can actually have the language described is another matter. I have one document that says (for all practical purposes) the safe harbor is driven by the notice - but we know that is simply not true. so, a document may have an approval letter, but even that doesn't mean the IRS might have missed something.

looks like you don't have to fill in a (useless) schedule D

try 1.401(a)(4)-2(b)(2)(ii) which references 1.401(l)-2

of course that is correct. on the other hand, where under EPCRS does it say 'simply return the $ because the person wasn't suppose to be in the plan'. and, if I recall correctly, at different ASPPA conferences the IRS personally has voiced similer opinions. now, if the plan ever got audited, would they make a big deal out of the issue? who knows. now, lets take it one step further. suppose this person had not quit, and therefore didn't receive a 'distribution.' how would you handle that, and why should that be any different.

that would be my understanding, especially since the person performed no actual service in 2006.

follow the guidelines of EPCRS (Rev Proc 2006-27) under Appendix B, section 2.02 and amend plan to make that particular person eligible. thus the person is no longer ineligible. personally I am a bit uncomfortable with a document that says you can do something with the 'ineligible' participant when (as far as I know) the IRS has frowned upon such a procdeure (otherwise why would the IRS have a recomended procdure for correcting such a failure)

to make the logic even easier: the govt looks at all the W-2s an individual has in a given year to determine if the 402(g) has been exceeded. it is that easy. you should or could do the same. thus an ee could defer 15,000 in Dec 2006 and 15,500 in Jan 2007 - a total of 30,500 for a non calendar plan year and still be okay for the 402g limit (assuming no other deferrals were made - to this plan OR any other plans with any other employers [except for possible catch-ups)

Yankees Payroll, of course. year payroll 2007 189,639,045 2006 194,663,079 2005 208,306,817 2004 184,193,950 2003 152,749,815 2002 125,928,583 2001 112,287,143 total 1,167,768,432 number of world series bought in the 21st century: 0 number of Yankees living on past laurels: too many PRICLE$$