Tom Poje

while I haven't heard anyone doing what you propose, it sounds to me (because you are allocatiing the match on a payroll basis rather than end of year) like you are 'reducing or discontinuing the match' (even if it is discretionary - it sounds like it was 'announced in some way shape or form that for the current year it would be x %')'thus I would hold you fould have to follow the rules specified in the regs. This obviously prevents the owner from getting a big match in week 1 and then discontinuing the so called 'artificial' discretionary match.

PPA says: section 414 is amended by adding the following (simply brief bullets pertaining to your question, not obviously the whole issue of automatic enrollment): (w)Special Rules For Certain Withdrawals... (1)(A)the amount of ANY such withdrawal.... (emphasis mine - it says ANY, so it looks like you could have actually changed investment choices) (2)(B) timing for maing election ....made no later than the date which is 90 days after the date of the first elective contribution (2)©....equal to the amount of elective contributions made with respect to the first PAYROLL PERIOD... (again, emphasis mine) [of course later it adds issues such as gains/losses, etc] I don't see anything implied in that statement as to 'when the $ are deposited in the trust'.

I would word it as follows: If the match is used to satisfy ADP safe harbor, it must be 100% vested (because anything used in the ADP test - safe harbor or otherwise is 100% vested) this match can not be discretionary. if the match is used to satisfy ACP safe harbor it could be discretionary and subject to a vesting schedule. it can't be greater than 6% deferred or more than 4% of comp. e.g. a match of 66.66% up to 6% deferred = 4% of conp (66.66% * 6% = 4%) (plus you could include match used to satisfy ADP safe harbor (provided the enhanced match was not greater than on amount greater than 6% deferred.)

if I remember correctly, PPA changed the year things were taxed. for plan years beginning 1/1/08 distributions will be taxed in the actual year of distribution rather than the goofy 2 1/2 month rule where they are taxed in the prior year, so your statement sounds right on the money.

my understanding is that for nonelective contributions you have one nondiscrim test. (though you could have this broken out between statutory includables and otherwise excludables, so you could in effect have 2 tests) so regardless of that, you have to include everybody who has one year of service, despite the fact that for most of the nonelective you have a 2 year wait. this would also mean the people receiving the safe harbor would also have to get bumbed up the gateway I suppose another way of looking at it would be as follows pretend you have 2 plans plan 1. two year wait with profit sharing plan 2. one year wait with safe harbor you have to aggregate the plans, so you have to use the minimal eligibility requirements between the plans, which is 1 year. the 'otherwise excludable' rule only applies to ees with less than 1 year of service.

on the other hand, if you have some NHCEs who receive no contribution because they are excluded for whatever reason and other co-workers who receive a contribution, then you may have problems within the ranks, 'good' workers who quit, etc. for coverage purposes see 1.410(b)-2(b)(6) "plans benefitting no HCEs"

variations of this question keep coming up, so: a safe harbor plan is top-heavy free only if there are no other additional contributions (something besides the deferrals, and SHNEC and/or SHMAC) now, can SHMACs and SHNECs be used to satisfy top heavy? yes. if someone receives a SHNEC, then they have received a type of nonelective - therefore, they would get need to get bumped up to whatever gateway minimu you have. if you go with SHMACs, then you will have to provide top-heavy to those that dont defer, so most people go with the SHNEC

ha. I needed the good chuckle. hearing my name and 'expert' used in the same sentence. QNECs up to 5% to specific individuals can be used (as long as the document provides the definitiely determinable formula so you can actually do that). all the rest of the tricky stuff under targeted QNECs merely provides the 'chance' to possibly use a QNEC greater than 5% in testing. as I noted, the document is going to be the fun part. for example, suppose you write language to provide a 5% QNEC starting with the lowest paid NHCE (terminated or otherwise) Bob, was fired for stealing and drinking on the job. ooooops. He also made a pass at the boss's daughter. he was the lowest paid employee. hmmmmmmmmmmm. he now gets a 5% QNEC. that will go over real well.

in response to your question these are your choices: 1. follow the terms of the document. 2. see number 1 above. 3. read no further. go to number 1. now, if your question is to whether or not you can write a document as such, I would suspect it is probably possible to do so in an individually designed document

as to fair or unfair, or who gets hurt the most, I'd say that is in the eyes of the tester. 200,000 15,000 7.5% 100,000 10,000 10% lets say the refund is $1000. now, the HCE with the highest deferral % caused the plan to fail. In the old days of leveling by % he would have gotten the refund. now its the other way around, the guy making the most money will get the refund and, in this small example the guy who deferred the most .

yes, for testing purposes use the latest of retirement ages if it is not uniform.

it is not entirely clear if you can convert a SIMPLE 401k during the year. certainly can'tt be done if you have a plan that used IRS model language. The ERISA outline book even suggests it might be possible (see 11.435) but there is no clear guidance. given that fact, I'm not sure I would want to switch.

in regards to the direction you worded your question, the answer is 'something else'. 1. eliminate any deferrals that could be treated as catch-up (deferrals that exceed the (e.g. $15,000 limit or plam impposed limit. 2. perform your test. 3. determine amount of refund (at this point it would be based on % deferred) 4. determine who gets the refund -at this point it is based on who deferred the most, not who had the most comp or who had the largest % deferred. (leveling down to next highest deferred amount, etc, etc. 5. if this refund is available to someone who is catch up available, those amounts would be treated as catch-ups. of course the plan might not even allow for catch ups, so refunds might be even greater.

ah, an ehnhanced match. its better than the basic match. so it satisfies ADP safe harbor. It is limited to 6% deferred, so it satisfies ACP sahe harbor. go to the head of the class.

if you are asking can you alocate 3% shnec to all and an additional 6% to the owners (giving them a total of 9%), yes, that would satisfy the gatewat minimum (1/3 of 9% = 3%) this gives you the right to cross-test, but does not mean you pass nondiscrimination. as for top-heavy, there is no free ride once additional contributions are made, so you would have to test for that as well. since 3% is being provided that shouldn't be a problem, unless the SCHEC was given from date of entry.

as far as I know you could amend, the one exception is that sometimes the document is the situation you described will also provide for an allocation for died/disabled/retired regardless of last day, and someone might have actually 'earned' a contribution at this point in time

I am excluding car dealers and lawyers, of course.

including the cat above, but then you can get reincarnated again. (hmmm. I must be an omeba in disguise, cuz the humor I generate is at tle lowest form of life.)

so are you allowed to apply mortality tables to people who are reincarnated - and if so which one?

that would be my understanding as well - the earnings are subject to taxation (so I would assume withhoding) - and also the earnings are subject to 10% early withdrawal if applicable.

per my notes from the Western Benefits Conference topic that I sat through (due to PPA) Hybrid plans are not age-discriminatory if: a participants accrued benefit determined under the terms of the plan would be equal to the accrued benefit of any SIMILARLY SITUATED younger individual (in every respect): * period of service * compensation * position * Date of Hire * Work History * other relevant factore (but no one knows how to apply that) thus the speaker cautioned against using names since 'names' was not on the list.

everything I have ever read said yes, testing age is age 65. as indicated in another post, if the DB plan was a cash balance (and the DB had the younger retirement age) there may be some other issues involved.

well, ok, here is an attempt to pull/sort whatever age 55 and 10 years participation for purposes of diversification this report adds 10 years to date of entry adds 55 to date of birth then takes the later of the 2. I suppose if someone doesn't complete a year of participation, then of course 10 years of participation will be wrong, so in fairness years of participation are printed. If ee terminated with less than 10 years of participation it will indicate ee not eligible to diversify. and there is a note to indicate which year of diversification ee supposedly is in (it will be negative if ee has not reached year of diversification.) what the heck. its a free report, use at own risk

no

I'm not aware of any rule that does not permit deferrals after age 70 1/2, except for IRAs - and that pertains to all individuals.