Tom Poje

I'd go even further to make a correction on the initial statement. A plan meets the ADP safe harbor by providing the 3% SHNEC. at that point in time the ACP is not satisfied. if no match is made, there is no ACP test, so the ACP test becomes a moot point. but the 3% SCHEC does not satisfy ACP safe harbor.

but not included in the avg ben % test 1.410(b)-5(d)(2) in regards to the ACP test, this means no one is excludable from the ACP test due to hours or last day, since everyone could make after tax contributions.

for top heavy in a dc plan, hours are not important. if you are there on the last day, you are due a top heavy. it does not matter whether you are eligible for the nonelective portion. since these ees did not work 1 year, you could invoke the otherwise excludable option and test separately. in that case, that group would not need the gateway minimum. since those ees are not in the DB I believe they are only do 3% as well. after that, unclear what is going on. you say they are getting 5% between NC and CB. I will assume by CB you mean Cash Balance. this implies a db/dc combo, so the gateway might mean more than 5%. plus you can not say an ee received 2% in the cash balance and add that to a profit sharing of 3% and say the ee received a total of 5%. you would have to convert the cash balance % into an equivalent dc %.

will this do?

since section 2.06 of Appendix B of EPCRS (Rev Proc 2006-27) explains how to correct 401(a)(17) failures, there really shouldn't be guessing on how to correct this. (If you don't hace a copy, I posted one under the 401(k) board - back on April 17)

much better. I had forgotten what you looked like.

Mystery solved Just got word from the great and powerful guru master of the web site to quote "Lemme put 'em back. I guess I got into a "housecleaning" fit and should have run these changes past the group before implementing them. I was trying to make the board easier to use and less cluttered. Probably dumb to implement changes affecting the community without consulting the community <g> Please let the poster know that avatars are back up." so I guess we can once again see such famous pictures of Blinky the 3 eyed fish and others!

guess no one reads these things (including me) but upon my further review part of one line in the description got left off to perform very well often cause another asset category, or another particular security thus the one line should read This is because market or other economic conditions that cause one category of assets, or one particular security, to perform very well often cause another asset category, or another particular security to perform poorly. so if you downloaded this report you would need to edit it for future use.

if the plan is 'top-heavy' then it is required to provide a minimum contribution (usually 3%) to all participants who are active as of the last day. otherwise, the term discretionary means exactly that, its an option.

there are questions attached to the cram session notes. I tried a search on google and among others there was http://www.asppa.org/archive/conf/2003/summer/klose-c2dc.pdf a few years old, but as I said, there are questions at the end. I see I need to have Dave update things on the board here, since there have been 3 tests for a few years now! no more picture of the Leopard?

I point you in the following direction: If participates in more than one plan of the same employer then add all deferrals from all plans. Use definition of compensation for plan being tested. [1.401(k)-2(a)(3)(ii)] page 95 if you downloaded the (final) 401k regs attachment - look back to May 3 or so posting if you didn't download them out.

correct.

ok, assuming only HCEs are excluded from match, I find it hard to beieve you could fail coverage - unless you had a last day or hours requirement and a whole heap on NHCEs did not receive a match either. the 401(a)(4) test for match is the ACP test. the excluded class of ees would not show up because you only include eligible ees on the test.

see 1.401(k)-3(h)(2). a SHNEC is not subject to the same restrictions as a QNEC that is, you do not have to perform 2 nonelctives tests. even in that case, for purposes of coverage ees qho receive QNECs only are still considered to be benefiting for coverage purposes. coverage merely asks "did so and so receive a nonelctive contribution?" it does not matter what form that nonelective is.

and now, its official. no more goofy super early normal retirement ages. anything less than 62 might be pushing it as far as qualification goes. its in the regs.

well, I guess of course one could always use VCP and see what the IRS suggests. since there are no guidelines, possibly go with a 3% QNEC - 'as if the plan was new and using the 3% assumed rate for prior year testing'. this would be twice the actual required amount required since you only need to put in 50% of the missed opportunity. my understanding of things is that you can correct under SCP follwoing whatever guidelines you can, if they don't correspond to anything the IRS might not accept them under audit.

I would agree the plans could not be merged w/o losing safe harbor status for the current year. Would also agree the match has to be made because the document says a match will be made. as for freezing plan B and letting people enter 7/1 - no clue.

I'd respond, but then you would get another e-mail notification...oh wait that is a different issue. its an LRM that applies to particular plans - I think this is for prototypes only. If I understand things correctly it would not apply to volume submiteer or individually designed. good grief, I think I am getting near my limit on attachments again.

though its getting late for quarterly notices, I am posting this simply to keep this post from going 30 days stale and disappearing off the radar blip. hope it got people by, I realize it wasn't anything super, but time didn't permit me to do much more than modify something I had on hand.

this report had been working, though I haven't used it in awhile. Posted it before and no one complained. of course the data is only as good as what has been entered on the system. e.g. If you took over a plan a plan in 2002 then it will only know about deferrals since that date (unless you entered prior deferrals. I believe you have to click on 'zero activity accounts' or however the is worded. this would pull data from accounts that might have been in funds that were closed out. lets see, I think it pulls all prior years contributions, but it does list which ones are deferrals and which ones are match, etc. so use just the deferrals - of course. plus it pulls current years contrib. as always, use at own risk, but this appears to work.

in addition, they are subject to the same distribution rules as deferrals - no in service. plus as an added kicker - no hardships.

since discretionary match exceeds 6% of deferrals, you must run ACP test. you can include all match or exclude the 4% safe harbor. see 1.401(m)-2(a)(5)(iv)

well lets use a simple example. 10 NHCEs and 1 HCE formula is 5% of pay. of the 10 NHCEs, 3 are PRNs and are excluded. as you indicated, coverage is passed because 7 of 10 NHCEs benefit. now, if you were to test on an allocation basis you magically have 7 of 10 in the rate group (because 7 of the 10 NHCEs received the same % as the HCE) which would be enough to pass nondiscrim. As long as you pass coverage AND your formula is a safe harbor formula (e.g. equal % of pay, etc) then you should pass nondiscrim as well. good thought though, you should always be concerned about both tests.

"We had a little surprise yesterday. Joseph "Tyler" Graff was born at 1 pm Sunday. He weighed in at 6 lbs, 19 inches. It was about a month before scheduled, but everyone is doing ok. Tyler is in the NICU for observation but breathing on his own. Bg Brian H. Graff, Esq. APM ASPPA Executive Director/CEO" --- Sounds like one of our own is A Super Proud PA !

I just attached the 401k regs on another thread (adp refunds and 401(g) refunds). there are clear examples on page 120 - 121 (assuming your copy would print the same as mine.) don't forget, this year you also have to include gap period income. that is described in greater detail on page 115.