Tom Poje

check out page 123 of the following. it will answer you question. yes, you can reduce excess contrib by amounts previously distributed for excess deferrals. These are the final 401k regs (plus preamble)

without digging through my notes, and relying on my memory you can only rollover Roth $ to another Roth style account, so you would never lose your tax free distribution (unless you withdrew the $ early, of course) well, of course mistakes do happen and I suppose one could accidently roll roth $ into another type of account - just make sure that doesn't happen. now, if your new plan doesn't have the Roth option, you can always roll the roth $ into a roth IRA. The new roth regs just came out a day or 2 ago. If I recall, if you roll the $ into a roth IRA it starts the 5 year clock running all over again. sorry, I don't work much with Roth $ so I don't keep up on it in great detail.

I'd be cautious, the IRS hasn't issued any guidelines. In a controlled group scenario, you can't aggregate a plan with a basic match with a plan with an enhanced match because of the issues of rate of match being different. I'm not sure how the IRS would view a situation as you described. or suppose Fred an NHCE, whose wife makes mega bucks, so he doesn't need his salary. he deferred maximum and has capped out for the year. now the plan is providing a richer match and he can't take advantage of it. that won't look good.

deferrals are treated as a catch-up if they violate one of the limits - 402(g) 415 limit or plan imposed limit. in addition, a plan that fails ADP testing can treat those amounts as catch-up. so you don't really 'make' a catch-up - if you haven't violated one of the limits, then you have no catch up. If I understand things correctly you could have a plan limit of 0% deferrals by key employees and that would get around the issue

point point http://www.ustreas.gov/press/releases/repo...22804td9169.pdf you won't find it in the regs, it is in the preamble assuming it prints the same, try page 23

this depends on what portion of the testing you are talking about. if its a 401k plan, such people could have deferred, and so they would show up in the avg ben pct test. for the nondiscrim classification test they would be excluded (assuming terminees with less then 500 hours do not benefit. This is actually an optional rule, so you could include them if you wanted to, and it would help testing if they were an HCE. If you are talking about a controlled group, the actual rule requires you to be a 'participant' so sometimes terminees with less than 500 hours are still included if you are performing the test on the plan they are not a member of.

gotta miss something once and awhile like, some baseball owners think if you 'but' the best players and have the biggest payroll then you should have the best record.

RCK - not true suppose you had plan 1 1 HCE 6% 1 NHCE 4% plan 2 1 HCE 2% 10 NHCE 1% both pass separately. now try combining them HCE will be 4% NHCE will be 1.27% (4 + 1 + 1.....)/11 combining them will fail. reason: it is not basic arithmatic because their is 'weighting' involved, depending on how many ees are involved in each group. nice try, though!

I can try and toss this one before the IRS at a Q and A session just to see what they say, but that wouldn't be until the end of July at earliest.

the Actuaries decided what APR values are. I think they make them up to suit their fancy. the figure I gave was for a monthly annuity, I suppose sometimes it might be shown as 9.615 (1/12 of 115.39) if determining things on an annual basis. maybe Mr. Preston or one of the other acuary gurus from the dark side of DB can describe.

I will assume what you mean is "How do you calculate an E-Bar" suppose a 60 year old receives a $40,000 and deposits that money in a bank at 8.5% interest. The money would grow as follows Age 61 = 40,000 * 1.085 = 43,400 Age 62 = 43,400 * 1.085 = 47,089 Age 63 = 47,089 * 1.085 = 51,091 Age 64 = 51,092 * 1.085 = 55,434 Age 65 = 55,434 * 1.085 = 60,146 So at retirement she will have a little over $60,000 Mathematically speaking, this could be written as 40,000 * (1.085^5) or contribution * 1.oI ^ (yrs to retirement) where I = interest between 7.5 and 8.5 in this example she had 5 years to retirement. instead of taking a lump sum at age 65, she gets an annuity. the APR fo 1983 IAF at 8.5% is 115.39 so 60,146 / 115.39 = 521.24 this would be her monthly benefit for the rest of her life. or put another way 521.24 * 12 = 6254.88 a year. if she made 200,000 then what % of pay is that? simply 6254.88 / 200,000 or 3.127 that is her E-BAR.

print out the following, which is rev proc 2006-27 EPCRS appendix B is what you wany, should be about page 63 or so you should have a copy of this for other corrections for other plans that might be needed some day.

remember, that is simply how they answered the Q and A. might not reflect an actual position of the Treasury, but at least it is a guideline.

dug back through my notes from last years ASPPA conference what the IRS had said was that a QNEC can not serve double duty (help ADP test and gateway) - only in a safe harbor 401k would that be possible.

interesting - the 'correction methods' under the old regs 1.415-6(b)(6) have been eliminated. (these included the return of deferrals for 415 violations.) however, the news regs say you can use the old rules pending further guidance, but only if you qualify under the EPCRS program. and those comments are only found in the preamble not in the actual regs, so when you get a new copy of the regs and throw out your old one, hhmmmm. lets see, you might not have the preamble, and if the old regs aren't included somewhere in your new copy, you won't even have that. gotta love it! oh, the further guidance depends on comments received via EPCRS (Rev Proc 2006-27, section 2)

no one can predict the future. the most common argument I have seen for choosing a Roth 401(k) (what you call 401a) would be if you expect to be in a higher income tax bracket at retirement, then the Roth is better. or also, from the calculators I have seen, if you are under age 50, most would seem to say the Roth is better simply because the money has a chance to grow, so the tax savings are a lot better - and it doesn't really matter what tax bracket you end up in. I have seen arguments on the 401k side that say that is a better deal. But from what I have seen from these this would only be true if you also invested the $ that weren't taxed. e.g. take $1000. in a 401k you defer 850 and get a tax break of 150. A Roth would cost 1000 because you have to pay taxes up front. Now, if you take that 150 and also invest it somewhere else then the 401k turns out to be a better deal. but I am sure others can explain all that stuff better than I can -again, I have heard arguments from both sides.

google Publication 560 and print that - (for 2006 returns) . definition of HCE with example is on page 4. This one is a lot clearer than what was printed in the past for this particular issue. It's a pretty good publication to have on hand for other things as well. aw nuts, here it is

by the way, if you are not aware of it, if you select utilities / user defined field labels / plan labels you can enter a description of the user fields e.g. 31 vesting % 1 yr this should globally effect all plans and therefore when you go to enter the data, you wont have to 'remember' what fields to enter. I modified the vesting % at my end to have the first line read if {PLANEE.NRDATE}<={RPTPLAN.RPTTODATE} then '100%' else that way if someone is at NRD the vesting will show as 100% (despite years of service) if NRD is before the reporting date

perhaps you would want to read from the following cite: (I knew a quick search of 'unreasonable retirement age would turn up something!) http://209.85.165.104/search?q=cache:ue9qH...;cd=5&gl=us In DeMarco v. DeMarco, 787 A.2d 1072 (Pa. Super. 2001), the employee was 51 at time of trial and the normal retirement age for the man's profession was age 50. The husband is a police officer with the City of Pittsburgh. The valuator used age 50 as the retirement age. This made no sense, since the employee had not retired at age 50. The Superior Court found that use of retirement age 50 was unreasonable: "The trial court concedes its selection of age fifty was an arbitrary age chosen to maximize the value of this asset," the court wrote. Age 51 would be a reasonable retirement age in a pension valuation, under the theory of market worth. However, husband argued that the pension should be valued using the average retirement age, which he claimed to be 65. The Superior Court accepted this argument, and found that the retirement age to be used in valuing the pension should be based on the average age of retirement, as well as other related factors. This is also a method indicated in the Actuarial Standard of Practice (3.3.3.d). Thus, when the employee is beyond the normal retirement age and the retirement age is in dispute, DeMarco indicates the use of "statistical data regarding average age of retirement from the company or industry with which the employee/spouse is affiliated." Mark K. Altschuler is an actuary and president of Pension Analysis Consultants, Inc. in Elkins Park. He is a contributing author to Valuing Specific Assets in Divorce, edited by Robert D. Feder, which covers issues in choice of retirement age and actuarial standards. He has spoken on the topic of age and service retirement before the Pennsylvania Bar Association. Notes at the bottom of the page say: Published with permission from Pennsylvania Law Weekly

I think (if I remember correctly) at the ASPPA conference last year it was indicated you don't say "Did everyone reason the gateway, ...yes...ok so now I test with and withou the QNEC" but rather I can only run my test without QNECs if those remaining contributions are enough to pass the gateway and I can only run my test with QNECs if all those contributions are enough to pass gateway.

the reg cites are : [1.401(k)-1(a)(6), 1.401(k)-2(a)(4)(ii)] remember, deferrals are included in the test if made no later 12 months after plan year end - of course as long as it relates to services and comp for that particular plan year. compensation is treated as received on the last day of the partners or sole proprietors tax year. so it is my understanding that you have up until that point to deposit the deferral. the regs clearly say that an elective contribution made by such individuals are treated as alocated to their account for the plan year that includes the last day of the indiviudlas taxable year. in the preamble to the final regs, somewhat of the reverse of the question was asked if comp really isn't treated as received (that is 'currently available') until the last day of the tax year, then how is it possible for the individual to defer during the year, since no comp was in fact currently available. the IRS made it clear that timing of contribution would not prevent a partner from deferring - but one did have to make sure there was sufficient income to make sure there was no 415 violation.

possible export yrs svc for vesting in the DER and then set up a column in excel to convert those years to vesting % depending on the source.

so much for the idea that it can't be done. good job!

interesting. and I see you can also set height and width. like you, never tried using that before. thanks for pointing that out.

so Austin, curious mind wants to know, did the report even close to what you wanted?