Tom Poje

yes, but you do get the free ride on avg ben % test.

I think there are a couple of things that could explain. one is that the db questions were tossed into their own session. this means the handout for the big session did not include any of those questions and answers that would have been included in the past. This is something new that is being tried, I think there are a few bugs to iron out in this area - e.g. how much time should the session in front of everyone. secondly, I included everything that came in. last year there actually was a 'second set' of questions that weren't answered either. some people got those, some didn't so the amount of unanswered questions was probably about the same. lastly, the meeting with the IRS officials the month before was cut a little short due to some unforseen meetings that came up that day. believe me, seeing how the whole process works gives me even more admiration for the IRS officials involved.

now that is real cute. too bad ASPPA doesn't run something during the season. that would be cool. ugh. don't get me started on Christmas. last year I showed up dressed as the Grinch. that sure was a shock to people. every year I go through a panic, what if they ask me to talk again, cuz then I feel 'obligated' to 'discover' a lost pension song. that ain't easy. Oddly enough, once I decided that Cats in a Cradle had possible potential the verses sort of just matched the actual song and that was real easy.

simply a note to bring this message to the first page. this is the report I mentioned at the ASPPA conference (if there are any questions or you need help in further modifying the report, ask and maybe I can give a tip or two)

some lively discussion on the Q and As in regards to 'otherwise excludables'. we still have no clear guidance on this one, but there was sort of a promise that something would get done in this area. in the past the informal guidance was that you could use maximum exclusion and not worry about the plan's entry dates. this time there was insistence from the IRS that the plan's entry dates had to be considered. probably the more important issue was whether one could be penalized retroactively for following a procedure that was imformally given an ok. I'm sure we will see more on this one. ........ had a chance to actually meet and talk (if only for a few minutes) Sal 'Mr. ERISA Outline Book' personally. from time to time I have tripped across a few typos in his book. because of the nature of these typos, the e-mails have been rather interesting - one involved the knights of Ne (or however that is spelled) from Monty Python, and another I had signed the correction from Jethro Bodine and he responded with a thanks from Jed Clampett. ...... It was especially meaningful to me to sit and talk to someone who found one of the custom Relius reports I posted on Benefits Link as being very useful- maybe not in the format I had, but as something they could easily modify for their purposes. one never knows if it is worth the hassle of posting such things. ...... the talk went well, but I almost gagged for a portion of it due to a tickle in the throat. ugh. as for the 'pension' song, well, of course on has to remember humor is individuallistic. it seemed to go well. always great to hear some chuckles during parts of the song. Cats in the Cradle not by Harry Chapin. The plan arrived just the other day The company added a 401(k) They put in a match, and what can I say I deferred in the usual way The cash was growin’ ‘fore I knew it, as I put away I’d say, “I’ll have a lot some day, yeah You know I’ll have a lot some day.” refrain: And the cat’s in the cradle and the silver spoon, Little boy blue and the man in the moon. “When will I retire?, well I don’t know when, But I’ll have a good time then You know I’ll have a good time then. The plan turned 10, just the other day I said “Thanks for it all, I’m doing okay” I invested low, now its high today I’m glad I deferred 10% of pay As I saved away, my wife her smile never dimmed Said she “I admire him, yeah, You know I admire him.” Refrain The plan was tested just the other day It failed ADP in a big time way They put in a QNEC once in a while Good news for me I said with a smile The deferrals were too high for the HCEs See you later, can I thank them please? Refrain I retired just the other day I was sick of work and the rate of pay But I said “The 401(k) was such a good find The money is there and it grew over time” Well the job it was a hassle, but now I’m free I recommend you save like me Recommend you save like me. Refrain

when EGTRRA went into effect, match vesting had to switch to 2/20. The IRS made it clear that you could keep the old $ under the old vesting schedule, and apply the new schedule to new $ only. However, once someone has 3 years of service that person gets to choose between the old schedule and the new vesting schedule, so at that point in time you are only talking about a group of employees who have worked less than 3 years. that has always been the rule since I have been doing things. see 411(a)(10)(B) of the Code also see ERISA 203 for a discussion on vesting.

never heard of anything that limits how much you can limit a tiered match to. what you might be thinking of is for the minimum allocation gateway, if you have several tiers the ratio of one band to the immediately preceding band (if not greater than other previous bands) avoids having to provide the gateway 5% or 1/3 of the HCE. examples in the regs are found in 1.401(a)(4)-8(b)(1)(viii). but that is nonelective contributions only, not match. standardized plans are 'gauranteed' of always passing all testing. that is why you can't have a tiered formula in them.

look at 1.401(a)(4)-4(b)(1) for current availability if plan satisfies 410(b) WITHOUT REGARDS TO THE AVERAGE BENEFITS PERCENTAGE TEST of 1.410(b)-5. one of the ways to pass 410(b) is accomplished by using the average benefits test. thus you can use the nondiscrim classification test without having to worry about the avg ben % portion of te test.

I did a google search and found the following comment on the movie I saw XXXXXXXXXX for $2.50 on the big screen (cheaper than renting it on video), and on that day I was desiring nothing more than a dumb action flick that would entertain me for about 100 minutes. That's what I got, so I was satisfied. Still, under different circumstances (higher admission price, wanting something more out of a movie on the day of seeing it, etc.) I probably wouldn't have liked it. The characters were really thin - you hardly learned a thing about them, and they were pretty much interchangable. The dialogue was weak and cliched. The sharks - supposedly intelligent - didn't get much of a chance to show their supposed intelligence. The sets were okay, but still had a look to them that suggested that extra money could have polished them up. The characters commit some really stupid actions along the way. Wait until you are in the right frame of mind, and it's free or at a low price. Chances are then you'll be acceptably entertained.

ok, I'll attach the spreadsheet again. I had put this out here a couple of weeks ago, but what the heck this should work every year (or at least until they change things again) that way you can get an idea what next year will be before thenumbers are actually released

this report will generate a list of the plans on the system (only the most recent year shows) it also pulls a vesting schedule name(e.g. 3/20). I suppose since plans will have to go to a new vesting a 2/20 (or better) in 2007 it could make it easier to spot those plans. Of course, this only works if you have a legitimate name for the vesting schedule. this report only works in crystal. in other words open in crystal and print preview.

2006 COLA 3.3 2005 avg wage index 36,952.94 2007 Bend 1 680 2007 Bend 2 4100 Taxable Wage Base 2007 97,500 if for whatever reason you are missing values for prior years, the table can be found at the govt web site http://www.ssa.gov/OACT/COLA/autoAdj.html

looks like taxable wage base has just been released http://www.ssa.gov/OACT/COLA/autoAdj.html

they just released the CPI-U value for Sept. based on cpi-u numbers, I have deferral limit at 15,501. since this increases in units of 500, that would put the deferral limit at 15,500. on the other hand, my spreadsheet doesn't round in its calculations, so it could very well be it will be under that - it is so close. other limits based on the numbers DC annual addition 45,000 DB 180,000 comp limit 225,000 key ee 145,000 hce 100,000 guess now its a wait and see how close the spreadsheet actually came. I feel pretty confident about those numbers taxable wage base is based on a different set of numbers than the CPI-U values.

gadzooks! I almost forgot I had one of those planned. This year's pension song will be a take off on Cat's in the Cradle by Harry Chapin. We'll see if anyone remembers that.

hope to see at least a few faces at the Conference next week

per a request. here is a crystal report that hopefully will produce the safe harbor notice needed for plan years beginning 2007. (will print vesting and distribution info) This was converted to 11.0. the 10.2 version is posted on the relius board. first I should say I don't have any convoluted plans (e.g. different vesting schedules for different stuff) one can always add more items by entering data in the user fields. this report is based on a combination of Corbel's example and (if I remember correctly) Sal "The ERISA Outline Book" example of a few years ago. but maybe I am wrong there, I don't recall where I received my original example. alpha numeric User fields in plan specs: #20 deferral changes can be made (e.g. quarterly or monthly, etc) #21 is compensation definition (e.g. Total or comp less bonus, etc) #22 and #23 distribution conditions (e.g. upon termination) #25 contact person (e.g. Blunky the one eyed newt) #26, #27 and #28 vesting schedule #26 2yrs 20% 3 yrs 40% #27 4 yrs 60% 5 yrs 80% #28 6 yrs 100% #29 hours for vesting (this might only be available on version 11.0) I added this after the fact. I figured it can't hurt. As far as I can tell, I have included everything needed. If there is no match then those portions of the report can be surpressed. etc. etc.

per a request. here is a crystal report that hopefully will produce the safe harbor notice needed for plan years beginning 2007. (will print vesting and distribution info) This was written at 10.2 I will a version for 11.0 on the 401k board first I should say I don't have any convoluted plans (e.g. different vesting schedules for dufferent stuff) one can always add more items by entering data in the user fields. this report is based on a combination of Corbel's example and (if I remember correctly) Sal "The ERISA Outline Book" example of a few years ago. but maybe I am wrong there, I don't recall where I received my original example. alpha numeric User fields in plan specs: #20 deferral changes can be made (e.g. quarterly or monthly, etc) #21 is compensation definition (e.g. Total or comp less bonus, etc) #22 and #23 distribution conditions (e.g. upon termination) #25 contact person (e.g. Blunky the one eyed newt) #26, #27 and #28 vesting schedule #26 2yrs 20% 3 yrs 40% #27 4 yrs 60% 5 yrs 80% #28 6 yrs 100% #29 hours for vesting (this might only be available on version 11.0) I added this after the fact. I figured it can't hurt. As far as I can tell, I have included everything needed. If there is no match then those portions of the report can be surpressed. etc. etc.

maybe 7.409 of 2006 edition Timing of Contribution?

possible hints (I am not a movie watcher, so I have to look up the titles for an explanations. I am sure it will give the answers away #6 - based on the title, this is either on the water or under the water. #12 - it involved people getting involved with a trucker and a CB radio #16 Robert Redford

I have to give a talk at the ASPPA conference coming up shortly. This is the example I am using (I walk through a Sample Notice) V. Distribution and Vesting Provisions You generally may not withdraw your deferral contributions or the safe harbor contribution except when one of the following events occurs: severance from employment with the Employer, death, disability or attainment of age 59½. You are always 100% vested in your deferral contributions, in the 3% safe harbor contribution the Employer makes on your behalf and in the safe harbor matching contributions the Employer makes on your behalf. You may withdraw any additional contributions provided for in “Other Employer Contributions” as follows: [Describe conditions] The vesting schedule which applies to the additional contributions is: [Describe vesting schedule] This satisfies the requirements of 1.401(k)-3(d)(2)(G) - Withdrawal and vesting provision. ..... so for example, without knowing how other software works (for better or worse I am on Relius) I entered in user fields: 2 yrs - 20% 3 yrs - 40% 4 yrs - 60% 5 yrs - 80% 6 yrs - 100% or whatever the plans calls for. I then have a crystal reports that populates the fields.

1.401(k)-2 describes what may be used in the ADP test. just looking at the headers 1.401(k)-2(a)(4) Elective contributions (and definitions are found in 1.401(k)-6 - elective contributions are different than matching contributions) 1.401(k)-2(a)(5) Elective contributions not taken into account (e.g catch up contributions, shifted 1.401(k)-2(a)(6) QNECS and QMACs nowhere in the above does it say match may be used in the ADP test. nowhere does it say 'if match is 100% vested can it be used in the ADP test'. Thus you also wouldn't use the match of someone who has been there 6 years (his match is 100% vested at that point in time) again, refer to the definitions found in 1.401(k)-6. A QMAC must be 100% vested AND subject to the distribution requirements [of a deferral] when made. If the match is defined as 'an elective contribution' in the document then I would say you could use it in the ADP test - but you better not allow any type of in service withdrawals either. It sounds like it may indeed be a QMAC.

and just in case I misunderstood the gist of the original question: the proposed default investment rules state: "A fiduciary of the plan that complies with this proposed regulation will not be liable for any loss, or by reason of any breach that occurs as a result of such investments." "As part of PPA, section 404© of ERISA was amended to provide relief accorded by section 404©(1) to fiduciaries that invest participant assets in certain types of default investment alternatives in the absence of participant onvestment direction." my understanding would be if you dont follow these guidelines you simply give up the 404c. e.g. even though you have a default investment, the participant is deemed to have control over the investment.

well, beginning in 2007 vesting must follow top heavy schedule vesting (or better) this is not proposed, this is fact.

It does not appear there will be any leniancy. That was given last year. I am now a member of the Q and A committee. this issue was discussed at the meeting a few weeks ago, and the IRS individual thought initially it was an oversight, but on further research found this was an intential requirement (for better or for worse). Instead of grumbling I simply wrote a crystal report to pull the data I need from Relius. maybe I have to fill in a few user fields initially, but once done it should work year after year.