Tom Poje

you have to follow terms of document. since he is a partner, he must receive a pro rata share provided to the group of partners. poorly designed plan. they should have a class for partner 1, and a class for partner 2. that would avoid the problem

Interesting. while an excess contribution of Roth is not includable in income, the gains attributed to that excess contribution are includable as income.

Whether it was the food or the drink No one quite knows what to think But it can be plainly seen The company dinner turned Tom green.

Fredman: I simply modified to sort on name. RCline: I did not know that the sort was on a character field. In that case, that is one of the most stupid sorts I have ever seen in a report.

I don't mind sharing as long as it is understood I have tried this on one plan, and only one plan, though I can't see how the calculation logic would change. On the report I have included the number of NHCEs, number of HCEs, total testable ees, NHCE concentration % and midpoint. report should check to see if an HCE ratio % > midpoint, if not then it multiplies the midpoint by the HCE ratio % * total # of NHCE. then it subtracts the # of NHCEs benefiting to produce the number of additional NHCEs needed. (well, I add .5 and then round) by the way, I doubt this will run from custom, so it would 'replace' the existing Relius report. this is the landscape version. you would probably want to rename the actual Relius report just so you dont lose it if this report doesn't work.

this is my first looksee at 10... Nondiscrimination report: Overall Report The sort is by RateGrpID, which appears to assign a number to each HCE alphabetically. however, when my report prints, it sorts in the following manner 1 10 11 12 13 2 3 4 5 etc. Thus people at the end of the alphabet get sandwhiched between the other employees. I imagine there is someway to set something in Crystal to make this work, but since I don't know how.... fortunatelly the report is in Crystal so easy to modify. In fact I was able to add an item that will tell how many additional NHCEs are needed if the nondiscrim classification test fails on an individual. well heck, an idiot like me finds that useful.

actually Holiday is simply from Holy-day, so you would have to change that as well. so maybe A Politically Correct Season's Greetings Poem what a bunch of nonsense. What would Bing Crosby sing about? I'm dreaming of a White ??????????????????? (and I heard that song played on Public Radio. How dare they!) again, what a bunch of nonsense.

that sounds like a gold star

remember, there is no requirement to test on an accrual basis. you can test on an allocation basis. thus if the only contribution is a SHNEC you would easily pass ratio % test. this is one of those areas people forget about. in fact, consider a non cross tested plan that is integrated at 100% TWB and 5.7% in excess. The regs say you dont have to test it because it is a safe harbor formula. what would happen if you tested using allocation method and imputing disparity? everyone would have the same e-bar! Thus the fact the regs say you get a free pass is rather moot.

in particular, for vesting see Labor Reg 2530.203-2 - you must use 12 month period to measure vesting

EGTRRA put an end to multiple use, so maybe you are only a 'rookie' in the business. but here is an example HCE 4 4 NHCE 2 2 so adp and acp both pass the '2' test. however, multiple use said that this was forbidden. only one test could use the '2' test. thus the multiple use kicks in. we are all grateful it went away.

This report will print a list of plans on the system including plan type, vesting schedule, EIN number. Open report in Crystal. choose Report/ Select Expert and delete whatever is in there (otherwise you will get nothing) This report does not print out of Relius. Use print Preview in Crystal only. This report will only print the most recent valuation year (though you could modify that item) ah, still at 9.1 but looks like this week the slowpokes finally migrate to 10

my suspicions would be you have a 'failure to follow the terms of the document'. thus, plan is still safe harbor. following similar guidelines under self correction I would guess you would put in the match with additional earnings. I've never seen the issue addressed in which you would issue a new notice to amend the plan from payroll to ytd or whatever, so I would guess that would be frowned upon. all of the above is only my best guestimate based on anything else I have heard/read/etc

the example that was in the regs is as follows HCE 10 10 NHCE 10 6 note in this case, the ACP actually failed a shift is a 'paper move' thus 2 was moved from NHCE ADP to ACP HCE 10 10 NHCE 8 8 now plan passes no refund. by the way you could also do the following HCE 0 20 NHCE 0 16 which would also pass Either ERISA Outline Book or Coverage and Nondiscrimination Answer Book have info on this topic. I would be surprised if 401k Answer Book didnt have any info on this. old regs it was 1.401(m)-1(d) example 3(iii), 3(iv) new regs 1.401(m)-2(a)(6)(2)

oh, and there is certainly nothing I know of to prevent you from testing otherwise excludables separately. looking at the situation, I would expect if you were to 'fail BRF' you would fail ACP test, which implies possible poor plan design.

unfortunately Q and A's take awhile. on the other hand, there is a good chance I will be working on such committee for ASPPA soon, so we will see how things go. (As if I don't have enough on my table!)

at the 1999 ASPPA Annual Conference the IRS response was that they did not see this eligibility provision as a discriminatory amendment. it needs to be rememebred that such comments are unofficial postions. (This particular question is referenced in Q 6:14.1 of the Coverage and Nondiscrimination Answer Book Supplement - though for better or worse the actual Q and A sort of got combined into the answer.) Ugh, don't remind me, I have to work on the Supplement for next year, but I can make this one a little clearer. I would point out that the particular question was in reference to a Standardized plan, and did not address the issue of a new company, simply a new plan. however the IRS response seemed broad enough to apply to all plans. personally, I have a problem in a scenario if owners are let in immediately, and the rank and file who were hired on day 2 have to wait a year. that smells bad.

ah, an example of the difference between 'current availability' and 'effective availability'. yoor observation is correct, everyone can defer up to 6% if they want. but effectively how many NHCE can afford to do that? it becomes a fact and circumstances test. I'd be really concerned if none of the NHCEs defer more tan 4%, but there are no hard and fast rules. how much does the govt like formulas like this? well, take a look at safe harbor 401k formulas. the match % can not increase as the rate of deferrals increase.

I vote Yes, it does not look like he ever had a break in service.

I think everyone (or at least most) would agree based on the facts you have put forward a standardized plan 'could' fail a(4) which would seem contrary to the ideas behind a standardized plan. This may be an indirect result of how safe harbor plans operate (and the fact they are fairly recent on the scene) If a standardized plan is also a safe harbor 401k then the eligibility conditions for the safe harbor nonelective are 'none'. given the fact the plan is standardized, it would seem to me that it 'should' be impossible to put further restrictions on any additional nonelective contributions. that would seem inconsitent with the idea of 'standardized'. but that is only an opinion. (e.g. if I recall, a standardized plan must test ADP and ACP on the same basis, where a nonstandardized could test ADP on prior year and ACP on current year, so maybe something similar holds for a plan with a SHNEC - you cant have different eligibility for a SHNEC and any other nonelective contributions) on the other hand, the IRS has informally stated a standardized plan with immediate eligibility for anyone hired on such and such a date, and everyone hired after that date has a one year wait will not fail because the plan is 'standardized' so maybe they would use the same logic. given that fact, they may also conclude the same in the case of a safe harbor standardized plan. Interesting question, I'll write someting up for a Q and A and submit it.

see 1.401(a)-4 Q-6 ...for rules applicable to plan years beginning after 1/1/94 see 1.401(a)(4)-1 through 1.401(a)(4)-13. so 1994 was when thenondiscrim rules were 'official' for the latest batch of plans.

my guesses 1. existance of 403b shouldn't matter. it would if you were talking about a SIMPLE. ERISA Outline Book also says an HCE may participate in more than 401k without effecting ADP Safe harbor, though ACP could be a problem. 11.527 2005 edition 2. since you can add a safe harbor feature to an existing profit sharing plan, there should be no problem having an effective date of 1/1 and 'adding' the safe harbor as of 7/1

I think (emphasis on think) the only restrictions would be: max outstanding balance of all loans = 50,000 and number of loans limited to loan provisions - e.g. does plan even allow for mre than one loan.

would agree with Archimage, plan does not fail coverage. it was indicated that all ees in some way shape or form have received a nonelective contribution. but there appears to be 2 'classes'. some received a shnec and others received a different %. this it is nondiscrim that needs to be tested. now, depending on how much the HCE received you may have to worry about the gateway minimum if the desire is to cross test to pass testing. of course, if the document requires the gateway, then no corrective amendment is needed as you have to put it in. if we are talking about 9 1/2 months after plan year end that is a very good thing. my feeling is that no, you could not 'exclude' this person from component testing, again, I would view this as a situation with two different eligibility conditions to obtain a nonelective contribution and you would have to go with the least stringent. (but then again I could be wrong) I don't really see the situation you describe that much different than if the plan had no SHNEC and the person you described was there on the last day. He still only received 3% vs whatever else the other people received, and therefore you must nondiscrim in some way.

my guess is that you have a situation which would be similar to having 2 plans - one with last day/ 500 hours for nonelective and another for the SHNEC without conditions. if you have 2 plans you have to test using the plan with the least restrictive conditions.