Tom Poje

the self correction program you cite has been updated 2 times, the most recent is Rev Proc 2003-44. while I dont think anything has changed in regards to your particular question, it is always best to use the most recent guidelines. now, if I understand your question correctly, ee has deferred 18,000 and received 30,000 in ee contribution. assuming ee is catch up eligible part of the deferrals can be treated as catch up. since we are not through the end of 2005 not sure what year is being talked about, and if it is non calendar year I get all twisted in regards to catch up that anything I say would probably be incorrect. so I keep my mouth shut and depend on others. If, AND ONLY IF, the plan allows it, deferrals may be returned to the employee. 1.415 - 6©(iv) clearly permits it, but then goes on to say including 'gains attributable to those deferrals'. the regs for most other corrections say 'include earnings' which would be both gains and losses. however, in regards to 415 it only says gains. in fact, later on in the same paragraph it soeaks on investment gains and investment losses in regards to suspense accounts, so this would seem to be pretty specific.

If it smells funny you know you probably can't do it. (Poj Interpretative Thought of the situation) The regs word it this way A plan satisfies this paragraph © if the manner in which employees vest in their accrued benefits under the plan does not discriminate in favor of the HCEs. Treas Reg 1.401(a)(4)-11© It does not matter if only one HCE vests at 100% immediately. You have zero, zippo, none, etc NHCEs with this advantage. you fail BRF (Benefits Rights Features). do not pass go Do not collect 200. Hey, welcome aboard!

Belgareth: that is how I understood the comments to be taken (unless the person also received a match, then since he received employer money you count his comp toward the limit) sorry any session notes are packed in a shipping box sent via slow boat to China, so someday I may see them again. The scary part is that the deduction issue makes logical sense to me. Lady MacDuff: tried looking for your name badge, thought maybe you didn't make it. good grief. I have no talent to build something like that, getting a big kick out of the fact it was a talked about item. Next year we were thinking of having a drawing so someone can fire the silly thing - set up some paper targets like : irs agent, pbgc man, dol figure, your favorite client, your software vendor and your boss. The night before I ended up talking to the photographer about misc. stuff and had mentioned I was going to haul out the rubber band gun. he remembered me as the scarecrow at last years session, so he said he would be in the room to get pictures. so, as I said, hopefully there will be some pictures someday. (sob, sob. I'm hurt if all they remember was the gun and not the Louis Armstrong pension song!)

Thought it was a good conference. can always learn something. compensation used for determining 25% deduction purposes. one session noted that in the past you could count anyone eligible to defer. now that deferrals do not count toward the total deduction, you could not use the comp of someone who deferred but did not get a match or profit sharing. guess I am slow to pick up on stuff like that. ................... highlight: riding down on the elevator, stops on one of the floors and 3 ladies walk in. the one lady, looks at me and says "Oh, we were just talking about you" turns out it was Kate Smith, PA, formerly Kate Smith, MD who way back when confused us into thinking she was a doctor rather than being from Maryland. what a laugh, what are the odds of actually ending up on the same elevator like that. It was neat to see a few other faces from BenefitsLink, and one or two who referred to themselves as 'lurkers'. .................. think my talk went well. showed off 'the devestator', hopefully there will be some pictures on the ASPPA website some day. of course, my talks include some very bad dry humor, including the following advertisement for an unmarried woman (Anita Haircut) that owned a chain of resteraunts that featured steak.

415 limits are a strange animal. they are actually based on plan year end. 1.415-6(d) references 1.415-5(a) adjusted ... limit.. is effective as of January 1 of each calendar year and applies with respect to limtation years ENDING with or within the calendar year.

one in which there is an integration level above and beyond mortal plan powers. e.g. contribution allocated up to 5% of pay, any leftover allocated 200% in excess of the TWB. These were the designs before the IRS gave approval for 'class' allocation plans.

if you like optical illusions try the following http://gpsinformation.us/main/humor.htm and then click on the first item: moving object illusions. and go to that link. there are 60 of them, I particularly like the one that looks like a motorcycle driving down the road. I would have posted that web site but there are other humorous things on this page. scrolling down to the dog and cat humor was the following picture entitled "why the dog left home": good grief! Wonder what that thing eats!

I suspect it is possible, but probably only throuh individually designed plan. the regs (1.401(k)-3©(1) simply says safe harbor is satisfied if a QMAC is made for all nhces that satisfies either the basic match or the enhanced match. (2) is the basic match (3) is the enhanced match (4) says hces cant get a higher ratio of matching contributions (note the way I read it doesnt matter if those matching contributions are safe harbor or not. (5) gets into the issue of matching after tax contributions, doing things on payroll basis 6) discusses what limitations can be placed on deferrals e.g. caps, limits on comp, etc.

my question would be can I design a document that actual simply says the SHNEC will be at least 3% and the notice I give says the same thing. and thus, provided I give at least 3% I am ok. or does the document have to be specific as to the exact percentage. but then I have been seen riding a duck, so maybe my thoughts aren't worth a darn.

The regulations simply require a SHEC of 'at least' 3%, so it is certainly possible to have a SHNEC greater than 3%. now, is there a document available that does that? Corbel has one that you enter a fixed % (hopefully user will fill in at least 3%). the other option would appear to work in conjunction with the 'maybe' notice, where no % is stated until at least 30 days before plan year end. now, can you have a docment that would be hardcoded something like "A SHNEC of at least 3%..." to me that seems possible, but I have never seen such an animal, nor am I a legal expert, so maybe you can't hardwire the document. you ceratinly have to follow the terms of whatever document you have so I doubt you can simply increase the SHNEC. Can you put in additional contributions? of course, if the document allows it. they simply wouldn't be safe harbor. I guess the question would be why you want to do that.

No ducks were hurt in the filming of this picture

one of the problems with safe harbor plans was their newness and the final regs addressed some issues about clarifying how they were supposed to be handled. The general feeling I get based on comments, people put the safe harbor language in the document, and then used the notice to state whether the plan was safe harbor. not how things were suppose to be done. the notice is merely a piece of info to tell particpants that a plan actually exists. sort of like an annual spd. this is to prevent the HCEs from having a plan, telling no one, and then using the safe harbor match and getting a free ride. or at least that is the best I can tell. or I have seen SPDs that say the plan is safe harbor, and if the company decides to make a safe harbor they will tell you in the notice. hopefully you have something like that and maybe the auditor would accept the confusion in regards to safe harbor plans. even the preamble states that "these regulations CLARIFY that, except to the extent permitted under 1.401k-3 and 1.401(m)-3, the plan may not revert to testing for the plan year'. To me that statement implies the IRS realizes that confusion exists, and some things weren't done quite properly. anyway, to get back to your question. if the document says it is a safe harbor with a 3% SHNEC then that is what it is regardless of whether a notice was issued. The maybe notice implies the plan has no language in it. then 1 month before the end of the plan year the document is amended to say something like: for 2003 (and 2003 only) the plan will provide a 3% SHNEC. or For 2003 and the rest of its days until amended the plan will provide a 3% SHNEC. now, you know and I know most plans were probably not administered that way. but the question would be can you argue the point and get away with it.

correct Mr. ERISA. Stephen - I have already decided to 'adapt' one of Louis Armstrong's songs.

digging back through my notes, gasp, too much dust, this goes back to the first ASPPA conference I ever attended 1997 Q and A question 30 (somewhat abbreviated via my typing) is it permissible to have a plans effective date preceed the existence of the plan sponsor...in other words, can we have an effective date of 1/1/97, and use all compensation paid for the 12 month period even though there is no payroll prior to 3/1, and therefore no need to prorate the limits? Answer: It seems reasonable that with proper attention to details of the plan design (including effective dates as outlined above) the issues of concern can be avoided. We know of nothing that prohibits provisions such as those outlined above. of course the Q and A's are general opinions of a given IRS agent and don't necessarily represent an official position. on the other hand, it gives a leg to stand on. and if you are submitting for a determination letter why not just submit and see if you get approval. otherwise, it is my understanding you would have to prorate if you go with a 3/1 effective date, but then, that is not my field of expertiese.

algebra 101 solve the following: 3(a - 2) = 5a - 10 simplify 3(a - 2) = 5 (a - 2) divide both sides by (a - 2) hence 3 = 5

trumpy is correct, document language is important. you could have a match that is 100% vested, but, for example, if it is not subject to the withdrawal restrictions then it would simply be a 100% vested match and not a safe harbor. or if their were eligibility conditions on it. in addition, if there are no other contributions, then you never get to the point of discyussing safe harbor discretionary because you do not pass ADP safe harbor.

here's hoping to see at least a few of you folks at the conference Nov 6 - 9. have to give a talk, plus the boss is setting up a booth so I should be easy to track down. always nice to put a face with some of the names I see out here.

the 21st century actually began in the year 2001. so this year is the 5th world series of this century. This means, including this year, the Yankees will have lost 40% of the World Series in this century. If the White Sox, the Yankees will be responsible for 100% of the Amrican League losses. from what I can tell they have spent an amazing 900 million in the last 5 years to ccomplish this feat. way to go. gotta love it. oh, the Yankees have never won the World Series in this century.

yes. send me your e-mail and I will e-mail you the report. It will cost you a smile in my general direction. (sorry, I can't post that type of report on benefits link. I think it is a security blocker at this end, though I can post excel files, so who knows) Heck, its been so long since I used this report my brief note at the top of the report says you have to click on zero activity accounts to make it work. that was a precaution if you had investment choices and one of those choices used to have money but no longer does.

my understanding is that you can't use the term part-time and exclude them.you could however write the document to say something like completion of 300 hours in a 3-month period or 1000 hours in a 12 month period which should accomplish the same thing, unless you have 'part timers who work a lot of hours for a few months and few hours the remaining months.

I concur. my response was not a reply to his. basically we responded at the same time, but by the time I remembered to hit 'add reply' his marvelous and wonderful thoughtful answer was already there. I am just slow.

brf rules are found in 1-4-1(a)(4)-4 in particular you need to pass 'current availability' you get a free ride on average benefits % so that leaves you simply needing to have a ratio percentage (each plan, no rate group testing) being greater than the safe harbor % based on the NHCE concentration %.

my notes for my ASPPA talk say No hardships permitted on safe harbor contributions (Notice 98-52 IV.H) sounds like what your document says as well. yes, generally you can only take hardships on deferreal less earnings, though I have seen some documents that permir hardships on other contributions, e.g. Corbel checklist has the following options: nonelective acct if 100% vested vested non elective account deferrals only deferrals and vested non elective deferrals and 100% nonelective any of those would still seem to exclude Safe Harbor non elective, though I suppose the checklist could be a little more specific in regards to what constitutes nonelective.

this particualar plan was a takeover. Based on document language, it was leveraged at one time, but that was paid off eons ago. now each year contributions are made in $. I was begining to wonder exactly what type of plan code is used on the 5500. Is it still an 'ESOP' for all practical purposes. Or at what point in time over the years does such a plan cease to be an ESOP.

This was what was filled in for the table on the software for T-8 20 0.119384 21 0.118807 22 0.118208 23 0.117584 24 0.116930 25 0.116242 26 0.115515 27 0.114745 28 0.113924 29 0.113046 30 0.112095 31 0.111053 32 0.109903 33 0.108617 34 0.107172 35 0.105540 36 0.103702 37 0.101635 38 0.099328 39 0.096769 40 0.093957 41 0.090862 42 0.087459 43 0.083754 44 0.079749 45 0.075447 46 0.070816 47 0.065810 48 0.060394 49 0.054556 50 0.048333 51 0.041842 52 0.035271 53 0.028834 54 0.022762 55 0.017264 56 0.012499 57 0.008557 58 0.005464 59 0.003179 60 0.001614 61 0.000654 62 0.000167