Tom Poje

the 3% SHNEC meets the ADP safe harbor the required match is capped at 6% defrred, so that would meet the ACP safe harbor. while an ee who defers 6% would get 4.5% of compensation in matching contributions that is ok because the 4% cap only applies to discretionary match. As long as there are no eligibility restrictions (hours or last day) the match would appear to be ok.

Over the years an ESOP has made cash contributions to the plan to the point where cash assets are gretaer than 50% of the total balance, hence the plan is no longer invetsed primarily in stock. what are the ramifications?

well, it should be the vesting at the time during the plan year of failure. so I would normally say 50%. how about if I say neither of your answers is correct as long as you have a decent document? the new regs have an example #7 in 1.401(m)-2(b)(5). basically, as long as the person will be fully vested in a few years you are ok and as long as the 'plan provides a seperate vesting schedule for vesting these nonvested matching contributions'. so as long as your plan has some type of language dealing with 'partial vested distribution' you are ok. eg. usually it reads something like X = P(AB +D)-D x is vested bal, P is vest %, AB - current account bal D is distribution. the example says refund $1000. (modified for your case) ee is 50% vested 2 choices $500 refund and $500 forfeiture. alternate $1000 refund, BUT.... after his refund account balance is $1000. normally 50% vested would show $500, but he has already received that, so his vested balance is 0. now at the end of next year he is 75%, so his vested balance would be an additional $250.

no. if calendar year plan you have a few days to put in a corrective amendment to provide a meaningful benefit to enough people to pass.

1.401(a)(4)-8(b)(1)(v)©(iv)(A) minimum gateway if each NHCE has an allocation rate at least 1/3 the allocation rate of the HCE with the highest rate. (B) deemed if each NHCE receives at least 5% of 415 comp (can be from date of entry) note it says 'each' not 'only those meeting an hours requirement'. (though NHCEs who receive nothing to start with stay at nothing - this was made clear in the preamble) a reminder: you cant simply bump people to the gateway. the document has to allow for it. otherwise you need a corective amendment.

shhhhhh. The Yankee owner is thinking about buying the Dominican Republic, that will give him a lock on all those players.

oh, silly me, you need to click on 'expert picks' (or here is the direct link: http://collegefootballnews.com/2005/Predic...ExpertPicks.htm for you Penn State fans, he 'predicted' they would win the last two weeks as well. He is picking them over the Wolverines this week. (We have a Penn State man in the office as well, so I know these things.)

yes indeed. the amazing chicken 'lays' it on the line by 'pecking' Nore Dame this week. Does the 'ruffle the feathers' of you California folks? I'm sure Clucko doesn't care. Will he get 'egg' on his face? only time will tell. Hey, Clucko has picked the winner of the Nore Dame game correctly everytime this year. (We have a Notre Dame grad working for us and he looked it up) I thought perhaps maybe this was just a 'cheep' gimmick, but then it dawned on me we have a 3-eyed fish that knows pensions, and a hairy 'what's it' who knows...um...I'm not sure what he knows, but he knows and thats good enough for me. How does he do it? from the website : Put down two feed dishes, one representing one team and one representing another and whichever dish the chicken goes to first is the team that's going to win. To see if Clucko picked your team, go to: www.collegefootballnews.com

well, there is always the super cram session on Nov 6 at the Fall ASPPA conference - if you happen to be going.

this all depends on what the document says. you should have a copy of the SPD (Summary of Plan Description) will provide the basic info. 1. document does not have to allow for hardships, so it might be impossible to get hardships anyway. 2. even if document allows for hardships, you can withdraw deferrals only, no gains on the money. 3. since you indicated loans were possible, the law requires taht you exhaust every means to obtain money before taking a hardship - that would include loans. so, based on the facts describe, it sounds like you would have to take the loan first, and the maximum is generally set at 50% of the vested balance, because, yes indeed the other 50% is considered collateral on the loan. without knowing the exact loan provisions I can't say more, but that is generally the case. (If one could argue the loan would be a bad risk I suppose it could be denied and then if the document allowed hardships you could get around it) based on what you indicated it sounds like there is no other money in the plan (match or profit sharing) or that loans are available on deferral money only. otherwise you could get the loan on that money and then a hardship on the deferral. sorry, wish I could be more helpful, but that is the law. remember the whole idea of these plans is to have money for retirement, not to operate like a credit union. It sounds like you have someone that is administrating the plan as it should, which is really good news. HOWEVER, ALL THAT BEING SAID, the regulations recently passed (Dec 2004) clearly state that you can't be put in a counterproductive position. e.g. by taking a plan loan you wont be able to obtain an additional loan from the bank for the purchase of a house, etc. this is found in Treas Reg 1.401(k)-1(d)(3)(iv)(D). These particular regulations become effective 1/1/06. You might be able to argue your case on these grounds, though the plan wouldn't have to follow them until the beginning of next year. good luck.

correct, if by 'everyone' you mean all the part timers. of course, no ones comp will be above 90,000, so the point becomes moot as you shouldn't have any hces in the test involving otherwise excludables.

only SIMPLE plans have to be calendar year. safe harbor can be non calendar.

sounds like plan has immediate eligibility. so far so good. but "when testing only the ones who actually do defer are counted for testing purposes" this would not be correct. anyone eligible to defer (regardless of whether they actually defer) are tested. however, you are allowed to run two tests using the 'otherwise excludable' rule. if these ees never work 1000 hours, they will forever be in the group of ees otherwise excludable. The otherwise excludable group should always pass because you either never have any hces in that test, or you move them into the other test under the special rule pertaining to hces and otherwise excludables.

simple answer is yes. a more complex answer would be to say I would want proof that all nhces are aware a plan exists. it is one thing to say that a notice was given to employees, its another thing to prove. possibly have people fill out election forms indicating 0 deferral. I only bring out the point because if plan was ever audited it looks bad.

is this what you are looking for? http://www.irs.gov/retirement/article/0,,id=96450,00.html

well if I did that, I would use Frank Sinatra's "I did it my way"

document says use high 5 consecutive years in last 10. ee accrued a benefit, quit, and now returns after 9 years. since they have a vested benefit, all service is restored. going forward what is average comp? just the current year if that is greater than the previous hi 5??

I would say yes you need a corrective amendment based on your description. depending on the comps, I would guess testing on an allocation basis and imputing disparity would result in an allocation slightly less than 20%

rate of deferral is a 'right'. I suspect two things would happen in such a plan. ADP test would fail since NHCEs would not defer. BRF could be deemed to fail effective availability. in light of the fact safe harbor 401k have a basic match at 5% deferrals, I suspect the 5% would be used as a guideline for the 'smell' test. anyone who didn't defer could be deemed as not being able to defer under the effective availability test.

As far as I can tell there is a series of comics in some country way across the water featuring a beer guzzling bartender with some familar sounding name. supposedly very popular. so they named a few beers after him. doubt it is still made, though if anyone ever finds some of the stuff I would love to have a bottle just to sit on the shelf. well, my brother was fascinated by the whole thing, but as far as he can tell the silly stuff isn't made any more. stephen: I am sure of this, the beer itself isn't free.

well, apparently I had a beer named after myself!

I see defined contribution would have to go to 2/20 or 3 yr cliff vesting for all nonelective contributions. (sec 1006)

Quint: no clue what a Gansett is, since you said 12 pack, I assume some type of beer. actually, no I never even tried a beer, but then I never tried coffee either. ....But I slept at a Holiday Inn once

I dont know. we are still at 9.0 so maybe 10 has added these? except I would expect them to be named other than GAR

started in pension about age 30 and have been at it for almost 20 years. stumbled and bumbled my way along to help edit one of the Pension Answer Books despite my stubborness, have managed to gather enough knowledge about Pentabs/Quantech/Relius software to be able to write a decent report or two must be rather dull - never married or fooled around, never have been close to be being drunk (oddly enough I do make wine), etc. found a movie puzzle that I posted that apparently has been a big hit based on comments and number of downloads. make the birthday cards for the people at work. ASPPA has been 'dumb' enough to ask me give presentations, so they have had to put up with a scarecrow, fractured pension songs and other such silly nonsense. Most importantly, my faith does mean everything to me, but then God has a plan with benefits that are out of this world - and He guarantees them, no PBGC to worry about.