Tom Poje

ugh. I doubt you will anything on something like this. ee elected out, so allowing him to defer is failure to follow terms of the document. The idea of self correction is to put plan in a position as if error had not occurred. In the past, ees who deferred and shouldn't have were simply refunded the $. But now the recommended method is to leave the $ in the plan and retroactively enter those people. But that is for ees who failed plan's eligibility, which is not the case at hand. If an ee has an excess deferral, a correction can be made even before plan year, so there is a precedent for removing $ from the plan. EE elected out so perhaps one could argue his deferral limit is 0. Also, if I recall the situation if an ee takes a hardship and inadvertantly defers, the method is to return the $ plus earnings. at least under the correction program. now I don't remember what the correction method is.

yeh, but since you could be dealing with actuaries the response is "What do you want it to be?"

see 1.401(k)-1(b)(5)(i) ...amounts including QNECs....satisfy 401(a)(4) (ii) ...amounts excluding QNECs satsify 401(a)(4) so you have to both. Normally QNECs only go to NHCEs so a(4) is not an issue when you include them. On a side note All that is one of the reasons why it is important to treat safe harbors as SHNECS rather than QNECs

Besides the usual answer "Because its the IRS" under what conditions does the following instruction apply: This is for the 5500 count, lines 6 and 7 definition of participant 1. Active participants.....the last line says (b) former employees who have received a "cash-out" distribution... now, much less why a former employee would be considered an active employee is beyond me. item 3 is for 'other retired or seperated employees entitled to future benefits' a cashed out ee is not entitled to future benefits so under what condition would someone even try to include someone who was cashed out?

yeh, but I have full confidence in you that you will not only solve it, but also post the solution (with the usual caveats, of course) you are probably correct about the issue involving W-2 comp being thrown into the mix - Pentabe probably couldn't do it either. just dont come back and say the amount is above the max comp anyway! Though you might start by running the previous 3 yr high average - at least you know the minimum contribution. good luck!

A QNEC is still a 'non elective' contribution. therefore, for purposes of 410(b) it is tested as a nonelective, despite being used in the ADP test. 1 test only under 410(b) however, the a(4) test for nonelective contributions must pass with and without the QNECs. ......... I am really curious to see the numbers you are running if the QNEC is being given to the HCEs as well as the NHCEs. good grief, if you fail the 2 test then that means you are providing enough QNECs to raise the NHCEs to at least 8% just to get to the point of using the 1.25 multiplier. (Unless you have at least 1 HCE who will fail to receive a QNEC.

my first thought is to use the old Pentabs system because it did target benefit ideal salaries. I know that because I used that method to do ideal salaries for age weighted plans. A target implies that the contribution for the rank and file is locked in place. therefore you should know what is leftover for the partners. you should be able to determine the 1/2 FICA. So you are left with a number to split between contr / comp. I guess its time to play HI / LO run a compensation figure and see what the contribution is. If the sum is too low, raise the comp and try again. Knowing you...it will probably take 4 passes to zero in on the amount. (Or set up in excel. you know the hypothetical amount and the factors for the ee based on age, etc. Plug in a comp figure (add to 2 prior years) run through the formula, and see what the contrib is. Then you would have it for next year.

I assume you mean that you want to include the HCEs who worked < year in the ADP test. All you can do is override in census. Remember this rule only applies to the ADP / ACP test, and not coverage.

create a crystal report that includes those items and export to excel file?

Actually its on CD Rom if you want

Didn't your teacher make you memorize section VIII.F "Continued Application of the ACP test to Certain Conditions" of Notice 98-52. In particular item 3 of that section?

I have seen that in the regs, and agree a strict interpretation of the regs says a plan has to have a contribution (s) that satisfies both ADP and ACP. my best way around it is for the plan to have a discretionary match, and the match is always zero. But a discretionary does satisfy safe harbor match ...well I guess if it is limited to 4% of comp, etc.. would the IRS push the issue if there was no document language for the match? I doubt it...because the 3% SHNEC will satisfy top heavy anyway, so it becomes a moot point. But I do like the train of thought that caused you to ask the question.

oooooooooooohhhhh. that sounds like 'class vesting'. That was 'banned' back in the 80's, don't exactly remember when or how that type of schedule even worked. Maybe someone else remember that type of vesting.

I think Blinky looks better with that deep orange tan on some of the other pictures!

Mike: what about 3 eyed fish? ........ but seriously. it is abusive action of using these entry dates so late in the year that put cross tested plans in such a bad light. might s well have a 412(i) plan.

In particular, its Appendix A .02 of Rev Proc 2003-44 (EPCRS)

that sounds correct. if the only contributions that were made were deferrals and safe harbors the plan is not top heavy. it should not matter if DOP comp was used as that is an option. If otherwise excludable option is used, and those ees do not receive the safe harbor then it is a different story.

do you mean actually deposited? Deposit date is generally unimportant unless it is a year after the plan year end. If you mean match is discretionary and they haven't decided on whether to make one or how much, well, I guess it still doesn't natter - basically there is no reason you can't run the ADP test at this point in time, in fact, I would say it is certainly advisable to get it done as soon as you can. Now, if the test fails, that may effect what you do with the match. e.g. if plan allows for QMACs then the match may effect amount of refund etc...

That's it. Thanks. The 'doctor' part still cracks me up.

Tim: I figure Dave has the system working for posting reports right now, but you never know when it when it might break again. And only more than glad to share some of them. Between church and work I do find time to bake bread, make chocolates, bake cookies (Valentines just passed, yum for the Linzer hearts) Hamentaschen cookies for feast of Purim (March 6) and then some stuff for St Patricks.

if you are going to nominate all those, then I will nominate (and now I don't remember her name) but she signed her real name, but since someone else was already using it, she added her state's initial MD. and so we all thought she was doctor and wondered why she was even dabbling in pensions.. Then, as if that wasn't enough, she moved to another state and now the initials are PA

you are correct about the RBD, however the April 1 date is simply a delay in the distribution. It doesn't change the fact that the minimum distribution is still required for the 2003 year. therefore the money 'should' be distributed first. otherwise it constitutes an ineligble rollover. In fact, recall that there is nothing to stop from making the distribution by 12/31/2003 to prevent receiving 2 large distributions in one calendar year. often advisable.

ok, here is an attempted version at top heavy. now that the 5 year lookback no longer applies it makes it a little easier. I think (that is a debatable statement to start with), but I think I now have it set that anyone who "Key current year" > 1 will show as former key in all my calculations, but I might have missed one. It used to be set to >5 for the 5 year rule. The last few plans I have run have matched Relius. There have been times in the past the numbers have differed a little, but not enough to make a difference in indicating if the plan was top heavy. There is also a % indicating the top heavy % after elimnating the account balances of all terminees - sort of a crude projection for the following year. This report does not include any in-service distributions. I suppose that would be easy to use if they were entered as a user defined field in plan specs, but since I am lazy, etc I leave that to anyone who really wants to fool with the report. Ineligibles do not show on the report, and ees with 0 balance do not show, so at the minimum this cuts down on the amount of paper vs the standard report that comes with the system. Always compare results to Relius just to make sure of things. There could always be some things I missed in the totals that I don't come across often - e.g hardships and stuff like that. just never tested for everything.

Don't sell yourself short Andy. also, be careful, you could get pulled into being a moderator yet. A couple of years ago my moderator didn't show - an emergency came up about 15 minute before the talk was to start. Mike: Actually, I was thinking of doing the presentation on the theory of relativity, that would be a lot easier

yes, you can 'convert' those folks in a SIMPLE to a 401k. in fact, it would have to be possible to do that if you ever went over the 100 ee limit. You can not convert during the year if you have a model-SIMPLE. I don't believe there is any guidance if you can convert a non-model SIMPLE to a 401k midyear. I suppose it is possible to have both a SIMPLE and a 401(k), but the plans couldn't benefit duplicate employees, which certainly doesn't sound like what you are talking about.