Tom Poje

since there were only deferrals, it is obvious the plan is not safe harbor - therefore, there is no free ride on top heavy a top heavy must be given since the keys deferred, and it is equal to what the top heavy's deferred up to 3%. if the highest key deferred 2% but then receives some forfeitures, then this will increase the top heavy as well, since he will now have 2% plus forfs.

insufficient info provided.... this might depend on what year you are talking about, and what the plan document says. e.g. ee works 400 hours in 2002. he has incurred a break in service as of 12/31/2002. he gets his top heavy, but chances are for 2003 his participation is suspended until he completes a year of service. Interesting discussion in the ERISA Outline Book on this issue. Chapter 2 eligibility Rules section V Termination of employment/break in svc rules.

you compliments are much too kind. but thanks anyway! I have bumbled (an accurate description) my way through producing reports to meet some specific needs, and never have had a problem sharing them, as long as people realize there is the possibility of errors in my reports. generally, all it takes is a request like you posted, and I can always check and see if I have one that comes close to fitting what is desired.

based on the evidence, I would say yes and no, if that kind of answer makes any sense Sal's answer is in the section on 'safe-harbor' (not to be confused with safe-harbor 401k) so if you don't pass safe-harbor, what would you test? Cross test with the QNECs, which seems like a circular argument to me probably more importantly, if you cross test, you can not impute disparity on the QNEC piece

which version of Sal's Book? p 9.21 of the 2001 edition says plan must satsify 401(a)(4) when QNECs are combined with other nonelectives, and also when the other nonelectives are tested separately. see 1.401(a)(4)-1(B)(2), 1.401(k)-1(B)(5) and 1.401(m)-1(B)(5) read especially the examples

Hi back at you Patti! (Some day I gotta meet this lady who is 'stealing' my reports. Ha! Actually she modifies them a little bit and makes them even better) I am a bit bogged down with work at the moment. Enclosed is a Summary of Accounts that sorts by division and the division id (rather than name) appears at the top of each division. I am assuming it should be easy to modify. Or, from what I can tell, you can take a quick look and see how the groups are set up and modify your report to do the same.

what type of report? You know in my insanity I might have one already - or one you can modify easily.

you are correct, after the refund of excess deferrals there will be no more refund needed see 1.401k-1(f)(5) now suppose you were operating under the old rules and this guy has comp of 200,000 and someone else (HCE) had 10% deferral. If I recall correctly, the 10% guy would have had to get a refund under the old leveling rules!

I have a strong enough believe in God that the sad and tragic events involving the shuttle are only a reminder how fragile life really is. But God has a pension plan with benefits that are out of this world. During my ride home from work, Woodie Guthrie's song about the mighty Columbia river kept running through my mind, and how appropriate, may the Columbia forever roll on in our hearts and minds. Songs make an easy way to remember things, and so the names of the astronauts can be written into that song: The names of our heroes will always live on We'll not forget them although they are gone Husband, McCool, Anderson, Brown Chawla and Clarke and Ramon Roll on Columbia Roll on Roll on Columbia Roll on Lest we ever forget that dark tragic morn so roll on Columbia roll on The shuttle was flying America's best The challenge of space -it puts us to the test Somehow we know, their souls are at rest Its roll on Columbia roll on

An update ago or so I actually pulled the limits (e.g. 30,000) and it worked fine. Then something changed with an update and I couldn't get it to work - I ended up pulling zeroes instead of the limits, and I didn't have the time to fool with it or investigate it further. It might be working once again for all I know. Heck, I keep changing this fool report to suit my needs. A lot of the stuff like status and hours I just added. Mainly cuz I eliminated the soc sec number and it gave me more room. I have a similar one with a safe harbor column (but that is also hardcoded to be acct number = 800.) You could modify to test the 25% limit for a ps only plan by simply putting in a 'select' for people who receive a contribution. real easy. Thanks for the comments, too late for me, my hair is already beginning to gray.

Larry: Careful! Bush is lining up soldiers for another purpose. If you do a good job on this one he might want to put you in charge! Or are Pandas a protected species?

2much: I was trying to think of something witty to say, but nothing comes to mind so you will have to put up with the honest answer. I brown bag it for lunch, and then take a walk for the remainder of time. A little prayer time, and time for other reflection just to clear my mind, and the ideas simply come to mind.

well now that is a fine kettle of fish. so I would see it as follows: 1. test coverage treating the TH people as benefiting and put the result on your sched T. 2. test treating the TH people as not benefiting, a. if plan passes 410(B) you do not have to test 401(a)(4). b. if plan fails, you have to test under 401(a)(4) i. test using allocation method. if plan passes you are finished. there should be no gateway, since you did not cross test - at least that is how I understand it, the gateway only applies to cross testing ii. if plan fails allocation method, test using accrual method. at that point you are cross testing and therefore have to bring up the people to the gateway minimum.

sorry, I don't have a cite for you, but they should apply to the year in which they were required. Logically that only makes sense. Consider a couple of examples. A terminee who quit in 2000. You have given him forfeitures this year, yet his comp is 0, thus his 415 limit would be 0. you could never make a correction. Or consider an ee who had missed contributions for a number of years - and is due 50,000. since the maximum is only 40,000 you couldn't make a full correction in the current year oh, see, I am so slow that while writing this I found the cite, under 2002-47 PArt III, section 6.02(4)(B)

hopefully I knocked off a few of the problems. (though I have hardcoded the limits) Good luck, as always if you dare to use one of my reports verify the data! I offer no guarantees, only humble attempts at producing some extra useful reports This report will list def / match/forf/profit sharing, and some % data It will tell you if someone is at the limit It will give you 25% deductibility - you have to include zero activity accounts for those that don't defer and have no balance. Therefore it is designed for 401ks not for profit sharing plans. If you use census user field number 1 it will even produce grouping totals. It will indicate the ees status and # of hours dang, I think it will butter your toast and walk the dog as well.

Arch: If you fail 410b with the TH people, then you have to 'expand' the group, using a corrective amendment under xxxxx-11g or whatever that fool thing is. It has to be a meaningful benefit - if ee is terminated, and 0 vested then that wouldn't work. You could give him anything, but then no matter what you would have to pass a(4), so give him enough to pass that as well.

thanks for the update. as usual, looks like some extra work when switching to 8.0 in regards to the Crystal reports.

A grandchilds ownership is attributed to the grandparent. The stock the grandparent owns is NOT attributed to the grandkid. 1st generation 50% 2. 3rd generation 50% 1 owns 100%, but 3 only owns 50% This is code section 318 rules

The logic of the plan to make things simpler so maore people adopt plans makes no sense. Such an animal already exists, and no one wants them. Standardized plans. But now they want to take away the ability to even integrate the plan. But you don't have to integrate anyway. So really, the only change is getting rid of top heavy. ok, a change to the definition of who is an HCE, but since the plan passes coverage, who cares. so it looks like this proposal takes the standardized plan and gives you even less options in return for getting rid of top heavy. But you can already do that if you adopt a safe harbor 401k.

This was the landscape version I posted months ago. You could always edit it

yes, because 410(B) is only interested in how many NHCEs are covered as compared to how many HCEs are covered. Thus the sched T treats any receiving something as benefiting. 401(a)(4) is concerned with the 'how much' comparison between NHCEs and HCEs

wait, wait, wait. Exactly what are you saying. It sounds like you are saying: Plan passes coverage if top heavy people are treated as includable benefiting. Ok, that is all you care about for coverage. Now you fail the safe harbor (unrelated to coverage). The document shouldn't be addressing that issue. that is 401(a)(4)

[Full text of the press release with first details of the proposal: http://benefitslink.com/cgi-bin/pr.cgi?dat...tabase_id=33984 ] Good grief. check these suggested changes out! Yes. The proposal includes the following provisions that would greatly simplify the administration of all defined contribution plans: 1. There would be a single test to show that the plan meets the nondiscrimination rules with respect to coverage -- ratio-percentage coverage. Under this test, the percentage of an employer’s nonhighly compensated employees covered under a plan would have to be at least 70% of the percentage of the employer’s highly compensated employees covered under the plan. The other coverage testing alternatives would be repealed. 2. Permitted disparity and cross-testing would be prohibited for defined contribution plans. 3. The top heavy rules would be repealed for defined contribution plans. 4. There would be a uniform definition of compensation for all purposes for defined contribution plans – the amount reported on form W-2 for wage withholding, plus the amount of ERSA deferrals. 5. A simplified definition of highly compensated employee would be adopted under which all individuals with compensation for the prior year above the Social Security wage base for that year would be considered to be highly compensated employees. Does the ERSA proposal have any effect on defined contribution plans that do not involve employee deferrals or employee after-tax contributions? In other words, does the proposal affect pure profit sharing plans, stock bonus plans, and money purchase pension plans? Other than the simplifications discussed in the preceding question, the ERSA proposal would not affect the rules applicable to employer contributions to defined contribution plans, other than safe harbor nonelective contributions or matching contributions. Does the ERSA proposal have any effect on defined benefit plans? No, the proposal would not affect the rules applicable to defined benefit plans.

yes, providing the document says so. see 1.401(a)(4)-12 definitions 'compensation' (4) Period of plan participation if plan is tp heavy, you still get at least 3% of all year comp

If my fading memory serves me correctly, you simply combine the prior year tests (weighted average) thus if you had plan 1 ADP NHCE (15 ees) 4.00 plan 2 ADP NHCE (10 ees) 3.00 is not (4 + 3) / 2 = 3.5 average but rather 15 * 4 = 60 10 * 3 = 30 total ees = 25 total 'sum' = 60 + 30 adp avg = 90 / 25 = 3.60