Tom Poje

I think that will actually work for the first year. for example, lets pretend you weren't even trying to exclude interns. you set up a plan, no eligibility, entry dates on 1/1 and 7/1. certainly you can do that. that gets you by for 2001. but I think 2002 (and future years) may present problems. once you switch to 1 year wait you are still required to test using the least eligibility requirements usually statutory exclusions solves the problem, but I am not sure in your case. (You didn't mention if the owners were in the plan - i would assume yes. so you have a plan in which you have immediate eligibility the first year, bringing in the hces [and by chance 1 nhce] and then putting on a restriction to prevent bringing in anybody else.

careful Fred. The average benefits % includes all contributions - (well I guess not post tax). You are also allowed to impute on the nonelective (but not the SHNEC) when testing ratio percentage for coverage (even if there was an additional profit sharing piece) I would expect you to have 100% since you can't have an hours requirement or last day provision. for the cross tested portion you would have (to make the example simple I will test on an allocation basis. deferrals and match, if they exist have no bearing at this point. ee 1 shnec = 3% profit sharing = 4% when imputing you get to use the lesser of 2* or 5.7 so ee 1 would have 3% + 4% + 4%(imputed) = 11% ee2 shnec 3% profit sharing = 10% so 3% + 10% + 5.7% = 18.7%

cautiously I say yes.- if I understand you. your statement sounds true if the ACP test was failed and match was returned as well. In other words, though I 'had' match attributable to returned deferrals, this match might have already been refunded because of a failed ACP test. so now I no longer have this match attributable to returned deferrals. and then you get to your second point, you check the rate of match after excess contributions are refunded.

let suppose the year is 2002. I would start with a 5% contribution to the rank and file. determine the amount of contribution to that group and then enter that value in the spreadsheet. Then you can enter whatever % you want for the owner and the system will do the rest for you. it is kind og hard to describe how exactly I would do it without sitting down with someone, just to make sure we were on the same wavelength. sorry. of course, this doesn't guarantee passing the nondiscrim test, but I think I sent you my nondiscrim notes as well. once you have determined an initial e-bar, you can calculate how to adjust in order to pass the tests. You would be surprised how easy this really becomes. Actually, you become lazy and simply set the routine up in another spreadsheet. there was a decent one under the cross testing board for this purpose. (I know, why doesn't the software do it - well, maybe someday)

I would think the issue would be HCEs. If the only time I perform an interim val would be for a payout of HCEs, I would have a problem with that. I guess that would be a BRF, that is interim vals favoring HCEs. if the market goes down, and the payout is only to NHCEs, then I think once again you have problems because you probably never treated an HCE that way before. That doesn't mean you can't do it, especially the way the market has been going recently, but what happens next year if the market goes up. do you also perform an interim val - and each and every time someone wants a distribution? personally I am uncomfortable with the idea, but the regs do allow it.

I don't think there is anything to prevent you from allocating a 3% safe harbor in addition to allocating a regular nonelective integration contribution, it is simply you can't apply the safe harbor toward the integration piece in any way shape or for. It would almost be like running the profit sharing contribution, and then kicking up the base portion 3%. I am not sure why you would want to allocate things that way. I would assume since the safe harbor goes to all, and the integrated has some type of eligibility attached to it, you would easily end up with different people receiving different contributions, and therefore require cross testing.

to be considered benefiting for the nonelective portion, the system looks to see if the ee actually received a contribution or forfeiture in his account. I have never seen it do otherwise. if the contribution is due to top heavy, then you have to check 'unsafe harbor' on the nondiscrim screen. (of course, if it is top heavy, he should get a contribution based on full year comp) the safe harbor/unsafe harbor toggle is in accordance with the nondiscrim rules. an ee is treated as benefiting if he receives a top heavy alloaction. on the other hand, for the plan to be considered safe harbor, the person is treated as includable and not benefiting....

so it sounds like you are going to have to 'trick' the system by using some field you are not currently using, and assign each account to a specific investment?

sounds ugly. I'm not sure if there is a field name 'modelnameid' or anything you could sort by. if not using trade agents, then maybe assigning trade agents = to particular model name would work.

We don't do daily, so we dont use modeling. But it sounds like you are trying to print by source? I would assume an individual has one 'model' as to how his investment gets split and no other investments? If so, then yes, thats the way we print our SOA, and certs.

Interesting. learn something new everyday. such a person is deemed to be a 'limited participant' see rev ruling 96-48 (if you go to the benefits board on the left hand side, under source documents internal revenue service rev rulings 1996 rev rulings you can find it. according to the ERSIA Outline Book such a person is presumably a participant for ERISA purposes. As such, he should be eligible for a loan.(though excluded from coverage,etc)

yeh, anybody with a name like disco must have a great opinion of music as well.

remember, my opinion could be wrong! I think liver is disgusting. in regards to former keys, it was my understanding that you completely ignore their account balance. I have never heard how their distributions would be handled, but pretend they weren't paid out. under the new rules, at 12/31/01 since they are former keys you would not include their balances. my logic says it makes no sense to include their amounts just because they got a distributions. I used to use the same argument under the old rules. you ignore people after 5 years of no service. now, just because they receive a distributions, it makes no sense to start including them again. hope that helps!

I am assuming you mean when determining if 2002 requires a top heavy minimum.my guess would be they are former-key, since they ceased to be key. and now we are under a 1 year period instead of 5. these new rules for 2002 sure are lots of fun.

best I can do is an excel sheet. I have used this to verify Relius calculation on sole proprietors / partners (again, not in cross testing, but then I never had one of those) Dave fixed it up so i can put on an xls file. super!

I have to ask Mr. Baker about this one. I have an excel sheet, you can plug in the amount of contribution to others and then the spreadsheet will figure out the salary for the owner / partner in a profit sharing scenario. You didn't indicate whether this was by class or by formula, but it can be done in combo with excel if needed.However, I don't see that xls is an acceptable format so I can't put the file out here yet. Other than that, If the owners are above 170,000 (200,000 next year) then it is a moot point

interesting question. somewhere buried under 'safe harbor' plans is that a plan that is top heavy is treated as being safe harbor if it can pass coverage if employee who receive top heavy only are treated as includable and not benefiting. no other nonelective contribution was made, so plan is considered safe harbor, hence no amounts testing is needed. on the other hand, for the schedule T you treat them as benefiting, so now you apparently are going to show them failing ratio %. Do you really have that many terminees that you fail average benefits % test?

attached is a certificate for 1 account. heavily modified, it is a real speciality allocation based on current year and 10 years ago. (non qualified) however, it is mainly the user fields. I have it set up to pull 2 ranges of user fields. Following this format, it should be possible to pull any number of ranges of user fields. Thus i have the report laid out: user 10 user 15 user 11 user 16 user 12 user 17 user 13 user 18 user 14 user 19 side by side, but in that set up. good luck. Thanks a bunch to Patti for getting e started on this one. by the way, I had to have something in user number field 1. if blank I couldn't get the report to pull anything.

I vote YES. As I recall, a plan can discontinue teh safe-harbor match (it still must provide 30 days notice). and at that point, the plan is no longer safe harbor and must pass testing. Since there was a merger, I believe you have the option of aggregating the plans (both coverage and amounts testing, not one or the other) or use the transition rule that is available.

If you can find it, The Pension Acturay, February 1993 had an article on Earned Income Calculations, there are a few paragraphs devoted to Special Situations: 401(k) Plans or read Publication 560 from the IRS. there should be enough in there to put you to sleep, but at least answer your question. For those of us who remember the issues of 'how do yor treat matching contributions' for an indivdual or for partners, etc. ah, those hooror stories.

you are of course correct. I misspoke. the ERISA Outline Book gives a great example. 200% match up to the first 5% deferred. that will satisfy, because it is not the match that is limited to 6%, but the contributions that are being matched.

the problem with the enhanced match, if I understand the rules, is that it satisfies the ADP test, but then you have the ACP test, and you would end up failing that - once the match goes above 4%

under safe harbor plans, if you provide a 3% nonelective you pass ADP test. Then to pass ACP test, you are allowed to provide a discretionary match (up to 4%) it doesn't matter if there are no NHCEs. And when you announce the match is only discretionary, it probably won't increase deferral decisions.

if there is no way you can receive a match you should not be included in the ACP test. do not confuse this with 0 deferral = 0 match, so you have received a match.

try http://www.aspa.org/educationpages/pubs/ASPApub.htm or type aspa.org and then select PUBLICATIONS it is actually 4 books, but an excellent resource as you noted, in other posts it has been used to answer a lot of questions