Tom Poje

see 1.402©-2,A-7 If min distrib required for a calendar year is not made by the end of the year,it is added to the minimum distrib due for the next calendar year to determine the amount that is ineligible for rollover not sure if that is what you are looking for. See also Q & A 79 under plan defects APRSC might apply, depending on facts

IRC 402©(4)(A) Exception for certain periodic distributions A payment is NOT an eligible rollover distribution if it is a part of a series of substantially equal payments over the life or life expectancy of the participant... see ERISA Outline Book by Sal Tripodi "Definition of an eligible rollover distribution" Any amount required to be distributed under 401(a)(9) is NOT an eligible rollover distributionIRC 402©(4)(B) If an individual receives more than the required minimum distribution, that portion IS subject to withholding since it could have been rolled over, though when determining the amount, you are permitted to figure it based on single life, even if Joint life has been selected as method for determing the minimum distribution.

1. Make sure you subtract deferrals from compensation before applying 160,000 limit. Do not cap comp at 160,000 then subtract deferrals. 2. Eligibility for profit sharing has nothing at all to do with 15% calculation. If an employee could have deferred you count his compensation. Doesn't matter if he terminated.

which returns us to the statement made: "compensation wasn't entered so system figured ee wasn't employed for the year." But the system doesn't look at that. It looks at hours, or termination, or service. I would argue if ee has hours and no comp, then it is probably owner trying to hide income from the gov't. But if you run ee with 0 comp but enough hours, the box 'exclude from ACP test' will not be checked. hence, my concern, what else was coded, since compensation doesn't trigger this item.

hmmmmm, I didn't think comp had anything to do with it. Exclude from ACP test should work as follows: Is ee eligible for a match? If no, the system checks the box. for example, if plan had last day provision, and ee quit, the box would be checked. if there is an hours requirement, and ee fails # of hours, box would be checked. if there is a match waiting period (immediate entry for deferral but 12 month wait for match) if ee fails the wait, box would be checked. An ee who does not defer is correctly treated as deferring at 0% with a match at 0% (rather than excludable) If there is another reason why the box got checked, I wouldbe curious to know. What do these people show on the 410(B) nondiscrim test for 401(m)? I know you said never mind, but you might be indicating there is a potential problem out there. By the way, there is a box 'plan allows post tax contributions' in plan specs. the default is to have the box checked. If no after tax contributions are allowed, you MUST uncheck this item!

ok, I will try again, different format. I don't understand computers 'at all', but better to have loved and lost than never loved 'at all'....or is that 'a tall' Anyway, 3 groups of employees: Plan has 739 employees 732 NHCEs and 7 HCEs Concentration % test 732/739= 99% so safe harbor % is 20.75% 1.< 5 yrs of service 420 employees 1 HCE 419 NHCEs % of HCEs 14.28% % of NHCEs 57.24% 2.>5yrs svc but < 10 yrs of service 231 employees 2 HCEs 229 NHCEs % of HCEs 28.57% % of NHCEs 31.28% 3.>10 years service 88 employees 4 HCEs 84 NHCEs % of HCEs 57.14% % of NHCEs 11.46% Determine ratio % for each group (NHCE%/HCE%) By the way group 3 will fail. You should get 20.01%

example #of %of #of %of svc # of ees HCE HCE NHCE NHCE <5 420 1 14.28% 419 57.24% >5 <10 231 2 28.57% 229 31.28% 10+ yrs 88 4 57.14% 84 11.46% Total 739 7 732 Concentration test 732/739 = 99% safe harbor for 99% is 20.75% now check each of the three groups to make sure NHCE % / HCE % > 20.75% (Note: in this example, one of the groups will fail)

My understanding is that it shouldn't matter if there is no account balance. The ees required begining date is 4/1, with a distribution of 0. (What if ee had a balance but was 0 vested- his minimum distribution would still have to be 0) And it is not a matter of being a moot point. Suppose ee elects not to recalc. Then the required begining date makes a big difference!

union portion of the plan should be tested separately from the non union. (In other words, for all practical purposes, you have 2 plans) ACP test is deemed to pass (see 1.401(m)-1(a)(3)Thus no multiple use test for the union portion of the plan. if ee shifts status, only include that portion of the year ee was union / non union. see 1.410(B)-7©(4) Based on your example, if I understand your message, last year you had 200 ees. My prior years tests are as follows: 150 NHCE nonunion ADP and ACP average compare to this years HCE nonunion ees 50 NHCE union ADP and ACP average copmare to this years HCE union ees. at least that is the way I understand it.

no problem. most documents allow anyone to stop deferring anytime during the year. As far as changing or reducing the amount, check document. some changes are only allowed quarterly or whatever.

We hope to be doing some Beta testing shortly. 5.0 has been delayed, so no one can really give you feedback at this time. In our case, going from Gupta NT standalone to Oracle, so results may be of interest to people in that specific area, just from conversion point of view. In other words, you will have to wait a few weeks before I can tell you anything. Well, off to the ASPA conference in DC to see what more I don't know about pensions!

I don't recall reading anything like that. The regs are clear that you have to take a loan first, then hardship, if plan allows both. The 'workaround' is to deny the loan - since the ee wants to take a hardship, then the ee is a bad risk, and the plan has a 'right' to deny the loan since it can't expect payment back. Well, that's what I've heard some people do.

Its late, but there is still time to register Fall Training Meeting / Southern Users Group Fri Nov 6 12:30 - 5:15 Sat Nov 7 8:30 - 4:30 Nashville Marriott Hotel $109 through Oct 14th (800) Marriott or (615) 883-9500 $150 for members of Southern User Group $175 for other user group members $200 for non members FRIDAY: 12:30 - 1:45 Crystal Reports Terri Ely, Lorraine Dorsa & Associates 1:45-2:00 Break Choose one of the following 2:00 - 3:15 Non-discrim, cross testing plans Tom Poje, LD & A 2:00 - 3:15 Quantech Hardware and Networking issues, Mitch Ely from Corbel 3:15 - 4:00 Break Pick one of the following sessions 4:00 - 5:15 Nondisrcim continued 4:00 - 5:15 Defined Benefit Plan Administration for Defined Contribution Administrators Lorraine Dorsa, LD & A 5:30 - 6:00 Reception SATURDAY All topics taught by Quantech instructor 8:00-8:30 Continental Breakfast 8:30 - 10:10 Employers with Multiple Divisions or plans also Eligibility issues 10:25-12:05 Transaction posting 12:05 - 1:00 Lunch 1:00 - 2:40 Reporting options Security/Data Management 2:40 - 2:55 Break 2:55 - 4:30 Loan processing Questions? Call Maggie Heffernan (770) 641-1429 or Lorraine Dorsa (User Group Empress) 904 249-9171

it's a distribution. Therefore you will keep track of it for 5 years

does the document allow for putting a limit on compensation to be considered for compensation? for instance, a QNEC of 100% of compensation, up to $500 worth of compensation.

See example 1.318-2 (B) Husband 25% Wife 25% Son 25% Grandson 25% Husband, wife, and son are 100% grandson is 50% (his own and his father's. 318(a) (1) (A) reads an individual shall be deemed to own stock directly or indirectly by (i) his spouse (ii)his children, grandchildren, and parents note:this does not include grandparents.

careful Jeannie, you might start learning this system! actually, you ask a very good question (and never be afraid to keep asking them) the answer depends on what year the person is rehired. lets pretend it is not a takeover. you are running 12/31/98 val. ee terminated 5/3/97. his status date should be 5/3/97. status is T his term date should be 5/3/97 (not set by user, but ssystem sets during eligibilty) the rule of thumb----don't ever forget this one-- if you ever change status, change status date. this includes changing ee from terminated to terminated and fully paid out. never touch termination date unless it is a takeover. in the case of a rehire, you change status to rehire and enter status date = rehire date. when you run eligibility, the system will 'delete' termination date. I believe if you desire to keep track of previous termination date, you will need to hand enter this in census screen. I also think the same hold true for date of rehire. (I could be wrong about having to manually enter these fields, but the dates are for reference only, and should not effect any calculations.) In a takeover situation, it is a little more complicated. Again, if ee was rehire this year, I would enter : hire date = original date of hire term date = termination date entry date = original entry date status = rehire status date= rehire date yrs of service = what ee had up to (but not including) the current year current category = terminated (with or without break in service) running eligibility should set everything for you. again, after running things, I believe you have to manually enter date of rehire and previous term date. if ee is rehire in prior year, then you want his current category = continuing and nothing in termiantion date. make sure you enter yrs af service, svc yrs vesting, etc. hope all that isn't too confusing. hope I didn't leave out something. good luck, you aren't the only one who dreads takeovers. The system will calculate prior years of service for active ees, but terminated people I have never relied on the system to do properly.

stock attribution has nothing to do with brother/sister relationship, so the 40% ownership doesn't count. the 60% owned by the father makes him an HCE

good question! sometimes the document will specifically state, however you are permitted to use 414(s) comp which means you could use gross or net comp. you have to be consistent. in other words, all deferrals, including 125 deferrals must be included/excluded. if you use only count some, then you have to do 414(s) testing as well. My experience is excluding comp only works if hce are over 160,000 and you have very few ees deferring zero. in other words, usually aint worth excluding. you are permitted to use comp only while particpant. hence, an ee entering mid year only needs to include 1/2 yr comp. again, being consistent, if using prior year data, the definition for 414(s) must be the same for the HCEs in the current year. use gross comp for determining HCE. top paid group election may be used, but this definition must be included in the document once paln is restated for SBJPA.

if it is first year of plan (no begining balance) you count everything. you always count required contributions no matter when deposited. deferrals made in Dec, not deposited until January Match, if by formula rather than discretionary (dont include these) if this was a money purchase rather than 401k, you would count the required contribution

It might depend on if match is required or discretionary. If required, then the match was not allocated according to the terms of the document. Therefore, an operational error, so should be eligible for APRSC - I would think you could argue mistake in fact. It will be a lot nicer once IRS gives some actual guidelines. if match was discretionary, I would guess match would have to be reallocated to all particpants as means of correction. Again, you would be operating in terms of the document.

Test separately, union and nonunion. same goes for 410(B). If there is more than 1 union group covered you may combine the unions or test separately see 1.401(k)-1(g)(11)(ii)(B) if ee shifts from union to non union count only deferrals for that portion ee was union/non union. if no union ees are HCE, you automatically pass if fail to correct ADP test violation, deferrals of union ees are not excluded from income real strange- ACP is deemed to pass even if HCEs are included in that portion of the plan 1.401(m)-1(a)(3) This rule does not apply to the nonunion portion of the plan

using custom reports from batch printing. it is not quite true that you can't do this. you just want to be careful. 1. make sure your custom reports are in a separate folder. 2. have Quantech report writer point to that folder. 3. give your custom reports the same name as Quantech reports. for example, name your custom report sumacct.rpt Even if it is just a report printing dates of birth. The system doesn't know any better. When you choose summary of accts from batch, it will (or should) print your custom report. Thats because the system prints what it thinks is the correct report. It has no idea you are fooling it! The hard part is keeping track of what your report really does when you give it a dummy name. Deceit works great!

I thought the BRF test in this case(if my memory serves me correctly) worked as follows: only consider one group of 'people'. in this case, 'active' or 'terminees'. the other group is treated as excludable. now run your test. In your case, the BRF is looking to make sure you are not allowing loans to terminated HCEs in a discriminatory manner. e.g. of the terminees, only terminated HCEs are eligible for a loan.

One other thing. For vesting, are you using Hours, elapsed time, or elapsed time (rounded). If set to elapsed time, then 1 year of service for vesting is correct. Elapsed time is from date of hire to anniversary date of hire. thus, a person hired 1/20/97 would not get 2 years of vesting until 1/20/99. This does not sound like what you want, so don't use elapsed time. Elapsed time (rounded) should give 2 years of service for vesting as well.