Tom Poje

imchipbrown - the match would also have to be 100% vested. in effect it is a QMAC, which of course could always be used in the ADP test anyway, so it really isn't 'shifting'. but it is a possibility that exists if the plan allowed both discretionary and QMACs.

that would be my understanding, but also rare someone has actually done it. and as was pointed out, you need to have an after-tax account set up (not roth) to at least track things.

I don't think it would even make sense to talk about having a 'basis' by paying back a defaulted loan. since a loan (even if it is defaulted) continues to accrue interest, it effects the ability to take new loans, so there is a valid to repay a defaulted loan The ERISA Outline Book has the following comment Chapter 7, section IX D 4.Obligation to repay not waived because of deemed distribution. Since the deemed distribution treatment under §72(p) is solely a tax rule, and is not treated as an actual distribution for other purposes (see 3. above), the deemed distribution does not affect the participant's continued obligation to repay the loan. The loan obligation is not extinguished until the loan is repaid, either by the participant through a resumption of loan payments, or by offset against the participant's accrued benefit, pursuant to the plan's security interest. In fact, there is still a fiduciary requirement to enforce the loan, since ERISA requires the governing documents of the plan be followed (e.g., the written loan provisions or loan policy that is part of the plan), and to protect the benefits of the plan participant. See the discussion in Part E. of this section regarding the repayment of a loan through an offset against the participant's account balance or accrued benefit.

that makes sense so unless one of the NHCEs is deferring at a great rate comp less deferrals won't help

if owner is at max comp, then test use comp less deferrals in testing?

without even thinking about other ramifications, would such a plan even pass the comp test?

my concern would be if it is a controlled group, and she is the only one in the plan, how would her plan pass coverage? 1.401(k)-1(b)(4)(iii)(B) indicates you can't aggregate a plan using safe harbor with a plan that uses the ADP test. since coverage and nondiscrim have to be tested under the 'same conditions' this would seem to create a problem. Interesting, I hadn't thought about the idea 'why would a partner only plan ever be safe harbor' but I guess this would be case. I guess HCEs could be excluded from the safe harbor . sure seems like around about way to do things.

and if the HCEs are not deferring, time to consider amending the plan

the example under EPCRS (#6) is QNEC for missed deferral: Employee Y’s missed deferral is equal to the 10% ADP for highly compensated employees multiplied by $130,000 (compensation earned for the portion of the year in which Employee Y was erroneously excluded, that is, January 1, 2006 through June 30, 2006). The missed deferral amount, based on this calculation is $13,000. However, the sum of this amount ($13,000) and the previously made elective contribution ($5,000) is $18,000. The 2006 § 402(g) limit for elective deferrals is $15,000. In accordance with the provisions of section 2.02(1)(a)(ii)(B), the missed deferral needs to be reduced by $3,000 to ensure that the total elective contribution complies with the applicable § 402(g) limit. Accordingly, the missed deferral is $10,000 ($13,000 minus $3,000) and the required QNEC is $5,000 (that is, 50% multiplied by the missed deferral of $10,000). The QNEC is adjusted for Earnings. so as the example shows, it is the 'missed deferral' that gets reduced, but then the QNEC of the missed deferral is 50% of that.

Now that 5500 season is over If you have never run a report globally, follow notes above. This will produce a report for every plan that has (or might need) a minimum distribution (I ended up with 110 of them - each report will be labeled min distribution report followed by the plan ID). works only on DC plans (and possibly cash balance plans because they have an account balance) Report should work every year until they change the min distribution factors. of course it's a use at your own risk, but I haven't found any differences between the results and the "standard" Relius report. (well, ok, sometimes you have to 'set trade date field' to enable the Relius standard report to pull the actual balance.) reminder: adjustments may be needed for non-calendar year plans. Min Distributions Report.rpt

the corrective amount doesn't show on your W-2 as deferrals either

the corresponding covered comp table is enclosed. created a 2018 plan year on Relius, and the calculated numbers are the same as to what they would use for imputing disparity in the nondiscrimination module. so success! covered comp at 128700.xls

https://www.ssa.gov/OACT/COLA/autoAdj.html this was on the soc sec website, taxable wage base = 128,700

A reading from the book of Regulations Section 1.415(j)-1(d)(2) .....multiplying the applicable dollar limitation for the calendar year in which the limitation period ends by a fraction, the numerator of which is the number of months (including any fractional parts of a month)... to make it fun 1.401(a)(17)-1(b)(3)(iii) simply says the numerator of which is the number of months in the short plan year, the denominator is 12 (no mention of using fractional periods) of course every example I have ever seen always had a plan year ending at the end of the month.

Mr. Preston pointed out that there was an error in the spreadsheet. one of the columns I added was for SIMPLE (a type of plan which I never worked on in my life) the error has been corrected Thanks Mike. indexed limits.xls

as a side note, or as back up, or whatever I would add the following 1.401(a)(9)-2 A2 …the calendar year in which the EMPLOYEE attains age 70 ½… so the regs say employee not participant, so it doesn't appear to matter the person in question was not a participant on 12/31/2014 1.401(a)(9)-5 Q8 what the heck happens if the person is not vested? (ok, I paraphrased a little) A8 - only the vested portion is required to be distributed (hence, if 0, then 0) HOWEVER, the required min distribution MUST (under penalty of torture) be increased by the sum of the amounts not distributed in prior calendar year's because the employee's vested benefit was less than the required minimum distribution. granted in your case if the balance was 0, then obviously no increase for prior distribution not made. but if there had been a balance and the person was 0% vested then you have to carry forward stuff. I suppose that could happen if you have 65/5 for being fully vested, or something like that.

and if the figures used to determine soc sec increase similarly (they use CPI-W) expect an increase of 2.0%, quite substantial. last month's estimate was 2.2% by the soc sec admin. (if I understand that formula correctly) the calculation is done by comparing the CPI-W factors (for July-Aug-Sept)to last year's factors. (239.668 – 235.057 / 235.057 x 100 = 1.96 percent (rounded to nearest tenth percent so 2 percent increase) which of course means since they will be paying out more you will hear more doom and gloom about the fund. Note if there was no increase in the prior year you would use the data from the prior year that there was an increase.

the Sept CPI-U was released today so we should see deferral = 18500 comp 275000 415 limit 55000 DB 220,000 no change to Key ee and HCE, they were very close no change to catchup (with my 'useless' spreadsheet) indexed limits.xls

some thought (on Friday the 13th) this can get ugly. the Cash Balance is required so has to be made. the profit sharing is discretionary so if not made you haven't done anything 'wrong'. except this will result in a failure to satisfy 401(a)(4) however a failure to satisfy 401(a)(4) is a demographic failure. Section 5(c) of EPCRS but under EPCRS section 4 .01 (2) VCP - ....for demographic failures in other words, you can't self-correct except using VCP

safe harbors are supposed to be provided to anyone eligible to defer (at least NHCEs), but it sounds like that is not going to happen 1.401(k)-3(b) [SHNEC] and 1.401(k)-3(c)[SHMAC] or put another way, we want a free ride on the ADP test but we are only going to give a safe harbor to new ees. the heck with all the other NHCEs. after all, they still get a ps contribution. for better or for worse there is no 1.401(k)-3(x) Exception to the rule requiring all NHCEs to receive a safe harbor if the plan provides something else instead to some NHCEs

the problem with the cite is it doesn't specify if it is 'participant at anytime during the year' or 'only at the end of the year however, all sample language I have seen for SARs has the line Benefits under the plan are provided by (indicate funding arrangements). Plan expenses were ($ ). These expenses included ($ ) in administrative expenses and ($ ) in benefits paid to participants and beneficiaries, and ($ ) in other expenses. A total of ( ) persons were participants in or beneficiaries of the plan at the end of the plan year, although not all of these persons had yet earned the right to receive benefits. so I would argue using that for the definition of participant (EOY)

as close as you can get is 29 CFR 2520.104b-10(a) which states in part that "the administrator of any employee benefit plan shall furnish annually to each participant of such plan and to each beneficiary receiving benefits under such plan (other than beneficiaries under a welfare plan) a summary annual report ". ............................ that was from an old post with the added comment there is nothing that says "only participants with a balance"

somewhere I read recently there is even talk of eliminating it. of course, if you think about it everyone has access to the 5500 on the DOL website anyway, so the silly SAR form makes even less sense than it might have years ago.

ESOP Guy Line 3 above needs to be edited as those dates are impossible unless you have powers beyond things I understand. (one of your rare typos, maybe the first I have noticed) I assume it should be 1/1/2016 to 10/31/2016

Maybe it's a typo and they meant 'bungled'