Tom Poje

on the other hand, if using Relius and the person terminated and you deleted them from the system, even though they show back on the system, my experience is prior years are not restored, and therefore the system thinks they fail the 1 year service rule. so I would check years of service the person has. (If not Relius I would be curious as well, just to know what might be going on with another software)

I think this is one of those issues that.... as I recall years ago someone asked if you could start a ACA or QACA or whatever at 6% and the IRS response was "you probably have issues" as you say "Can everyone get this match" and the answer appears to be "Yes" so Current availability passes, everyone has a chance But now you have Effective availability, which is not a mathematical test so even you can't massage the numbers to prove the facts and circumstances. is it reasonable to expect everyone to be able to defer more than 4%? In fact, if I understand things correctly, the reason the IRS capped safe harbor matches at 6% was that was considered reasonable, anything above that would have to be tested. so unless you have a bunch of NHCEs deferring more than 6% I think the facts say it is unreasonable (oddly enough, even though there is no mathematical test, at least in this case there appears to be one) I suppose if you ran the ACP test without including the safe harbor match and still pass it would be proof the effectively even the NHCEs can take advantage of this. even at that, if I had one NHCE at 50% ACP test that would seem like cheating if no other NHCE had anything. but then, consider the source making these comments..

oh great, now you want to follow the terms of the document all of a sudden

many moons ago the legal beagles at Corbel noted if you used this option you had to also perform BRF on the different age groups. so if you had 1 HCE at SSRA 65 and no NHCEs it tossed this method out the window. in addition, the regs require you test at plan's NRA, so your document would also have to have Normal retirement age = SSRA.

this is a tax issue. so one would have to revise tax forms back in 2012 (or 2013) However under EPCRS it would require VCP and a 1099R could be issued in the year of correction Section 6 .07 Rules relating to reporting plan loan failures. (1) General rules for loans. Unless correction is made in accordance with this section 6.07(2) or (3), a deemed distribution under § 72(p)(1) in connection with a failure relating to a loan to a participant made from a plan must be reported on Form 1099-R with respect to the affected participant and any applicable income tax withholding amount that was required to be paid in connection with the failure (see § 1.72(p)-1, Q&A-15) must be paid by the employer. As part of VCP and Audit CAP, the deemed distribution may be reported on Form 1099-R with respect to the affected participant for the year of correction (instead of the year of the failure). The relief of reporting the participant’s loan as a deemed distribution on Form 1099-R in the year of correction, as described in the preceding sentence, applies only if the Plan Sponsor specifically requests such relief. section VI of the VCP form has the following checkbox With respect to failure(s) #________, that a deemed distribution be reported on Form 1099-R with respect to affected participants for the year of correction instead of the year of the failure.

I have never seen the issue addressed before. My guess is that you only include those plans actually aggregated for testing the ACP test, because you only use those bodies in the ACP test, and so you are now testing to see if the match formula favors the HCEs (even if you pass the ACP test, rather than coverage. but I could be wrong

I don't know if there is any particular since everyone's situation is different. one possible consideration: Your Social Security Benefits May be Taxable IRS Tax Tip 2016-18, February 11, 2016 If you receive Social Security benefits, you may have to pay federal income tax on part of your benefits. These IRS tips will help you determine if you need to pay taxes on your benefits. Form SSA-1099. If you received Social Security benefits in 2015, you should receive a Form SSA-1099, Social Security Benefit Statement, showing the amount of your benefits. Only Social Security. If Social Security was your only income in 2015, your benefits may not be taxable. You also may not need to file a federal income tax return. If you get income from other sources you may have to pay taxes on some of your benefits. Free File. Use IRS Free File to prepare and e-file your tax return for free. If you earned $62,000 or less, you can use brand-name software. The software does the math for you and helps avoid mistakes. If you earned more, you can use Free File Fillable Forms. This option uses electronic versions of IRS paper forms. It’s best for people who are used to doing their own taxes. Free File is available only by going to IRS.gov/freefile. Interactive Tax Assistant. You can get answers to your tax questions with this helpful tool and see if any of your benefits are taxable. Visit IRS.gov and use the Interactive Tax Assistant tool. Tax Formula. Here’s a quick way to find out if you must pay taxes on your Social Security benefits: Add one-half of your Social Security to all your other income, including tax-exempt interest. Then compare the total to the base amount for your filing status. If your total is more than the base amount, some of your benefits may be taxable. Base Amounts. The three base amounts are: $25,000 – if you are single, head of household, qualifying widow or widower with a dependent child or married filing separately and lived apart from your spouse for all of 2015 $32,000 – if you are married filing jointly $0 – if you are married filing separately and lived with your spouse at any time during the year Each and every taxpayer has a set of fundamental rights they should be aware of when dealing with the IRS. These are your Taxpayer Bill of Rights. Explore your rights and our obligations to protect them on IRS.gov. https://www.irs.gov/uac/your-social-security-benefits-may-be-taxable ............................... if I understand things correctly, by deferring (assuming non-Roth) you reduce your taxable income, and therefore could avoid or reduce what taxes you may have to pay. ........................ for someone who hasn't quite reached full retirement age then maybe the following discussion from AARP applies Depending on your age, what you earn might impact the benefits you receive by Stan Hinden, February 25, 2013|

http://ntsa-net.org/Industry-Intel/MarketBeat/The-Birth-of-the-First-Ever-IRS-Pre-Approved-403-b-Plan-Documents

the notes I have are as follows: What is the date by which a top heavy contribution must be made by when deductibility is not an issue? Does the plan sponsor have 12 months after the allocation date (like a QNEC made to correct an ADP failure) or 30 days after the §404 period ends (like an annual addition)? Proposed response: The contribution should be made no later than 12 months after the end of the plan year. IRS response: The IRS was uncomfortable with a 12 month deadline, but was comfortable with 30 days after the §404 deadline for making contributions for deduction purposes, or the Form 5500 filing date. #49 Q and A 2004 American Bar Association ........................................... Contributions made after the Section 415 timing date of 30 days after the tax return due date are considered to be annual additions for the following year. However, if consider the contribution a self-correction under EPCRS, it is permissible to relate this back to the earlier year. If the contribution is made after 12/31, you are clearly under EPCRS. [One of the exceptions to the 415 timing rule is an erroneous failure to allocate. See Treas. Reg. 1.415(c)-1(b)(6)(ii)(A). EPCRS clearly treats post-415-period deposits that relate back to a prior plan year as an annual addition for the year to which it is meant to be paid, but EPCRS applies only after the 12/31/09 deadline. Therefore, there is a lack of guidance for the period between 30 days after the tax return due date and the end of the 12-month regulatory correction period.] 2010 ASPPA Q and A ..................... this gets into the nonsensical situation:. suppose you discover missing the top heavy on 10/15. Gee, I'm not going to correct between now and 1/1 because then I can use EPCRS. but as indicated above, the problem is when exactly due you calculate the earnings as late (though the amount hopefully is small enough it won't matter) ............................................... Section 9.05 example 1 QNECs on behalf of the excluded employees, distributed the excess deferrals to the affected participants, and made a top-heavy minimum contribution to all participants entitled to that contribution for the 2006 plan year. Each corrective contribution and distribution was credited with Earnings at a rate appropriate for the plan from the date the corrective contribution or distribution should have been made to the date of correction

my understanding is each stands on its own. in other words, the old Certs advertisement, it's 2 mints in one. you have 1 plan, but it is a 401(k) plan with match and a profit sharing so it is 3 plans in one. so this is supported by 1.410(b)-7(a) puts the term plan in quotes and refers to a "plan" then 1.410(b)-7(c) (1) The portion of the plan that is a section 401(k) plan and the portion of the plan that is not a section 401(k) plan are treated as separate plans for purposes of 410(b). similarly...401(m)... ...treated as three separate plans... then comes 1.410(b)-7(c)(3) which speaks of otherwise excludables. .................................... so though you have 1 plan, you have 3 plans, and therefore if you test 1 of the plans using otherwise excludable option, there is nothing that says step 1. decide if you are using the otherwise excludable option. step 2. now split your plan into the three tests but rather it appears to be 1. split plan into the three "plans" 2. now decide if you want to use the otherwise excludable option

I love it. one simple change to the regs and... some say it can apply in 2016 some say 2017 (FT William says if you are doing things on a payroll basis you can deduct now) others imply 2018 (taxable after approved, or noncalendar years that start after approval date)

I can understand it either way, but then that is why it was important to ask the IRS. usually when the final regs are released in the preamble there will be a note "Some commentators asked if these regs apply only plan years beginning 2017" or something similar to that and they will answer the question. so feel free to go out and ask for a clarification as well!

well, what is strange is I turned that off the first day I could. But all of a sudden today my settings indicated I want to receive a notifications. So I turned it off again.

I believe FT William stance is: something like the regs are eventually going to be approved in 2017. but even though they aren't approved yet, you can rely on them for 2017. those are the prior periods referred to rather than any prior period including those before 1/1/2017. I assume the FT document folks are ERISA Attorneys! .................... I suspect the evil Austin has probably gone out to the IRS website and suggested they scrap the whole thing since we can't agree on an interpretation.

so now I'm back to receiving e-mails for every post I have responded. I reset things again

I learned a long time ago, If a man is alone in a forest and he speaks, is he still wrong? that the answer was YES (and I'm not even married). so it doesn't matter what I think. I hadn't even thought about the implications until someone raised the point, and at least the bell went off in the head that said take the trouble to ask the IRS before everything gets finalized. it could very well be the way things are written now it is true you can only use going forward rather than 'even though the allocation is for 2016, since it was actually allocated to the participants account in 2017 that is ok, and so maybe they will change things.

Don't know how other document providers are handling; FT William did send out a nice list of Q and As on this issue basically, yes you need to amend, no client doesn't need to sign, no SMM needed, they are shooting for start of second quarter to have the amendment available. their list did indicate Q3: Do these regulations allow us to use forfeitures to offset 2016 QNECs and QMACs? A3: No, these regulations were published in 2017, and they did not contain a retroactive applicability date, so they are not applicable for 2016. Forfeitures can only be used to offset QNECs and QMACs allocated for plans years 2017 and later. For example, if you are making safe harbor contributions on a per payroll basis, you can start using forfeitures to offset these contributions now.

ok, thanks. yes, fail-safe language eliminates the ability to use the avg ben test if you fail coverage. that explains 'suspension' as well. I never heard that term either in regards to something like this

this is the 'famous' there is no where in the regs that it 'says' a safe harbor is a QNEC or a QMAC, at least directly. however, in the preamble to the proposed regs it indicates safe harbors are QNECs and QMACs In lieu of applying the ADP test, an employer may choose to design its plan to satisfy an ADP safe harbor, including the ADP safe harbor provisions of section 401(k)(12), described in § 1.401(k)-3. Under § 1.401(k)-3, a plan satisfies the ADP safe harbor provisions of section 401(k)(12) if, among other things, it satisfies certain contribution requirements. With respect to the safe harbor under section 401(k)(12), an employer may choose to satisfy the contribution requirement by providing a certain level of QMACs or QNECs to eligible nonhighly compensated employees under the plan.

are you bringing him via plan document fail safe language or are you bringing him in because plan fails testing so corrective amendment? If it is corrective amendment you probably have to make any such contribution 100% vested (you indicated he came in 7/1/2016. A corrective amendment requires 'substance'. providing a contribution to pass testing to a 0% vested employee wouldn't meet this requirement., I was unclear what you meant by not using ABT due to 'suspension'.

well, maybe yes maybe no you can certainly change eligibility and even someone who was previously eligible could become ineligible. I suppose in the adoption agreement Special Participation Date a. [ ] Allow immediate participation for all Eligible Employees employed on a specific date. All Eligible Employees employed on shall become eligible to participate in the Plan as of _________ ............. so lets say you only wanted this prospectively, a date of 3/1/2016 could have been filled in, and thus have the effect of a 1 month wait up until 4/1/2016. on the other hand, some document language simply says something like "Anyone who was a participant prior to the effective continues to be a participant, bleh, bleh, bleh"

anytime there are proposed regs there is a blurb such as Comments and requests for a public hearing must be received by April 18, 2017. ADDRESSES: Send submissions to CC:PA:LPD:PR (REG-131643-15) Room 5203, Internal Revenue Service, P.O. Box 7604, Ben Franklin Station, Washington, DC 20044. Submissions may be hand-delivered Monday through Friday between the hours of 8 a.m. and 4 p.m. to CC:PA:LPD:PR (REG-131643-15), Courier's Desk, Internal Revenue Service, 1111 Constitution Avenue NW., Washington, DC 20224, or sent electronically via the Federal eRulemaking Portal at Start Printed Page 5478www.regulations.gov (IRS REG-131643-15). so I clicked on the link, entered the IRS Reg-131643-15 and entered a comment. by the way, for name you can enter 'anymous' it can't hurt to ask, though usually I forget about being able to do that!

Since you can make comments, I went out and asked "if plan is amended to allow use of forfeitures as permitted under the proposed regs, can the forfeitures be used for plan year's ending 2016" (I did not add "Because Austin Powers will get mad otherwise" or RatherBeGolfing 'wants to know", but maybe that would have helped)

FT William has informed us at this time we are planning on releasing a snap-on amendment later this year to allow for the use of forfeitures to fund QNEC, QMAC, and safe harbor contributions

FT William has Effective for Plan Years beginning after the adoption of the 2010 Cumulative List (IRS Notice 2010-90) restatement, forfeitures cannot be used as Qualified Non-Elective Contributions, Qualified Matching Contributions, Elective Deferrals, or ADP test safe harbor contributions (Code section 401(k)(12)). so we have a question in to them how they will handle. I'm certainly expecting some sort of amendment of some type.