Tom Poje

looks like the IRS has decided we don't have to answer all those extra questions in 2016.guess they still haven't gotten approval for them yet! from their website: https://www.irs.gov/retirement-plans/irs-compliance-questions-on-the-2015-and-2016-form-5500-series-returns IRS Compliance Questions on the 2015 and 2016 Form 5500-Series Returns The IRS added compliance questions to Forms 5500, 5500-SF, 5500-EZ and Schedules H, I and R. The IRS has decided that filers should not answer these questions for the 2015 and the 2016 plan years when completing the forms: •Form 5500 Preparer Information (page 1 bottom) •Schedule H ◦2015 plan year: Lines 4o-p, 6a-d ◦2016 plan year: Lines 4o, 6a-d •Schedule I ◦2015 plan year: Lines 4o-p, 6a-d ◦2016 plan year: Lines 4o, 6a-d •Schedule R ◦2015 plan year: New Part VII (Lines 20a-c, 21a-b, 22a-d, and 23) ◦2016 plan year: Part VII (Lines 20a-b, 21a-b, and 22a-b) •Form 5500-SF ◦2015 plan year: Preparer Information (page 1 bottom), Lines 10j, 14a-d, and New Part IX (Lines 15a-c, 16a-b, 17a-d, 18, 19, and 20) ◦2016 plan year: Preparer Information (page 1 bottom), Lines 14a-d, and Part IX (Lines 15a-b, 16a-b, 17a-b, 18, and 19) •Form 5500-EZ ◦2015 plan year: Preparer Information (page 2 bottom), Lines 4a-d, 13a-d, 14, 15, and 16 ◦2016 plan year: Preparer Information (page 2 bottom), Lines 4a-d, 13a-b, 14, and 15 Page Last Reviewed or Updated: 05-Oct-2016 .................................. good grief, I can hear you crying and moaning way down here in Florida, and I've hardly even posted this. Get over it and deal with it already!

a plan has to pass nondiscrim testing both with and without the QNEC (1.401(k)-2(a)(6) and so, while testing the plan without the QNEC (if cross testing) you have to satisfy the gateway without the QNEC. you cannot say "Fred received a 5% QNEC enough to satisfy the gateway. I now perform my tests with and without the QNEC"

by the way Austin, my initial reaction was the same as yours, how did it jump so much, and then looking at last year's data I realized what happened. I guess it is sort of like the year in which the CPI actually dropped, but the limitation didn't drop because of a special rule

now that 5500 is basically over I will stop and post my latest version of a report writer version for minimum distributions this can be run globally across the board on all plans. it will produce a separate report for each plan that has a min distribution haven't noticed any difference between the results and Relius standard report (except no 0 min distribution show) but of course that doesn't mean an odd exception might pop up Min Distributions Report.rpt

because last year's cost of living was 0%, therefore despite a formula which would normally have caused an increase last year, the special rule "NO COLA, NO increase in the TWB" so if you don't drink cola, there is no increase in your 'wage base' the most recent version of my spread sheet PLAN LIMITATIONs I posted elsewhere even has a chart indicating what the wage base would have been except for this special rule.

based on the new wage base, here is the calculation for covered compensation. tried this on Relius for 2017 on my dummy test plan and the numbers are the same. ........... while the rates were revised, a reminder that rates have been revised in the past, and such revisions have always been minimal. about as close as it could ever change anything was in 2007 when the actual deferral limit was 15,501, but even in that year, 'looking ahead' was accompanied by 'we have no idea until the final numbers come out. but as a general rule most years you can generally have a good idea if the rates will change or not. ....... XTitan agree with your comments, there is no way I know of how to estimate anything on the TWB, and I have used that website before to obtain the actual wage average used. I was at home yesterday and had no access to that website to obtain the actual value covered comp at 127200.xls

I was trying to figure out why the wage base shot up so much (comparatively speaking) but that is right, it would have gone up last year, but since there was a 0% soc sec increase it couldn't change. based on the new value, the national wage avg must have been around 48,100 - 48,150 or so I added the calculator for that to the most recent spreadsheet and plugging 48100 produces a TWB value of 127,200. all this takes the suspense out of the old days of attending the ASPPA Conference and learning what the new limits were.

to get around the issue of no attachment, the some folks file a 'blank attachment' simply a note indicating audit will be attached as soon as possible. years ago we did that with a 403b - it was the first year 403bs were required to be filed and we received a note back indicating something like 'ok, but this must be filed by such and such a date' and that was with electronic filing, but I think perhaps it is less acceptable without some real valid reason. I haven't seen where Florida has been granted an extension despite the fact the hurricane ripped through here, but they would probably take something like that under a late filing (depending on how late)

well EPCRS speaks of corrective distribution in amounts less than $75, and the regs use the term 'corrective distribution' to refer to failed ADP test (1.401(k)-2(b)(iv)(E)(v) is one example. so 'arguably' you wouldn't have to (but only if the costs of processing things make it nonsensical) 6.02(5)(b) Delivery of small benefits. If the total corrective distribution due a participant or beneficiary is $75 or less, the Plan Sponsor is not required to make the corrective distribution if the reasonable direct costs of processing and delivering the distribution to the participant or beneficiary would exceed the amount of the distribution. This section 6.02(5)(b) does not apply to corrective contributions. Corrective contributions are required to be made with respect to a participant with an account under the plan. I think, for example, if the asset house charged $50 for any distribution, then in your case the HCE would only get $1 perhaps the other issue which I have never seen addressed, lets suppose you make the refunds because there are no distribution charges. does the 10% excess penalty for late refund apply? let's turn the question around. I run the test late, calculate refunds, pay 10% penalty. I later learn I had bad data, and the refund was overstated. so now what, I never heard of someone requesting a refund of the 10% penalty. But in that area I simply don't know, since every attempt was made to run the test correctly on a timely basis. will testing using comp - deferral change anything?

never heard that done before so I am not sure. if you stopped deferring and took a snap shot over the whole year you would achieve the same thing, but I don't think you would treat those people as not being in the group if the person took a hardship and so wasn't eligible to defer you don't treat them as not benefitting (as far as I know) but I don't know the answer to your particular question. I would think the person is still in the group just because of the above mind wanderings I made

there is no grandfather rule I know of otherwise you would simply write the document all HCEs get 200% and the NHCEs get diddly-squat and the HCE benefit is grandfathered in. that is sort of the intent of things to prevent HCEs from getting favored treatment good luck on this one.

even if it didn't and if I needed it I would still fill in the line special extension and write, perhaps "Did you read the newspaper or watch TV about how hurricane Matthew shut us down???"

What is funny about it, it is for North Carolina only!, but then the title says: IRS Gives Tax Relief to Victims of Hurricane Matthew; Many Extension Filers in North Carolina Now Affected; Relief for Other States Expected Soon I knew Dave Baker was powerful, guess he has pull up there, and we have to wait.

it really depending where you are in Jacksonville. it is so widespread a city, with a great big river in the middle as well. so if you are real close to the river, better chance of flooding we just moved the server at work to a new location at the end of August. no loss of power there. the old place - they were still without power yesterday, so we were real lucky. Power was on at my house at 5:00 Sat morning. 1/2 mile away the grocery store still had nothing Sat morning. the church I attend on the other side of the river had no power until late Sat. initially during the storm on Friday they indicated they would do nothing until the morning, then they changed it to going out after midnight. one of the local radio stations (all sports) cancelled all programing and simply broadcast reporting from different locations all Friday. Kudos to them. I had run down to Lowes the day before to get some batteries, shelves were pretty thin, but they had just gotten in a shipment when I was there so that was a bit of luck.. a number of people had 1 if not 2 generators in their carts. at times the sound of the wind was quite something on Friday, the rain was heavy at times, but really only bad because it was constant for so long. we have had days where a downpour will dump more water is a shorter period of time. I have a pump in the backyard that pushed the water out to the street, but it couldn't keep up with quantity. the back porch will flood, but I never worry about that. maybe about half of that was flooded, then the power went out and then the porch quickly filled, right up to the house, but never was more than a couple of inches from getting in the house. then not ant higher as far as I could tell. the ground level to the street is just enough that the water won't get much higher (unless I suppose the rain would continue a lot longer)

lost power at the house for about 18 hours. not bad. and most of that at night, and not being much of a TV watcher even less of a problem for me perhaps no house damage, that I can tell early in the morning have a nice grapefruit that is partially uprooted, hopefully I can get that back in May God watch over those who suffered worse.

the elevation map says the house is about 20 ft above sea level storm surge prediction around 9 ft so that is why we are not in an evacuation area. a couple more brief power outage, less than a minute around 11. enough rain that even the back yard pump can't push it out. the porch is slightly flooded, but that happens if we get a huge down pour so that is no surprise. I believe the latest local news was the storm is beginning to break a bit, so maybe it won't be as bad when it hits here. at least it is day light for us as opposed to the poor folks in the lower part of Florida when the storm hit earlier.

8:15 in Jacksonville, some rain, nothing major yet, but they have been saying the worst will be around 2. Jacksonville is spread out, I'm about 20 miles from the coast, so that makes a big difference. my house is not in any of the evacuation zones, so it really depends on the location. still, it wouldn't surprise me if power goes out in the afternoon

to back Bill up even more the ERISA Outline Book page 3A.140 2012 edition 3A 1.b. All hours for the plan year must be taken into account (even if the participant was only eligible part of the year) even the LRMs require language that use language such as 'during the plan year'

you would have to test that group of ees, but it would be rare to have an HCE in the group

well, 1.401(k)-1(a)(6)(iv)(4)(iii)(B) says you can't aggregate plans with inconsistent ADP testing methods and it clearly states a safe harbor with an unsafe harbor so that says you can't aggregate under the current conditions. and we know you have to test coverage the same as nondiscrimination, so plans have to be tested separately since plans have more lenient eligibility I would test separately (e.g. those meet 1 year svc/age 21 and those that don't) I am assuming that would probably help. Regardless of that, let's say you added all the NHCEs who were still ineligible and plan still fails coverage you have done what you could using fail safe language. so now you proceed to do something else... even EPCRS indicates you have a: © Demographic Failure. The term "Demographic Failure" means a failure to satisfy the requirements of § 401(a)(4), 401(a)(26), or 410(b) (as applied to 403(b) Plans pursuant to § 403(b)(12)(A)(i)) that is not an Operational Failure or an Employer Eligibility Failure. The correction of a Demographic Failure generally requires a corrective amendment to the plan adding more benefits or increasing existing benefits (see § 1.401(a)(4)-11(g) ). since this should be done with 9 1/2 months there is little time left without going through VCP. ....... that is how I would view the situation, so of course I could be wrong. again, I would consider testing otherwise excludables separately, which means not adding ineligible NHCEs since that doesn't solve the situation.

true, though in a case like this in which the plans are not aggregated, you could not add people, so then you have to do the next best thing

same as Belgarath, simply looked at the changes, though I did look at Appendix B, plan amendment to include ineligible, and the example still says submit for determination letter. everywhere else they seem to say don't do this so I wonder if they simply missed on this item of course, I guess anything is EPCRS including examples is 'definitely ok' and if you don't submit for a letter you are 'possibly taking your chances' but in light of the fact the IRS has practically begged you not to submit....

something slightly wrong with the numbers but it isn't going to change things that much. 135 NHCE + 76 NHCE = 211 NHCE not 208 the NHCE concentration is 98%, so if the avg ben pct test >70% you would pass. so there is always that possibility if that is close to passing by increasing it with nonelective contributions does the plan have less than 1 yr svc/age 21 for eligibility?

I assume you mean coverage testing. what type of numbers are we talking about (nhce vs HCE in each plan?

just to make sure on the terminology being used, because the thread title isn't quite correct, though it is obvious from the question being asked what is meant. as sort of pointed out by Lou Excess Contributions refers to failed ADP test so would refer to deferrals. Excess Aggregate Contributions refers to failed ACP test, usually would be match, could be after tax if the plan permitted them. Excess Deferral refers to deferrals over the deferral limit - currently 18,000 (ignoring possible catch up) Since these involve an individual limit and are a tax issue, and to avoid an individual penalty generally are to be corrected by April 15 (or more if it is the weekend), though if not corrected could lead to plan disqualification as well.