Tom Poje

arguably the contributions were 100% vested when made so they probably could be used be used anyway. but as you indicated the person wasn't entitled to them anyway and you are merely correcting that problem

if by chance you had 2 plans, one permitting catch ups and the other not, then you clearly violate the universal availability rule. agree you can't correct retroactively, but now I think you have other issues, and I'm not sure how you correct that violation. probably VCP of some type

there is (or at least used to be) at least one investment house that has a deferral source and a catch-up source, for whatever reason, so possibly that is the reason there is a classification of 'catch-up' contributions, even though it makes no sense, because, as noted above, you don't have a catch-up until you hit a limit. but maybe that is what is going on. ugh, always hated getting a takeover case from that investment house, just the extra work involved, especially if they had loans taken from the sources. always glad to switch the investment house at that point.

I don't see how that would be possible, unless perhaps the company had a second plan that permitted catch-up, because of the universal availability rule, and then it would be required to have them. I'm always surprised when I hear a plan not allowing such a feature like this, though I see about 3% still don't (though maybe with restatements this has dropped) How many retirement plans offer this feature? According to the Plan Sponsor Council of America (www.psca.org), 97.1% of all 401k plans permit catch-up contributions. Are we required to provide this additional elective deferral to our plan participants? No, a plan is generally not required to provide for catch-up contributions. If we want to offer the catch-up provision, does our plan have to be amended? There is a high likelihood that your plan will need to be amended in order for you to allow catch-up contributions. The IRS has provided model amendment language that can be used, but you should immediately check with your legal counsel or recordkeeper on what your specific plan needs. http://www.401khelpcenter.com/catch-up_contributions.html#.V4-g6rgrJaQ

one small plan I have is an ESOP so they can't file an SF, simply because they required to file an I due to the assets. but sometimes some former TPAs simply file the same form that was filed in prior years while most embraced the SF because of no attachments.

based on the CPI-U factors, unless there is a drop I have the comp limit increasing to 270,000 and the 415 limit to 54,000 hadn't expected that, but there are 3 months to go and it is close using the current 3 months of ffactors

BG5150 - yes and no you could have, for example, an enhanced match of 100% up to 9% deferred it satisfied ADP safe harbor but the amounts matched above 6% would not satisfy ACP safe harbor so you can run an ACP test on 1. all match or 2. exclude amounts that do not exceed 4% or something like that

many of the newer documents for the safe harbor nonelective simply say something like a. Is this a safe-harbor plan exempt from most testing: i. [ ] No ii. [ ] Yes - safe harbor match iii. [ ] Yes - non-elective contribution, not less than ____% of Compensation iv. [ ] Yes - non-elective contribution, not less than ____% of Compensation but only if the Plan Sponsor amends the Plan and provides a supplemental notice so you could fill in 3% and then provide more or I have seen it worded ....non-elective contribution of at least 3%

if the original document was a standardized document then you would never find an 'opt out' (as noted above the term is 'irrevocable election) because a standardized document has to meet coverage at all times, so you couldn't elect out and thus you would never find such a statement from the person.. that would imply the person elected not to defer which is something different. but then the person would be owed safe harbor contributions unless HCEs were excluded from safe harbor. in fact, I guess, if the original plan was a nonstandardized you couldn't restate to a standardized is something like that was done! but I agree with QDROphile, I don't think there is a such thing as a revocable 'opt out'

without trying to research, does the change even make a difference? according to the ERISA Outline book about the only differences between 3401(a) and W-2 are 1. odd items like non-cash comp for ag labor is excluded from 3401(a) but included in w-2 and 2. excess group term life insurance is included in W-2 but not in 3401(a)

Unfortunately, I would probably corrupt it into a parody based on the old alka-seltzer ad Oh What a relief it is

Austin Tell us how you really feel lol. 777 pages and I find one paragraph (only because of the Cliff notes version) that makes me lose interest in reading anything further.

These revisions, which are being proposed in conjunction with a recompete of the ERISA Filing and Acceptance System (EFAST2) contract, if adopted, generally would apply for plan years beginning on or after January 1, 2019." of course the reason for the delay is so people can make comments like "But I like having to gat an audit for a plan with over 100 people and only 37 have balances" personally I would hope someone with power could get them to at least get this one provision to apply effective "yesterday". I don't think I ever used the word 'recompete', at least not like how it is used here, but I guess this particular change would be far superior than to what we have. and Austin, I think you are understating the impact!

there it is page 62 of the 777 page document - The Agencies are also proposing to change the rules for determining when a plan is exempt from the requirement to include an IQPA report with its filing. In that regard, the Agencies are proposing to add to the Form 5500 a new question, for defined contribution pension plans only, asking for the number of participants with account balances at the beginning of the plan year. Defined contribution pension plans would determine whether they have to file as a large plan and whether they have to attach an IQPA report based on the number of participants with account balances as of the beginning of the plan year, as reported on the face of the Form 5500 or Form 5500-SF. Currently, the IQPA requirement is based on the total number of participants (including those eligible but not participating in a Code section 401(k) or 403(b) plan) at the beginning of the plan year. With the changes in the reporting requirements for small plans (for example, the elimination of the Schedule I), this would minimize burden, but would still provide a picture of the types of investments and fees of small plans (plans with fewer than 100 participants that have an account balance) without requiring them to cover the cost of an audit. For first plan year filings, the plan would have to have fewer than 100 participants with account balances both at the beginning of the plan year and the end of the plan year. "and there was much rejoicing!"

my brief look at the "Readers Digest condensed version" would seem to imply that much of the info pertains to group health plans, which means much of the large version of 777 pages is not applicable, at least to what I do. the biggest highlight I found was the following pertaining to small plans that can't file a 5500-sf: elimination of Sched I forcing you to use sched H Under the proposal, such plans instead would be required to complete Schedule H and the Line 4i Schedules of Assets However: such plans would still be eligible for a waiver of the annual examination and report of an IQPA under 29 CFR 2520.104-46, and the number count required to determine eligibility would be changed from the number of participants at the beginning of the plan year to the number of participants with account balances at the beginning of the plan year. if that rule applies across the board to all plans, that would eliminate audits for a number of plans that have a lot of 4101k plans with non-participants.

some of this stuff you really have to hunt down.... 1.410(b)-5(d)(3)(ii) .....on the basis of plan years ending with or within the same calendar year (but you knew that and was checking to see if I remembered, which I didn't but had to look up again)

this is no different, perhaps, than a person's last paycheck. let's say the person quits Dec 27, 2015 and his final paycheck is in January. he deferred so do you show the deferral in 2015 or 2016? for tax purposes we know the W-2 shows the deferrals in 2016 and most would show the deferrals on the 2016 ADP test as well unless the document specifically uses the 'paycheck received in the last few weeks'

what I understand (and the ERISA Outline Book 6 section VII D.2e6 says "Thus the Value of the Account Balance will include the designated Roth account" so there would be no need to calculate an RMD separately. (If it is a Roth IRA then there is no minimum distribution) so you take Value of the Account Balance and divide by the proper factor and that is the min distribution. I don't think there is a requirement you then have to then pro-rata the amount from Roth and other sources, but obviously the tax consequences are different depending on which sources you take it from.

good luck! the regs say: 1.410(b)-7(d)(5) Two or more plans may not be aggregated and treated as a single plan unless they have the same plan year so for coverage you are not permitted to permissively aggregate so, for example, when looking at the non calendar year plan, everyone else in includable and not benefitting (assuming they have otherwise met eligibility, of course) of course if you aggregate for coverage you would aggregate for nondiscrim testing (e.g. ADP or ACP) and I think that must be one of the reasons why you can't aggregate plans with different plan years. what comps would you use, how would you handle terminees, etc. the exception is the avg ben pct test which includes everything (hopefully you wouldn't need to run this - gives me a headache thinking about it): 1.410(b)-5(ii) (ii) Plans with differing plan years. If not all the plans in the testing group share the same plan year, § 1.410(b)-7(d)(5) would ordinarily prohibit them from being aggregated for purposes of section 410(b). In such a case, employee benefit percentages are determined by applying the rules of paragraph (d)(5)(i) of this section separately to each subset of plans in the testing group that share the same plan year (or the same accrual computation period) and aggregating the results for all plans in the testing group. Thus, an employee's employee benefit percentage is determined as the sum of these separate employee benefit percentages that are determined consistently for all the plans in the testing group (except for differences attributable solely to the differences in plan years).

the concept 'on the date the loan was made' is from the Code. Code Section 72(p)(2)(A) does not exceed the lesser of— (i) $50,000, reduced by the excess (if any) of— (I) the highest outstanding balance of loans from the plan during the 1-year period ending on the day before the date on which such loan was made, over (II) the outstanding balance of loans from the plan on the date on which such loan was made, or (ii) the greater of (I) one-half of the present value of the nonforfeitable accrued benefit of the employee under the plan, or (II) $10,000. now, lets suppose that rule didn't apply. so last week the person took a loan. Friday June 24 the stock market dropped 546 points so no longer at 1/2 the amount, so you start ineligible loan procedures. but Tues and Wed the market has gone up over 500 points so now he has over 1/2 so now it is ok. so do you say the loan was bad or good or when would you say it ineligible because it is too much?

1.414(v)-1(d)(3)(I) Catch-up contributions with respect for the current year are not taken into account for purposes of section 416. however, catch-up contributions for prior years are taken into account for purposes of section 416. thus, catch up contributions for prior years are included in the account balances that are used in determining whether the plan is top-heavy under section 416. so, on the one hand, you say "Yes based on account balances included prior catch up contributions the plan is top heavy. Now, how much did the HCE receive during the year? nothing because it is all catch up

agree, plan would fail coverage if the NHCE actually elected out of the plan. however, if the2 owners are over age 50 and they deferred less than 6000 then oddly enough the plan wouldn't fail ADP testing because the deferrals are treated as catch up, and then the plan wouldn't need top heavy either but that is an odd scenario

well, 1.401(k)-1(b)(4)(iii)(B) last sentence says Similarly, an employer may not aggregate a plan (within the meaning of 1.410(b)-7(b)) using the ADP safe harbor provisions of section 401(k)(12) and another plan that is using the ADP test of section 401(k)(3) so it boils down to the question of "Can I ignore the fact the plan is safe harbor and run the ADP tests, etc if I so desire?" I have seen no guidance on such a situation. My own opinion is the IRS is not out to disqualify plans unless there is a blatant attempt at HCE favoritism. I doubt that would be the case in a controlled group situation at least as a general rule. but I think there are other factors that come into play. everyone in the safe harbor received a 100% vested contribution and that is probably not the case in the other plan. so I imagine even if you could aggregate the plans you end up failing BRF in some way shape or form since you are failing if you don't aggregate the plans. but those are only my thoughts and ramblings and how you fix such a thing - make contributions 100% vested to the other plan as well??? I don't know.

It would probably be better for all if Tom had the 'book' thrown at him instead. you have to put up with his dry humor and everything else but if I have managed to share a little knowledge or useful advice then maybe it balances things out.

agree. I think the IRS response in 1999 is a hard line response "Once $ are in a plan you can't take them out", but since then (especially with self-correction) the IRS has seemed to say "If you aren't entitled to it, get it out and put the plan in a position as if the error didn't occur."