Tom Poje

even though I would like to be a Grinch and say you are in deep with violations and stuff, even Code section 408(p)(2)(D) only says Can't be a SIMPLE if "employer maintained a qualified plan with respect to which contributions were made, or benefits were accrued, for service in any year...bleh, bleh, bleh" if no one received anything in the 401k for the year in question, I don't think a violation has occurred. the ERISA Outline book, has an example (chap 12 section V part B1 c 3 "if any elective deferrals were made..." so it appears that the ability to defer is not the driving force, but rather if deferrals were actually made.

Think of the St. Louis gateway arch and just beyond it is the world of cross testing. before you can enter into the land of cross testing, you have to pass under (or provide) the "gateway". now, if you are testing otherwise excludable folks separately, and there are no HCEs in that group, then you don't need to cross test that group, and therefore no gateway is required for that particular group. as for the 2nd part of your question... well probably muddy waters. however, ignoring the issue of gateway for the moment, the IRS has said even though you provide someone a top heavy contribution based on full year's comp, you could use comp from date of participation in testing. I'm not sure that would follow through because for purposes of the safe harbor nonelective you have an entry date different than for other nonelective contributions. I would hold in that case you have to use the earlier of the two entry dates. This is different than having a 7/1 entry date but using comp based on full year because you don't have another entry date.

just for grins (since you indicated "Nothing in the plan's provisions calls for any decision about whether a participant is disabled." I tried looking in some of the documents we have. they all seem to at least partially address the issue (which seems to correspond closely to mastiff comments)... FT William Definition of Disability a. [ ] Under Code section 22(e). The Participant is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months. The permanence and degree of such impairment shall be supported by medical evidence. b. [ ] Under the Social Security Act. The determination by the Social Security Administration that the Participant is eligible to receive disability benefits under the Social Security Act. c. [ ] Inability to engage in comparable occupation. The Participant suffers from a physical or mental impairment that results in his inability to engage in any occupation comparable to that in which the Participant was engaged at the time of his disability. The permanence and degree of such impairment shall be supported by medical evidence. d. [ ] Pursuant to other Company Disability Plan. The Participant is eligible to receive benefits under a Company-sponsored disability plan. e. [ ] Under uniform rules established by the Plan Administrator. The Participant is mentally or physically disabled under a written non-discriminatory policy. f. [ ] Other: NOTE: If A.21f is selected, provide the definition of Disability. The definition provided must be objectively determinable and may not be specified in a manner that is subject to discretion. Accudraft 1.1 Disability. The term Disability means a physical or mental impairment arising after an Employee has become a Participant which, in the opinion of the Social Security Administration, qualifies the Participant for disability benefits under the Social Security Act in effect on the date that the Participant suffers the mental or physical impairment. Corbel 1.80 "Total and Permanent Disability" means the inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than twelve (12) months. The disability of a Participant shall be determined by a licensed physician. However, if the condition constitutes total disability under the federal Social Security Acts, the Administrator may rely upon such determination that the Participant is Totally and Permanently Disabled for the purposes of this Plan. The determination shall be applied uniformly to all Participants. Fidelity 11.03. Disability Retirement. If so provided by the Employer in Subsection 1.14© of the Adoption Agreement, a Participant who becomes disabled while employed as an Employee shall have a 100 percent vested interest in his Account regardless of any vesting schedule elected in Section 1.16 of the Adoption Agreement. An Employee is considered disabled if he satisfies any of the requirements for disability retirement selected by the Employer in Section 1.15 of the Adoption Agreement and terminates his employment with the Employer. Such termination of employment is referred to as a disability retirement.

last posted a few years ago, but here it is again 130 songs to identify by a picture. simply type in the number of the song in the yellow boxes. the song list is included on the spreadsheet the first song is already solved as an example. christmas puzzles- 130 to solve .xls

In fine Grinch fashion I am reposting this. (First posted in 2002 - Silver was only 4.50 back then so I had to update that)) Bah, humbug, this is worse than I thought, but that has no effect on my little heart.. ......................................................................................... This is a very bad joke. The punch line is going to hurt. What is really sad is I drag it out so long. I wouldn't be surprised if Dave Baker kicks me off for this one. Exit now before it is too late. Ok. You were warned. Our story takes place in Russia, back in the good old days, before the glorious revolution, before there was talk of ‘proletariat’ and ‘bourgeoisie’ and other terms I have no idea how to spell. And it concerns a certain Rudy Rudovich, who lived in one of the small villages that surrounded Moscow. Rudy was a poor dirt farmer. That is being kind, perhaps in a good year he had a bumper crop of ‘dirt’. You see, Rudy was missing a few screws, so to speak. And our hero was quite the hen-pecked husband. Once when I was telling this joke someone stopped me and said I shouldn’t be redundant. Hen-pecked and husband go without saying. Now, I have to take the individual’s word for it. I have never been married, and as I am in my mid 40’s maybe I will never find that out. Well, anyway, it was “We need more firewood, Rudy” and all he could reply was “Yes, dear.” Or “Are you done with the dishes?” “I will get to them as soon as I finish the sweeping, dear”. Poor Rudy. Day after day. Month after month. Year after year. If I had more time, I would explain where the term ‘hen-pecked’ comes from. But that is another bad joke, and it’s Christmas, and having you hear one bad joke is unkind enough for the season. One spring day, the sky was dark and threatening. But it was mid-April, and Rudy always sowed the seeds that day, and he wasn’t about to break his pattern. His wife had invited some ladies over. They were playing bridge, and drinking tea, and eating cupcakes with frosting on them. You know, the ones cutely decorated with those little round silver candies on top. Yeh, I thought you knew. Well, Rudy grabbed his seed pouch and headed out the door. Oh, maybe some of you don’t know. Those little silver candies are called dragees. You can get about 2 ounces of them for a couple of bucks. Well, maybe if they are on sale you can get them cheaper, but they are not that expensive. And you get so many of them, I don’t think they would ever sell them in bulk. Did you ever read the label on them? It says ‘Use only as a decoration’ and ‘Non-edible’. I’m not kidding. That’s why they make them out of sugar so kids won’t eat them. Yeh, right. But seriously, look at the ingredients: Sugar, corn starch, gelatin, acetic acid and silver. Honest. They actually use silver in making these. That’s why you aren’t suppose to eat them. You could get silver poisoning. Oooohhh. A plot for a muder mystery. Slowly poison someone by…oh, that’s another story. Anyway, do the math, silver sells for around $13.50 an ounce and you purchased 2 ounces of these things for a couple of bucks. There must be enough silver in these things to, hmmm. And that would be if you ate the whole container of them. Guess I wouldn’t lose sleep over whether you ate any or not. Ok, see you learned something new, so maybe it was worth reading this far. Now leave before you get to the punch line because it is going to hurt. Where was I? Oh yeah, Rudy was going out the door to plant the crop. About 5 minutes later there was a clap of thunder, and the skies burst forth with a torrential downpour. Of course, one of the ladies blurted out “Guess it won’t be long before your husband comes back, huh?” to which his wife replied “Rudy? That idiot hasn’t got enough sense to come in out of the rain” And so it was true. One hour, two hour, all morning rain, rain and more rain. And still Rudy had not returned. Finally, about lunch time Rudy swung open the door, soaking wet. The ladies looked up at this somewhat pathetic looking figure, but rather than express any words of comfort or sympathy, there was nothing but giggles. And then his wife let into him. “Don’t you dare track mud in the house” “Yes, dear” “And don’t you dare hang your wet things over the furniture” “I won’t. dear” “Rudy, I swear, I don’t think you even know what rain is, do you?” “Guess I don’t dear” Looks like it’s gonna be another banner year for the dirt farmer! So spring passed by, summer followed. One Wednesday evening, about 7 there was a knock at the door. Rudy’s wife looked up from her book and shouted “There is someone at the door” “I’ll get it, dear” Rudy said, emerging from the kitchen, soapy hands, apron and all. He opened the door, and standing there 6 individuals – members of the newly formed communist party. They had a very good sales pitch. “Be a Red, or be dead”. A convincing argument, especially when accompanied by the guns they brandished. They wanted Rudy to go their meeting that night, and, though he wasn’t the brightest, Rudy knew it was in his best interest to go. He had started to walk out the door when that old familiar voice resounded “Not until you finish the dishes, mister” Rudy returned to the kitchen “Of course dear. How silly of me” One of the communists took a step in and said “Listen lady…” but that was as far as he got. “Excuse me. Did I invite you in?” Wisely, he took a step back. Perhaps the world of events might have been different if there were more Mrs. Rudovich’s! It took Rudy about 5 minutes to finish his chore and off he went. Secretly, his wife was glad. She put her book down, got up from her chair, went over to the bookcase, and behind the third book on the middle shelf pulled out a chocolate bar. The Wednesday night meetings went on for about two months. (By the way, I could have picked any night of the week, it has nothing to do with the joke if you are trying to figure out where this is headed. I will warn you again to give up on this one, it will save you a big groan at the end.) After about two months, the communists (or Reds, if you will) decided they weren’t making much progress with Rudy. They convinced him he would best serve the party by simply growing food – they would handle the nasty end of things. They even managed to convince him it wasn’t a good idea to plant in the rain, as the seeds washed away. And to top things off, they gave him a red bandana to wear. “Remember Rudy, be a Red or be dead” Wear it for your health. Rudy was only to happy to comply. Fall came and went, followed by winter. Rudy put up a Christmas tree (well, this is a Christmas joke, I have to fit Christmas in somewhere). It was one of the few times of the year there was peace in the house. Ok already, the rest of the year his wife gave him a piece of her mind. But that’s not the punch line I have been warning you about. It is coming. Beware! Spring came at last. And it was almost like déjà vu. Threatening skies. The wife had the ladies over for bridge. There were iced cupcakes, but no silver candies on top this year. No, not because they were worried about the warning labels, but simply because Rudy’s wife was on a diet. Rudy headed out the door armed with his seed bag. And just like last year the skies opened up. Terrible rainstorm. Of course the ladies started in with some nasty remarks, remembering last year’s fiasco. Finally, to climax the snide remarks Rudy’s wife said “I told you that dolt doesn’t know what rain is” And at that moment, the door swung open, and banged against the wall. Now Rudy’s wife was sitting in the chair with her back to the door. She didn’t know Rudy was dry – he had been standing under the eves on the porch rather than being out in the garden. The other ladies were somewhat speechless, so his wife, bidding 2 hearts, added “Don’t track mud in the house” “Not muddy dear” Rudy replied. “Well don’t drip water all over the place” “Not wet dear” came the reply. “Look, Mister. Don’t get wise with me. I know you don’t have enough sense to come in out of the rain. Like I was telling my friends, you don’t even know what rain is. Just what have you got to say for yourself?” And turning, her jaw dropped as she saw her husband standing there, dry and clean. And the Rudy, waving that red bandana the communists had given him simply said “Rudolf the Red knows rain ….dear” I warned you it was bad.

but then of course, I'm sure the following rule probably applies It's not my job to run the train, The whistle I don't blow. It's not my job to say how far The train's supposed to go. I'm not allowed to pull the brake, Or even ring the bell. But let the damn thing leave the track And see who catches hell!

first, if the person shouldn't have entered, under EPCRS an amendment could be made to provide eligibility for this person (and just this person) whether you have to submit for a determination letter is unclear.( since the IRS has curtailed the determination letter program) .............. since you provided a long question here is an even longer answer. (The Grinch) This is the explanation from an Accudraft document of a few years ago. I believe this is the situation to which you are referring (g) Reemployment of an Employee After a Break In Service and Before the Entry Date. For any Plan Year in which the eligibility requirements in Section 2.1 are based on Years of Service, if an Employee Terminates Employment with the Employer either prior to or after satisfying the eligibility requirements in Section 2.1 (but before the Employee's Entry Date in Section 2.1) and the Employee is subsequently reemployed by the Employer after incurring a Break in Service, then the Employee's Years of Service that were completed prior to the Break in Service will be recognized, subject to the following provisions: (1) Determination of Years of Service for Eligibility Using the Rule of Parity. The following provisions apply to determining Years of Service for eligibility purposes: (A) One Year Holdout Rule. Any Years of Service completed prior to an Employee's Break(s) in Service will not be counted in determining an Employee's eligibility to participate in the Plan until the Employee satisfies the One Year Holdout Rule. If the Employee has not satisfied the eligibility requirements in Section 2.1 as of the Employee's Reemployment Commencement Date and then satisfies the One Year Holdout Rule, then the Employee will become a Participant in the Plan as of the Entry Date in Section 2.1 after the Employee has satisfied the eligibility requirements in Section 2.1 (including, if applicable, an Entry Date that may occur during the One Year Holdout Rule period after the Employee's Reemployment Commencement Date). If the Employee has satisfied the eligibility requirements in Section 2.1 as of the Employee's Reemployment Commencement Date and then satisfies the One Year Holdout Rule, the reemployed Employee will enter the Plan as of the first day of the Eligibility Computation Period in which the Employee completes one Year of Service. Furthermore, the recognition of any Years of Service completed prior to an Employee's Break(s) in Service will be subject to both the One Year Holdout Rule and the Rule of Parity. (B) Rule of Parity. Any Years of Service completed prior to an Employee's Break(s) in Service will not be counted in determining an Employee's eligibility to participate in the Plan if those Year(s) of Service are disregarded pursuant to the Rule of Parity. If such former Employee's Year(s) of Service are disregarded under the Rule of Parity, then (A) the reemployed Employee will be treated as a new Employee for purposes of Section 2.1 and (B) the Employee's Eligibility Computation Period will commence on the Employee's Reemployment Commencement Date and subsequent Eligibility Computation Periods will be based upon the provisions of the definition of Eligibility Computation Period (with the Reemployment Commencement Date substituted for the Employment Commencement Date, if applicable). If the Employee has not satisfied the eligibility requirements in Section 2.1 as of the Employee's Reemployment Commencement Date and such former Employee's Year(s) of Service are not disregarded under the Rule of Parity, then the Eligibility Computation Periods will remain unchanged. If the Employee has satisfied the eligibility requirements in Section 2.1 as of the Employee's Reemployment Commencement Date and such former Employee's Year(s) of Service are not disregarded under the Rule of Parity, the reemployed Employee will enter the Plan as of the Employee's Reemployment Commencement Date.

perhaps somewhat similar, from 2007 Q and A Q19) Safe Harbor 401(k): A notice is issued indicating a safe harbor contribution will be made for the upcoming year, but the plan was never amended to contain safe harbor language. Now that it is after plan year end, it is too late to amend to correct the problem. Is the plan on the hook for the contribution, and must also run all appropriate tests? A: Notwithstanding the notice provided, the plan terms do not provide for the safe harbor plan. Therefore, you should follow the plan terms and run the ADP test as needed. (Whether there is a Title I issue due to the notice is in the purview of the DOL.) ........ so since the contribution is discretionary, not making one is still following the terms of the document. were the participants informed of the board's decision to make a contribution? possibly the answer is similar to the above, that there may be an issue with the DOL, in your particular case, arguably, the board has reviewed the situation and rescinded its earlier decision to make a contribution, which also seems possible.

not sure what other documents may say, but the FT William document has the following language in the checklist: NOTE: If D.18f or D.18g is selected, the amount allocated to one group need not bear any relationship to amounts allocated to any other group. The Company shall also notify the Plan Administrator in writing of the amount of contributions allocated to each group by no later than the due date of the Company's tax return for the year to which the contribution relates. .......... I suppose it is a bigger issue if the $ are pooled, how in the heck do you simply say "Contribution for 2015 is $100,000" without some sort of tracking.

the version I heard was If a man walks alone in a forest is he still wrong?

1.410(b)-7© requires 401(k) and 401(m) to be treated as separate 'plans' so looking at the match feature as a separate plan you have 1.410(b)-(6)(f) (i) employee does not benefit (ii)employee is eligible to participate in the plan [so you have to include someone who otherwise would be eligible due to 1 year/age 21 if they were a member of a controlled group but could not participate) (iii)plan has minimum svc or last day requirement (iv)employee fails to accrue a benefit due to (iii) (v)employee terminates with no more than 500 hours (vi) if this section (f) is applied to one person it is applied to all employees. [in other words, this is optional, there is nothing to prevent you from including all terminees with less than 501 hours who don't benefit. so ignore this rule if you HCEs who fall into this category and it might help] the one exception I can think of is if the plan allowed after-tax contribution, since anyone can make an after tax no matter how many hours, and after tax contributions are include in 401(m) so short answer is 'yes' can be excluded unless you didn't provide all the info....

as you pointed out, the only thing in the regs that speaks of excess being included in the test pertains to HCES and excess deferrals. since the individual was not entitled to the match I would not include it in testing. It is simply a mistake in fact.

so lets say you aggregate the plans. in you original example under the 403b the HCEs get 200% of the first 5% the NHCE get something less than that in the 401k. how does BRF for the match pass?

if plan year begins 2015 then the limit should be pro rata for the 2015 year, not the 2014 year (so I would use 1/2 the 265,000 limit. it shouldn't matter if it is the initial year. If I had a calendar year plan and amended to a short year beginning in 2015 the results should be the same.

the IRS has provided the following Q and A for the compliance question. e.g. what if plan uses current year testing for ADP and prior year for ACP testing? Frequently Asked Questions Regarding the IRS Compliance Questions on the 2015 Form 5500.doc

the notice requirement is deemed satisfied if provided 30 to 90 days before plan year begins. that is, people are considered to have ample time to make an informed decision and no one, including the IRS can say they didn't have a 'proper' chance to make an informed decision. does that prevent you from providing a notice less than 30 days? no, it simply means you don't have a 'guarantee' if someone complains they didn't have ample time to make a proper decision. If the plan has a 3% SHNEC it is less of an issue since it doesn't really matter how much one defers. might be more of an issue if there is a match. (note: when asked how to correct. the IRS has responded in such a fashion when asked what happens if no notice has been provided.) so I would issue a new notice ASAP and go from there

2015 Instructions for Form 5500-SF Short Form Annual Return/Report of Small Employee Benefit Plan Code section references are to the Internal Revenue Code unless otherwise noted. ERISA refers to the Employee Retirement Income Security Act of 1974. Changes to Note IRS Electronic Filing Requirements. On September 29, 2014, the Treasury Department issued final regulations under sections 6058 and 6059 of the Code providing that certain filers must electronically file the Form 5500 series returns/reports (including actuarial schedules). (See T.D. 9695, 79 FR 58256 at http://federalregister.gov/a/2014-23161). Under the regulations you are required to file a Form 5500 series return/report electronically if you are required to file at least 250 returns of all types during the calendar year that includes the first day of the applicable plan year. Because the IRS may now require certain filers to electronically file the Form 5500 series returns/reports, the IRS is adding questions to the Form 5500 and its Schedules relating solely to IRS compliance issues. However, these new IRS compliance questions are optional for the 2015 plan year. IRS Compliance Questions. New Lines 10j, 14c, 14d, and new Part IX (IRS Compliance Questions) were added to this Form for purposes of satisfying the reporting requirements of section 6058 of the Code. These IRS compliance questions are critical to the IRS to effectively focus on specific factors and issues of the Federal tax law compliance. Although these questions are optional for the 2015 plan year, the IRS strongly encourages filers to answer these questions. .................................................................... looks the IRS is not all that happy this is optional for the upcoming year

oh well.... Congress Repeals Automatic 3-1/2 Month Extension for Form 5500 "The conference agreement repeals the provision in the Surface Transportation and Veterans Health Care Choice Improvement Act of 2015 that provides for an automatic 3-1/2 month extension of the due date for filing Form 5500 [which would have applied to plan years beginning in 2016]. Thus, the extended due date for Form 5500 is determined under DOL and IRS rules as in effect before enactment of the Surface Transportation and Veterans Health Care Choice Improvement Act of 2015." [The Form 5500 provision is discussed at pp. 536-38 of the 555-page conference report. The conference report was agreed upon on December 3, 2015. It has not yet been signed into law by President Obama.] (114th Congress)

I had one plan that had last day of plan year was the entry date. as I recall, no eligibility. so someone hired during the year and terminated during that year would not enter, but everyone else would and that would certainly pass min participation of 401(a)(4)

and I guess if you don't know about the IRS shutting things and you have something due then the IRS comment about filing prior to the scheduled update is not much help. I wouldn't know about it if it wasn't for this particular post.

well it becomes a moot point. if only the non key employees receive a top heavy minimum, then the 401(a) portion of the plan benefits no HCEs and you get a free ride on coverage for that portion of the plan. of course, if you were to run the test, you would pass anyway. assuming the HCE is a key employee, then top heavy is required at whatever % the HCE deferred, capped at 3%

'required aggregation' is a term generally used to refer to top heavy testing. yes, it is true, if you have a controlled group, all employees are treated as being employed by one employer, so in that sense, all employees are aggregated (e.g. for coverage all show in the denominator) but that does not require you to aggregate the plans.In fact if plans had different plan years the regs forbid aggregation (1.410(b)-7(d)(5)). or if one plan was safe harbor and the other plan non safe harbor you can not aggregate for ADP testing (1.401(k)-1(a)(4)(iii)(B)) - or for that matter, you can't 'aggregate' deferrals with non deferrals. but unless there is something else going on, generally you can permissively aggregate the plans. of course, for purposes of average benefits percentage test all contributions are aggregated.

of course any new loans could be denied as 'bad credit risk' since the prior loan was defaulted. This is not supposed to be a workaround to get distributions from a plan while still active. In addition, though not necessarily applicable in this scenario, despite the default, the loan still 'exists' and continues to accrue interest, so could limit the amount of any future loan

to be consistent, you have to use the same definition. the software I use when running the ADP test in 2014 would show the 2014 comp for the NHCEs on the report but the testing would be based on the 2013 values stored in memory because you are using the prior year testing. in other words, the 2014 listing of NHCEs on the ADP test is not used for 2014, but would be used for 2015 if nothing else changed. if you are going to switch to using full comp you have to redo the NHCEs values to determine what to use for the 2015 testing. of course, if you go back to 2014 and rerun things using total comp, you don't rerun the 2014 test because that was completed, but now at least you have the correct values for 2015 testing for the 2014 NHCEs prior results.

from the 2010 ASPPA Conference, page 4 (sorry the Q and As were not numbered that year) Q: An employer had a safe harbor election for the plan year 2008. The plan and company both operate on a calendar year. The plan is a trustee directed, balance forward plan. The required 3% contribution was, say, $15,000. Employer does not go on extension; employer puts the $15,000 into the plan in September of 2009. The contribution is not deductible for 2008 (they'll deduct it in 2009). However, under Section 415, it is not an annual addition for 2008, since it was not contributed within 30 days of the tax deadline. However, it is SUPPOSED to go in for 2008 and be allocated for 2008. Is there a failure to provide the safe harbor contribution for 2008? If so, how to correct? (Note, this could also be an issue anytime a QNEC needed to pass ADP or ACP testing is deposited more than 30 days after the tax return due date but within the 12 month correction period under IRC 401(k).) What if the deposit is not made until after 12/31/09 - that is, more than year after the plan year end to which it applies? IRS Response 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©-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.] ............. Basically I think the IRS representatives were saying if it is a required contribution it is probably reasonable to apply the 415 to the year required, no matter when deposited. Otherwise, you would simply wait until after 12/31 and make the deposit and then you would be ok. this logic of course in many ways makes little sense. If the contribution is discretionary I think you have problems because of the timing.