Tom Poje

I heard it was required for any plan with less than.... "one million dollars" so only blame yourself. if you had taken care of Dr Evil we wouldn't have to put up with this. .............. if you didn't notice, there is a thread about this under the 5500 board as well. .................................................................................................................................................. I'm actually not sure what info Janice feels is not going to be simple to obtain. section 4 - is the plan safe harbor or not, does it use current year testing 5 - how does the plan pass coverage 6 date of last amendment /volume submitter / serial number - since we are getting ready to restate, no excuse to not have that info in a good spot 7 applies only if ESOP 8 is plan a us territory 9 amount of contribution deducted - that might be a piece of info I have never requested 10 - unrelated business tax income - I could be wrong, but I would think that applies to very plans 11 how much in service distributions - that would be a change, but I think that is readily available on asset statements

I suppose at least the form says 2015 so it won't be used for 2014 plan years

I'm not so against the concept of the form, but I think it would be better if the DOL would be kind enough to have it as an electronic attachment and ignore the form if they don't want it.

sorry, It's been too many years since I used their system, but I do remember it being very cumbersome, and I had a hard time understanding the notes, so I imagine you are not alone.

so lets suppose your plan is an 8% enhanced match (or any other possibility) question 4b How does the plan pass nondiscrim? I don't see the check box well, for ADP it is safe harbor, but for ACP I use the ACP test question 4c - what happens if you use ADP prior year testing and ACP current year testing (because you have a discretionary match) [no, I don't have any with different testing methods, but you could] question 6a Has the plan been timely amended for all required changes? what is this, a trick question? if you answer 'No' you might as well send it in on florescent paper

so when is this form suppose to be due? the same time as the 5500? item B on the form: EFAST2 acknowledgement so that means this can't be electronic because you don't know that until after you file the 5500. so you file that on 10/15. now what????????? oh, plus you have to have the form signed by the employer. this is begging for problems if they expect all that by 10/15 then I vote the form be called 5500-StUPid or 5500-SUCK

what I should have noted, this works well for calendar year plans - while this will pull the info on all plans, because the date range run is 1/1 - 12/31, the info pulled on non calendar year plans will be incorrect (mainly because I originally wrote the report to be run on a single plan basis) but someday maybe I will get time to make it work on a universal basis as well

for a first year of a plan the regs say you count everything including the profit sharing even if it hasn't been deposited yet.

notes on running minimum distribution globally, and how to compare the results from the report I use with the standard (not crystal report) that is generated by Relius 70 1/2 distribution calculation. and notes on how to get that to pull the correct account balances if you ever wondered why it doesn't! I use my own crystal report (which I have to update every year - mainly for certain dates that I have print) this report is not intended for DB plans. when you run this under report writer it will save a separate file for each plan that it finds a needed min distribution. depending on the size of you database I'd expect it to run about 1/2 - hour to produce and save reports, all in one spot. of course, it is a use at your own risk, but I haven't encountered any problems (as I cross my fingers). generally we run this on a single plan basis each time we run a val, but what the heck, we are getting near the end of the year... notes on how to run global report.doc checking my report with relius report.doc Min Distributions 2014.rpt

I should have added to my comment: since soc sec it taken out up to the taxable wage base, pension plans were permitted to increase the benefit provided to people to 'make up' for this difference. at one time soc sec was at the rate of 5.7%, and it used to be pension plans were tied directly to this %. even though it is now at 6.2% the regs have capped the max excess at 5.7% but the taxable wage base is really only indirectly a plan limit, simply tied to the fact of what happens with soc security. since the CPI factor was released so late in the month this year, ASPPA is probably having them hold things up so they can release the official numbers at the Conference.

actually you are talking about 3 different things. Social Security COLA is based on CPI-W factors Plan Limits are based on CPI-U factors and the taxable wage base is based on the national average wage index so I imagine there are a couple different departments involved. Not sure when the national average wage value is released, but I suspect that limit and the COLA, since they both pertain to social security are one department. the taxable wage base calculation can be found annually at http://www.socialsecurity.gov/OACT/COLA/cbbdet.html but here is the write up they provide at that website Method for determining the base The formula for determining the OASDI contribution and benefit base is set by law. The formula is applicable only if a cost-of-living increase becomes effective for December of the year in which a determination of the base would ordinarily be made. Because there is a cost-of-living increase for December 2014, the formula is applicable. The formula states that the base for any year Y after 1994 is equal to the 1994 base of $60,600 multiplied by the ratio of the national average wage index for year (Y-2) to that for 1992, with the result rounded to the nearest multiple of $300. If the result is less than the current base, the base is not reduced. Base for 2015 Under the above formula, the base for 2015 shall be the 1994 base of $60,600 multiplied by the ratio of the national average wage index for 2013 to that for 1992, or, if larger, the 2014 base of $117,000. If the amount so determined is not a multiple of $300, it is rounded to the nearest multiple of $300. Calculation details Amounts in formula 1994 base $60,600 1992 average wage index 22,935.42 2013 average wage index 44,888.16 Computation $60,600 times 44,888.16 divided by 22,935.42 equals $118,603.56, which rounds to $118,500 Higher amount $118,500 exceeds the base for 2014, so the base for 2015 is $118,500

and I see The Social Security Administration also announced Wednesday that the maximum amount of earnings that workers pay Social Security taxes on will increase from $117,000 to $118,500 in 2015, based on the increase in average wages. here are the values I have for the covered comp covered comp at 118500.xls

at the minimum I'd say you lose your top-heavy free card. if it was two separate plans you could not aggregate (in the regs it is clear you can't aggregate a safe harbor and a non safe harbor, and somewhere it is indicated you have to have the same safe harbor (e.g. you can't aggregate two plans if one is basic match and another 3% SHNEC) but you particular situation in which you only have one plan, I have no idea. good luck.

they just released the CPI-U factor about half hour ago. so for July-Aug-Sept we have 238.250 237.852 238.031 based on the regs this means the limits for next year are (assuming my spreadsheet still works) catch up 6000 deferral 18000 comp 265000 415 limit 53000 db limit 210000 (no change) key 170000 (no change) hce limit 120,000 I'd expect the IRS to release these figures shortly

hmm. let's suppose a family member of an owner in the Dallas office is hired. you would have an HCE eligible to receive a safe harbor before NHCEs who worked the same length of time as those from the Tampa office. that would seem to me to violate the intent of having a free ride on the ADP test.

my understanding is no. catch-ups exist because of a plan limit, etc. The ERISA Outline Book has a small blurb chapter 11 section IX part C the plan may not apply the recharacterization rule first, and then determine how it wants to shift deferrals to produce different testing results

if you have doc language that says each person is in their own group, then I could see going with the profit sharing and picking and choosing people to receive. discretionary does not imply 'pick and choose' so unless the document language is such I'm not sure you can just give to some and not others. you have to follow the terms of the document

you probably don't need to do anything else - assuming it was filed timely everything should be all set. if there was something missing or needs fixing you would be contacted, but it sounds like you are all set.

well....caution (or at least ignoring the following): 1.401(a)(4)-11(g)(3)(iv) corrective amendment supposed to be in place by 10/15 ................... 1.401(a)(4)-11(g)(2) ....may retroactively increase allocations for those who benefited during the year, or may grant allocations to individuals who did not benefit I suppose there is nothing to stop you from provided a profit sharing (e.g. QNEC not used in ADP testing) as well to select NHCEs to bump up the avg ben pct test. depending on how close you are to passing avg ben pct test use comp - deferrals for 414s comp of course, if document has fail safe language it is a moot point as you have to bring people in and no corrective amendment needed. or probably other minor things that could be tried that help

I think the IRS has indicated if it is a required contribution (e.g. safe harbor) then it becomes a gray area. (ASPPA conference a few years ago) otherwise you have a situation in which the person is better to make the contribution late (e.g. 1/1 of the following year under EPCRS and it counts for the 415 limit in the prior year.) it makes no sense that if deposited between 10/15 and 12/31 it counts towards the 415 limit for the following year rather than the year intended. yes, that is what the regs say, but that makes little sense in the case of a required contribution. I can fully understand the issue if it is a discretionary - you are late, there is a price to pay. especially with cross tested plans and you could be bumping the HCEs up big time. In the case of a SHNEC, you aren't late since you have 12 months after the end of the plan year to make the deposit. Again, it simply makes no sense to encourage people to be 'late' and correct using EPCRS after the 12 month deadline. but then again, sometimes the regs make little sense....

supposedly, by checking the box 'one participant plan' on the SF it prevents the form from being viewed - in other words, it treats the SF like an EZ last time I filed one this way it did not show on the DOL website, so at least last time I checked it was working as it was supposed to.... a lot easier to file electronically.

ah, grasshopper, the IRS says the answer is unclear. in this example the person was non key in 2010, but married the owner in 2011. despite the fact she is now an owner in 2011, she is due the top heavy for non-keys, because the determination had already been made the preceding year. By that logic, in your case,the person was a 5% owner in the prior year, so is 'determined to be a 'key' employee. Margaret became a participant in a 401(k) plan in the 2010 plan year, which ends December 31, 2010. For 2010, Margaret did not satisfy any of the key employee tests. The plan is top heavy for 2011 because the top heavy ratio exceeds 60%. The top heavy ratio is computed as of 12/31/2010, which is the determination date for the 2011 plan year. For that calculation, Margaret's account balance as of 12/31/2010 is treated as a non-key employee account balance. During the 2011 plan year, Margaret marries the majority owner of the company. This makes her a more-than-5% owner of the company by attribution. Does Margaret receive a top heavy minimum contribution for the 2011 plan year? Should she have received a top heavy contribution for the 2010 plan year even though the employer didn't fund the contribution until 2011 after Margaret already had married the owner? IRS response. There is no guidance directly on point, but the most reasonable interpretation is that Margaret receives a top-heavy minimum contribution for 2011. For top-heavy purposes, a single determination date is prescribed by IRC § 416(g)(4) for determining both whether the plan is top-heavy and whether an employee is a key or non-key employee. While it would be intuitive to adjust this determination based on events occurring within the year after the determination date, this interpolates a condition that is not in the statute. Note that the House Report (H.R. Rep. No. 107-51) and Conference Committee Report (H.R. Conf. Rep. No. 107-84) accompanying EGTRRA § 613 both provide that the determination date is used for identifying who is a key employee in the following year. 2011 ASPPA Conference #47 responses at such conferences don't necessarily reflect an actual position. some would argue otherwise.

you indicated this year he owns less than 5%. but what about last year?

the example from the regs [Treas. Reg. § 1.411(d)-3(a)(4) examples 3 and 4] Facts. Employer N maintains Plan C, a qualified defined benefit plan under which an employee becomes a participant upon completion of one year of service and is vested in 100 percent of the employer-derived accrued benefit upon completion of five years of service. Plan C provides that a former employee's years of service prior to a break in service will be reinstated upon completion of one year of service after being rehired. Plan C has participants who have fewer than five years of service and who are accordingly zero percent vested in their employer-derived accrued benefits. On December 31, 2007, effective January 1, 2008, Plan C is amended in accordance with Code Section 411(a)(6)(D) to provide that any nonvested participant who has at least five consecutive one-year breaks in service, and whose number of consecutive one-year breaks in service exceeds his or her number of years of service before the breaks, will have his or her pre-break service disregarded in determining vesting under the plan. (ii) Conclusion. Under paragraph (a)(3) of this section, the plan amendment does not satisfy the requirements of this paragraph (a), and thus violates Code Section 411(d)(6), because the amendment places greater restrictions or conditions on the rights, as of January 1, 2008, to section 411(d)(6) protected benefits for participants with fewer than five years of service, by restricting the ability of those participants to receive further vesting protections on benefits accrued as of that date. Employer O's current vesting schedule is 3/20 In January 2006, Employer O acquires Company X, which maintains Plan E, a qualified profit sharing plan under which each employee who has completed five years of service has a nonforfeitable right to 100 percent of the employer-derived accrued benefit. In 2007, Plan E is merged into Plan D. On the effective date for the merger, Plan D is amended to provide that the vesting schedule for participants of Plan E is the seven-year graded vesting schedule of Plan D. In accordance with Code Section 411(a)(10)(A), the plan amendment provides that any participant of Plan E who had completed five years of service prior to the amendment is fully vested. In addition, as required under Code Section 411(a)(10)(B), the amendment provides that any participant in Plan E who has at least three years of service prior to the amendment is permitted to make an irrevocable election to have the vesting of his or her nonforfeitable right to the employer-derived accrued benefit determined under either the five-year cliff vesting schedule or the seven-year graded vesting schedule. Participant G, who has an account balance of $10,000 on the applicable amendment date, is a participant in Plan E with two years of service as of the applicable amendment date. As of the date of the merger, Participant G's nonforfeitable right to G's employer-derived accrued benefit is zero percent under both the seven-year graded vesting schedule of Plan D and the five-year cliff vesting schedule of Plan E. (ii) Conclusion. Under paragraph (a)(3) of this section, the plan amendment does not satisfy the requirements of this paragraph (a) and violates Code Section 411(d)(6), because the amendment places greater restrictions or conditions on the rights to section 411(d)(6) protected benefits with respect to G and any participant who has fewer than five years of service and who elected (or was made subject to) the new vesting schedule. A method of avoiding a section 411(d)(6) violation with respect to account balances attributable to benefits accrued as of the applicable amendment date and earnings thereon would be for Plan D to provide for the vested percentage of G and each other participant in Plan E to be no less than the greater of the vesting percentages under the two vesting schedules (for example, for G and each other participant in Plan E to be 20 percent vested upon completion of three years of service, 40 percent vested upon completion of four years of service, and fully vested upon completion of five years of service) for those account balances and earnings. [Treas. Reg. § 1.411(d)-3(a)(4) examples 3 and 4]

well, the right to continue to participate in a plan isn't a protected benefit, so I don't see why they couldn't be excluded in the current year. I haven't seen it addressed in regards to top heavy, but if someone is no longer an 'eligible' participant I don't see how they would receive top heavy. of course, if the person has worked, for example, 1000 hours, and the only requirement to accrue a benefit is 1000 hours (no last day rule), I don't see how you could exclude them from a current year non top heavy contribution. If the person really doesn't want the 3% he can send it to me and I will take that nasty burden from him, somehow and someway I will manage to get by carrying that weight.