Tom Poje

no no no. I don't think so. at least as far as I recall. the special rule for HCEs is only applicable to the ADP test, not to coverage. or at least that is what was beaten into me from some meeting or otherwise. while that may not seem logical, it is the regs we are talking so logic doesn't necessarily apply.

arguably no. at least that doesn't appear to be the intent, based on the IRS website's Q and A. http://www.irs.gov/Retirement-Plans/Retire...oth-Accounts#17 Designated Roth Contribution #15 If an employer offers designated Roth contributions to one participant in a 403(b) plan, must the employer offer them to all other participants in the plan? Yes. Under the universal availability requirement of §403(b)(12), if any employee is given the opportunity to designate §403(b) elective deferrals as designated Roth contributions, then all employees must be given that right. based on your statement, someone who makes regular deferrals could make Roth deferrals, and that would seem to violate the universal requirement. 403b provider: well we offer both, you just can't choose both. #11 Can a plan offer only designated Roth contributions? No, in order to provide for designated Roth contributions, a plan must also offer traditional, pre-tax elective contributions. 403b provider: but we don't just offer Roth, we have both, you can't chose both at the same time. #2 Can I make both pre-tax elective and designated Roth contributions in the same year? Yes, you can contribute to both a designated Roth account and a traditional, pre-tax account in the same year in any proportion you choose. your 403b sponsor: no you can't. it is either one or the other.

you might want to check the following articles (of course, if it is on the internet we know its true!) http://financialducksinarow.com/2707/rolli...k-to-avoid-rmd/ or under the section 'longer tax deferral' found here: http://money.usnews.com/money/articles/201...nown-401k-perks

that is what the book seems to say at least in the examples you pointed out.

ok, that was unclear from your original post. in that case, it sounds like you are going to have to do a corrective amendment to bring some NHCEs into the plan and provide a QNEC, ceratinly enough to get above the 20% threshold.

well, of course, the IRS frowns upon a category 'part time employee', and this perhaps is a great example of why. one question is what is the plan's definition of YOS? usually this is a 12 month period. Or put another way, if that is what the document says, then just because one has worked 1000 hours, they don't receive credit for a year of svc until the close of the 12 month period. and if that is the case, and there is a 1 yos requirement for safe harbor, then arguably this person failed that. See example ERISA Outline book chapter 2 section III part B.3

according to the ERISA Outline book, this was a valid question at one time, but went away in 2002, because IRC 416(i) as amended by EGTRRA 613 determines a 5% owner by looking at ownership for the plan year. Chapter 6, Part B.1.d page 6.412.

well, certainly the regs say the notice must be provided timely so someone could make an infomed decision as to whether to defer or not. so can you provide a notice with less than 30 days? From the comments I heard (though some accuse me of selected hearing), the answer would generally be yes (facts and circumstances), and its less of a problem with a SHNEC rather than a SHMAC. In fact, in the case of a new plan, the regs even indicate the notice could be provided no later than the date the employee first becomes eligible. so I think you still have some leeway. Arguably the client could decide not to even have a plan - since it hasn't even started it doesn't exist so I don't see how you could have any funding requirement. Perhaps instead amend to a 'maybe' safe harbor as a middle ground?

if you look up one of the song titles you would find out the following: This song was featured in "Christmas Vacation" and was written by R. Alex Anderson. Mele Kalikimaka is the thing to say on a bright Hawaiian Christmas day. ....................... 4 of the black and white pictures have a small paint can - an implication there must be a color involved.

the reg cite is 1.401(k)-3(h)(2) a shnec...may also be taken into account for purposes of determining whether a plan satisfies section 401(a)(4) (You can not impute disparity on the safe harbor portion [since you can't integrate a safe harbor contribution], so for example, if the plan was tested on an allocation basis with imputing disparity you would have 3% shnec + 1.4% ps + 1.4% disparity (not 4.4% disparity))

well, every plan that has a safe harbor basic match has the same issue. I think the general logic is that someone who makes more $ is able to defer more $. therefore capping the match at a % of comp somewhat levels the field. That is not the case in your example. but how many people making 60000 can afford to defer 16.666%? in the old days if you failed the ADP test, the HCE who deferred the largest % got socked with the refund. this penalized the HCE who made, for instance only 110,000 and deferred 10% (11,000), trying to put away as much as possible, as oppossed to the HCE who made 250000 and deferred 17000 or 6.8%. again, in the old days, the person deferring 10% had the refund. but he only deferred 11,000 and the person who deferred 17000 had no refund. now its the one who defers the largest $ amount. is that any more fair or unfair? but arguably today, the person who deferred 6.8% is penalized because in reality he deferred a smaller %.

1. Rollovers are generally not included unless they are related $. Just where did the IRA come from? you said it was a previous employer, so that shouldn't have any effect on the test. its unrelated $ 2. You indicated an HCE did the rollover. There is a difference between 'key' and 'hce'. lets make sure we use terms correctly.

since I can't stop Christmas from coming, I can at least stop people from getting their work done by getting sidetracked. Though I am willing to provide hints. 49 is kind of clever, involves homophones (2 words that sound the same but are spelled differently

1.401(a)(4)-8(b)(1)(vi)(A) = 1/3 the allocation rate. there is no 'comp' specified here, so its 414(s) comp 1.401(a)(4)-8(b)(1)(vi)(B) = deemed satisifed if 5% of 415 comp, measured over a period of time permitted under the definition of plan year comp.(e.g. could be from date of entry) of course if the plan is top heavy, then you would have to receive at least 3% of total 415 comp, not just from date of entry.

you use all nonelective contributions in the a(4) test. this would be no different than adding a corrective amendment to allocate additional amounts to the NHCE.

1.401(m)-2(a)(5)(iv) you can test all match in the ACP or exclude matches that do not exceed 4% of comp. (assuming the match satisfies the ADP safe harbor as well) for QACA the 4% is reduced to 3 1/2 %

the Grinch is reposting the Christmas Song Quiz. 130 pictures to identify the song. the song list is on the second page on the excel file. simply type in the number of the song. the first song is already answered. the individual who has created most of these has actually increased the number to 150, but then also increased the song list. his website is indicated on the excel sheet. maybe someday I will redo this puzzle to include the additional 20. He did say it was ok to post these. christmas_puzzles__130_to_solve.xls

I would think that 1.410(b)-7(d)(5) applies that says 2 or more plans may not be aggreagted amd treated as a single plan unless they have the same plan year. 1.410(b)-5(d)(5)(ii) indicates if aggregating for purposes of avg ben pct test only, you calculate the benefit % separatey to each subset of plans in the group, and then aggregate the results.

a notice is deemed to be issued within a 'reasonable' period if provided at least 30 days before the beginning of the year. 1.401(k)-3(d)(3) Therefore, it is possible a notice could be issued later, you simply don't get the guarantee of 'yes, you did it soon enough' if it's a 3% SHNCE it is less of a problem because one gets that whether one defers or not. arguably, someone could approach the DOL and say "I wasn't given the notice timely to make an informed decision. I know I need to save for reiterement, but if I had known I was going to get 3% automatically, I would have stopped deferring and used my $ elsewhere"

under the 414(q) rules to determine if someone averages 17 1/2 hours a week you have the following: Employee work 20 hours a week for 25 weeks (fall and winter), 10 hours a week for 12 weeks (the spring) and is off during the summer. (Great job!) The employee is treated as having average 17 ½ hours a week because periods not worked are not considered. Treas. Reg. § 1.414(q)-1T Q9(e)(1) granted that is for determination of the body count for top paid group election, but....

this also assumes the document indicates match can be used for top heavy. arguably this is possible. internally when the partipants get together for their cigarette break and one says "cool. I received a 5% profit sharing, what did you get" and the other says nothing, grumbling under his breath "I only received a 4% match, what's up with that" but yes, becuase of the way the regs currently read that would be possible. remember, for coverage (not nondiscrim) 1.410(b)-4(b) Reasonable classification test....an enumeration by name or other specific criteria having substantially the same effect as enumeration by name is NOT considered reasonable. so you have to pass coverage using the ratio percentage test

consider the case of a non-merged plan: a plan could have a safe harbor match for ADP purposes. Those matches are considered a type of QMAC. Thus, the vesting for these has nothing to do with discretionary matches. they are always 100% vested. a plan could also have a safe harbor match for ACP purposes. Those matches could be subject to a vesting schedule. If, for whatever reason, those matches were 100% vested per terms of the document, then anyone who has 3 years svc would get their choice of vesting schedules if the company decided to change vesting schedules. in other words, the ADP safe harbor match is considered to be a sepearte 'source' than a discretionary match, thus the 100% vesting doesn't carry over 'protected' if that is a good term.

after looking at it some more, I'm going to tell the boss I won't do it unless its a fresh start. It's just not worth the grief. I thought all target plans disappeared, especially since you can cross test, though if the govt follows up with their threat to cut everything back maybe they will reappear. Oddly enough, I have actually seen a few target plans in the last few years. one was terminating. another was a strange 'prospective' val that I told the back office client to run far away from, not worth taking over a case like that. I didn't even think you could run a target on a prospective basis. won't even discuss the issue of how the normal retirement date in document wasn't worded quite what was intended, I don't even want to know how the prior admin was running the thing. oooohhh. just the thought of what I saw sends shivers down my spine.

ok, inherited a target benefit that goes way way back, with an unconventioanl formula. they want to go safe harbor target, so I know enough I have to create a theoretical serve. But if someone could translate what the govt indicates into something I can understand it would greatly help. (e.g. so if the benefit through the new formula is $1000, and the interest rate is 7.5% and the person has 9 years to retirement then.... (The theoretical reserve for the first plan year following any plan year in which the plan failed to satisfy this safe harbor is also zero. However, if the plan was adopted and in effect on September 19, 1991, and met the qualification requirements for target benefit plans under prior law, it may be allowed to take into account years of service for years in which this safe harbor was not met. In this case, the theoretical reserve as of the determination date for the last year before the plan satisfies this safe harbor is the excess, if any, of the actuarial present value of the stated benefit the employee is projected to have at NRA over the actuarial present value of future employee contributions required through NRA.)

I think he does have comp during the plan year because it runs from 5/1/11 - 4/30/12 so he would have had comp from 5/1/11 - 10/21/11 (and we won't get into the argument of comp on 4/30/12 - I suppose if his last paycheck was dated 4/30/12 then he might have 1 day of comp) If an allocation is based on comp from date of participation then I would agree I don't see him having any comp for allocation purposes, but unless you have some really good software and running the plan monthly or something it wouldn't surprise me if the software doesn't have a correct comp. Of course, if the plan is top-heavy and there were allocations besides safe harbor then he is due a contribution based on full year comp anyway. I suppose even stranger if he was the only NHCE then you would have someone who has entered the plan with no comp for 'allocation' purposes, so receives nothing, and you fail coverage. bizarre.