Tom Poje

how late? Technically (yes even if employer error) under EPCRS the only loan 'corrections' available are not under SCP but VCP. see sec 6.07 however, since most loans carry a grace period, if you are within that period I'd agree with the Toolkit.

the regs were amended for 1.401(m)-2(a)(5)(iv). in case you do not have the latest copy, the change is indicated in bold ....by excluding matching contributions with respect to all eligible employees that do not exceed 4 percent (3.5 percent in the case of a plan that satisfies the ADP safe harbor under section 401(k)(13)) of each employee's compensation If I read that word for word there is no mention of applying a 'plan formula' but simply excluding matching contribution that exceed a percent of comp.

I forgot to point out in Report Writer I save the data as a File/excel(Data Only)

you should be following the latest rage of what is required of testing age so whether you drink coffee or beer I think the answer is pretty clear so follow along of that I beg this can be found it's in the reg [1.401(a)(4)-12] Testing age. With respect to an employee, testing age means the age determined for the employee under the following rules: (1) If the plan provides the same uniform normal retirement age for all employees, the employee's testing age is the employee's normal retirement age under the plan. (2) If a plan provides different uniform normal retirement ages for different employees or different groups of employees, the employee's testing age is the employee's latest normal retirement age under any uniform normal retirement age under the plan, regardless of whether that particular uniform normal retirement age actually applies to the employee under the plan. (3) If the plan does not provide a uniform normal retirement age, the employee's testing age is 65. (4) If an employee is beyond the testing age otherwise determined for the employee under paragraphs (1) through (3) of this definition, the employee's testing age is the employee's current age. The rule in the preceding sentence does not apply in the case of a defined benefit plan that fails to satisfy the requirements of §1.401(a)(4)–3(f)(3)(i) (permitting certain increases in benefits that commence after normal retirement age to be disregarded).

I've posted this one before, but maybe someone missed it and might find this useful. (of course, as with any custom report, it's use at your own risk, though a few people indicated it appears to work well) This pulls the data from Relius for importing into FTWilliam SSA govt forms. Has saved me a ton of time. I copy the data from columns A - J and paste it into FT William 8955SampleSSA.csv file. (which I have copied and saved on my computer) on this excel file, the tem data appears (collumn L) which is my own check. if term date is 2010 I'd expect an A as code for people. if before 2010 then a D. In FT William, I complete the following steps: Add form SSA then p2 Return Upload participant CSV file (this is the third choice) and simply choose the 8955SampleSSA.csv for import that I pasted the data into

this was a response at the ASPPA Q and A a few years ago. One must remember that any such respone by the IRS folks does not necessarily represent an actual Traesury postion. Q32) Top heavy: If the client has a shift in ownership such that another company becomes a member of a controlled group of companies and both companies have a calendar year defined contribution plan, what is the procedure for determining the top heavy status for the first plan year the companies are related? For example, Company A had a top heavy ratio of 65% as of 12/31/2005 and would normally give top heavy minimum contributions to its employees as of 12/31/2006. Company B's plan only has a top heavy ratio of 20% as of 12/31/2005 which does not require a top heavy contribution. If the employers became related after 12/31/2005 but before 12/31/2006, would Company A need to give a top heavy contribution if the top heavy ratio of the combined plans as of 12/31/2005 was under 60%? A: Yes. You look to the status at the end of previous year, so A is still top heavy in 2006. 2007 ASPPA Conference #32

based on the numbers the key ee ADP % is 5000/150000 = 3.33% so top heavy is 3% and yes depite the fact it is refunded. If he has already received a refund then it is a little late to be providing a QNEC. If he hadn't received a distribution, then a QNEC of 1.67% to pass testing and a 1.33% profit sharing to cover remainder of top heavy would have worked as well. if the owner also received the QNEC I would have the numbers at 6.33 to 3%, which would still require a refund of 1.33% to pass, but maybe I missed something in your description (or the toolkit mistyped something in his answer)

the basic logic is as follows, a little extra just to see the flow of things 1.401(k)-3(e)(1) - safe harbor must be 12 months 3(e)(2) - first year of plan is an exception to the rule, could be less than 12 months 3(e)(3) plan could be short plan year if year before and year after are 12 months 3(e)(4) final plan year could be less than 12 months if 3(e)(4)(i) plan is terminated, treating the termination "as" a reduction/suspension of matching contributions (in other words, this, as best as anyone has been able to figure, applies to both a safe harbor match or a safe harbor nonelective) in other words, follow the rules of 1.401(k)-3(g) 3(g)(iv) ADP satisfied using current year testing 3(g)(v) plan satisfies safe harbor requirements through the date of amendment (termination) the corresponding reg in regards to a match is 1.401(m)-3(h)(iv) ACP test wil be satisfied 3(h)v) plan satisfies safe harbor requirements through the date of amendment (termination) so based on all that I say the answer is yes to your question.

I'd say no. I think you could A and B and for C split into 2 - otherwise excludable and statutory includable but you want something like A and B and then B otherwise excludable and statutory includable but since B is already in step 1 I don't see how you can use it again.

if I understand your question correctly when testing A you want to aggregate all plans. then when testing B you want to turn around and test it by itself. This would seem to violate 1.410(b)-7(d)(3) Duplicate aggregation which provides the following example Plans A b and C you can have ABC AB and C AC and B BC and A (or A B C)

that is my understanding, you are still suppose to describe vesting and distribution options.

on the other hand, 1.401(a)(4)-2(b)(4)(v) does permit lower allocations for HCEs, 'allocations provided to one or more HCEs' not even all the HCEs, so you can discriminate even amongst the HCEs. I wouldn't push the age issue, though I'd be surprised if you can't figure out another way to impose a limit on the younger HCEs without using age directly. not sure why you basically don't say HCEs can't defer (which means HCEs over age 50 get the catch up). This was in the original preamble to catch up contributions. some argue since that was not in the final regs you can't do it, because if you can't defer you can't get a catch up either. So then other say, fine, all HCEs limited to 1 cent.

I'd have my leanings against such logic. 1.401(a)(4)-11©(2) is pretty specific which schedules are equal. (Comparing the two minimum vesting schedules with no modifications) if you are using logic that says the plan is providing better than the minimum, then would you also hold that a 3 yr cliff is equivalent to 98%/1 99%/2 100%/3yrs

and so the following could occur 2 owners HCE 1 (age 55) 55,000 comp 5,500 deferral 10% ADP HCE 2 (under 50) 55,000 comp 5,500 deferral 10% ADP HCE Avg 10% NHCE avg 6% so plan fails and there would be some catch up for HCE1 and some distrib to HCE 2 if you could count catch up first then HCE1 would be 0% and the avg would have been 5%, and passing.

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out of curiosity, does the doc also contain language 'if the person works 1000 hours in a 12 month period' they are eligibile as well? otherwise you have a problem for someone who works, say 800 hours Jan - May (5 consecutive months) and 800 hours August - Nov (5 consecutive months) yet has worked 1000 hours in a 12 month period. I also recall, for instance, if the plan had a 2 year eligibility (100% vesting) that the years can't be required to be consecutive, so maybe that is the point the auditor is making (though I'm not sure if that argument is applicable).

The IRS publication 6388 for minimum participation (not to be confused with min particpation rules for DB plans) has the following example 1 on page 7 (emphasis mine) A calendar year plan provides that an employee may enter the plan only on the first semi-annual entry date, January 1, or July 1, after satisfying minimum age and service requirements. Employee C, after 10 years of service, separated from service in 1976 with a vested benefit. On February 1, 1990, C returns to employment covered by the plan and completes a 1-year period of service. C must participate either immediately on returning or, after a 1-year period of service, retroactively to February 1, 1990. C's prior service cannot be disregarded because of the vested benefit C had when separating from service. Therefore, the plan may not postpone participation until July 1, 1990. .......... note, it's the fact he had a vested benefit at separation from service, not that he was paid out later

17 years this month! I know I have learned a lot from others' comments, questions and the like.

1.416-1 M-10 Which employees must receive the DC minimum? Those non-key employees who are participants...who have not separated from service by the end of the plan year... ...those excluded from particpation because the comp is less than a stated amount or those excluded because they fail to make mandatory contributions or those excluded from the plan because they fail to defer (this is different than a plan which allows them to particpate but they don't defer, I've never heard of plan excludeding people because they won't defer), must receive top-heavy. so if they are excluded from the plan, they are not participants.

bah. do you think thats the best a 'pilgrim', a 'grinch', etc could come up with? on the other hand, maybe they would be worried about whatever I would be dressed as.

actually the original post made no mention of exactly what was being really being tested, simply a statement the plans couldn't be aggregated because one was safe harbor and the other wasn't, so my response was "true if looking at the 401k portion, but what if you are looking at another portion."

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when you say the "plans can't be aggregated because one is safe harbor and one is not"... raises a question. just what portion of the plan are you talking about? just what 'plan(s) is(are) being tested? by the rules I have to test 401k, 401m and nonelective separately. so now I have 401k for A and 401k for B. since one is safe harbor and the other not, I can't aggregate. but what about the nonelective portion? Even the ERISA Outline Book suggests (8 VII B 3) indicates "the decision to permissively aggregate the 401k arranegement is made independent of the decision to ... aggregate the nonelective portion." In other words, if I am looking at the nonelective portion can I aggreagte (especially since the one is safe harbor Match and is not a safe harbor nonelective)

this possibly begs the questions, but are you testing on an allocation basis (and therefore not really cross testing)? I would thing even at 80% intergration level you would come close enough to passing that providing a little bit more to the group that doesn't include an HCE you would be able to pass.

if the discretionary match is limited to 4% of comp and if the max match is 6% deferral and no eligibility requirements and match rate doesn't increase as deferrals increase. e.g a match could be 66.66% up to 6% deferred because that would produce a match of 4% of comp