AdKu

The expense ratio of an Investment is 1.00% as advertised on the Investment prospects. The detail fee structure of the expense ratio is that 0.60% is allocated to Revenue Retained by Investment Provider, and the rest of the expense ratio is paid out as Revenue Sharing to Record keeper/TPA. Assuming the only service provider fee (Indirect Compensation) for the Investment in discussion is the expense ratio (EIC) that is advertised on the Investment prospectus, is this permissible to use the alternative reporting method and exclude the Record Keeper/TPA from being reported Part I Section 2 and Section 3 of Schedule C (Form 5500). My careful reading of the 2016 Instructions for Schedule C (Form 5500) Service Provider Information did not help me to be 100% sure to exclude the Record Keeper/TPA from being reported Part I Section 2 and Section 3 of Schedule C (Form 5500). Thank you for all your help. AdKu

The intent is to check if there is a possibility under the the regulation to terminate the plan and make the benefit distribution before the end of the 2017 plan year to avoid additional gov't filing for 2018 plan year in this particular plan case. Reading PBGC Standard Termination Filing Instructions page 14 (distribution Deadline) as well as page 19 line 11a-b, plan asset distribution can take place the later of Ø 180 days after expiration of 60-day (or extended) review period, or Ø 120 days after receipt of IRS favorable determination letter Doesn't this PBGC instruction indirectly sets the proposed distribution date? If so, what would be the earliest possible proposed distribution date.

Thank you My 2 cents, Is this permissible to provide the NOIT along with the Notice to Interested Parties and NOPB at the same day? I was wondering whether the terminating plan with a proposed termination date of 8/31/2017 can use any earlier date before 2/25/2018. And what that date would be.

forgive me if a similar question was asked and answered on this forum that I seem not to find it. My client wants to file for IRS Plan Termination Determination Letter. Assuming every other notice and filing requirements are met and the DB Plan proposed termination date is 8/31/2017, can I use 2/25/2018 as a proposed distribution date. Please help

Thanks!

Are not Defined Benefit Plans required to file form 8955-SSA as Defined Contribution Plans?

On of my client administers a small plan and files From 5500-SF. Therefore, a check mark was put for the last section of Part II - Section 6(b) of the Form 5500-SF that asks whether the plan calims small plan audit waiver. On the SAR and AFN, there is a similar question about whether the plan claims a small plan audit waiver. One of my co-worker is telling me it is not required to list the names and amounts of the publicly traded mutual funds that the plan asset is invested in those regulated financial institution. Don't I have to list the names of the regulated financial institution , for instance WellsFargo Government Securities, and the amount were the plan asset is invested on the SAR and AFN?

On of my client administers a small plan and files From 5500-SF. Therefore, a check mark was put for the last section of Part II - Section 6(b) of the Form 5500-SF that asks whether the plan calims small plan audit waiver. On the SAR and AFN, there is a similar question about whether the plan claims a small plan audit waiver. One of my co-worker is telling me it is not required to list the names and amounts of the publicly traded mutual funds that the plan asset is invested in those regulated financial institution. Don't I have to list the names of the regulated financial institution , for instance WellsFargo Government Securities, and the amount were the plan asset is invested on the SAR and AFN?

Thank you Mike! I called Texas Instrument technical support, and I was explained that there is no way to retrieve stored number that has more than 10 digits to display all the stored digits at one time or in a sequential manner. Again, thank you.

Is there any way to retrieve more than 10 digits stored in my BA II plus calculator?

Thanks John! If the DC plan document has the following provision: 1.1 Forfeitures and Their Application . The following provisions relate to Forfeitures and their application: (a) When Forfeitures Occur. The date upon which a Forfeiture occurs is the earlier of the date a Participant who Terminated Employment receives a distribution of the Vested Interest in his or her Participant's Account, or the date the Participant incurs five consecutive Breaks in Vesting Service after Termination of Employment. If a Participant's Vested Interest in his or her Participant's Account balance is zero on the date he or she Terminates Employment, the Participant will be deemed to have received a distribution of such Vested Interest on the date of termination and a Forfeiture will be deemed to have occurred on the date of such termination. Is this permissible to not contribution the Zero percent vested participants' portion of the non-elective contribution who were in the nondiscrimination test with allocation? How about contributing only the vested portion of the non-elective contribution for those with a below 100% vested plan participants? The goal is to reduce the amount that the client has to write a check to fund the DB/DC plan to the extent that the regulation allows to use the forfeitures account balance.

Since the regulation requires to perform aggregate test if an employer has a DB/DC plan. Is this permissible to use forfeitures from the DC plan as a contribution to the DB plan?

A plan participant was only age 57 and was not eligible for early retirement benefits based on the plan provisions in effect before the plan amendment (see below data). Based on the answer key from SOA- the answer is C Why do we have then compare the age 57 monthly accrued benefits when the participant retire at age 60, i.e., after the early retirement benefit amended? Is this because of the §411(d)(6)(A) accrued benefits or §411(d)(6)(B)(i) early retirement benefits and retirement type subsidies? If it is because of (6)(A), I kind of understand that you cannot take away already accrued benefit. But if it is because of (6)(B), can someone explain me why. Provided Benefit formula: 1.5% of final compensation per year of service. Early retirement date: Age 60 with 10 years of service. Early retirement formula: Before 1/1/2007: Accrued benefit, unreduced After plan amendment effective 1/1/2007: Accrued benefit reduced 4% for each year the benefit commences before normal retirement date Data for participant Smith: Date of birth 1/1/1949 Date of hire 1/1/1980 Date of retirement 1/1/2009 Monthly accrued benefit as of 12/31/2006 $1,650 Annual compensation each year from 2007 to date of retirement $50,000 Question 30 In what range is the monthly benefit payable to Smith on his date of retirement? (A) Less than $1,400 (B) $1,400 but less than $1,550 (C) $1,550 but less than $1,700 (D) $1,700 but less than $1,850 (E) $1,850 or more

can a cash balance plan define NRA - Latest date allowable under the law. · Normal Retirement Age is the later a. Attainment of age 65, or b. 5th anniversary of participation If so, suppose Employee 4 was age 65 with 2 years of vesting service (2 years more than 1,000 hours). Will Employee 4 still be among the other vested employees? Does the definition of the plan NRA dictates, generally speaking, the vesting percentage in a situation like above?

Closely reading the plan doc., I have come across the below Plan Provision (highlighted in yellow). Based on this section Can I exclude all HCEs from receiving Safe Harbor Nonelective ? Eligibility for all contribution type is age 21 and 1 year of service (1,000 hours). And all employees are covered employee except union employee and non-resident alien (there is none in the plan). Plan entry is 1/1 & 7/1 coinciding with or next following satisfaction of eligibility Service crediting method is Hours of service methods (for eligibility 1000 hours first 12 months then switch to plan year) Language from the Plan Doc. 22.2 Application of ADP/ACP Test a. ADP Testing Method. Nondiscrimination requirements for 401(k) Contributions will be satisfied: i. ¨ N/A. Nondiscrimination requirements do not apply because HCEs do not make 401(k) Contributions ii. ¨ Current year testing method (no Safe Harbor Contributions) iii. ¨ Prior year testing method. If this is the first Plan Year to provide for the CODA, prior year testing method is applied using: A. ¨ N/A. This is not the first Plan Year to provide for the CODA B. ¨ 3% contribution assumption for non-HCEs C. ¨ Actual deferral percentages of non-HCEs for first Plan Year iv. ý Safe harbor applies for some or all Eligible Employees. A. ý ADP testing applies because (i) not all Employees eligible to make 401(k) Contributions are eligible for Safe Harbor Contributions (e.g., non-bargained employees receive Safe Harbor Contributions and bargained employees do not OR different age and service requirements apply for Safe Harbor Contributions than for 401(k) Contributions) or (ii) the discretionary Safe Harbor Nonelective Contribution option was selected. (current year testing applies.) b. ADP Test Correction – Roth Contributions. If Roth 401(k) Contributions are permitted under the Plan, excess contributions attributable to 401(k) Contributions will be allocated and distributed as follows: i. ý First from Pre-Tax 401(k) Contributions, then from Roth 401(k) Contributions ii. ¨ First from Roth 401(k) Contributions, then from Pre-Tax 401(k) Contributions iii. ¨ Distribute in ratio that Participant's Pre-Tax and Roth 401(k) Contributions bear to Participant's total 401(k) Contributions for the Plan Year Language from the SPD Safe Harbor Nonelective Contributions Once you have met the requirements to participate in the Plan with respect to Safe Harbor Nonelective Contributions, as described in ELIGIBILITY TO PARTICIPATE: ELIGIBILITY REQUIREMENTS above, you may receive Safe Harbor Nonelective Contributions for a Plan Year if you are a Covered Employee at any time during that Plan Year. If you are eligible, each Plan Year your Employer will determine whether to make a Safe Harbor Nonelective Contribution to your Account of at least 3% of your Compensation for the Plan Year. Your Employer will provide notice each year of its obligation to make Safe Harbor Nonelective Contributions to your Account and of the other benefits provided under the Plan. If your Employer makes Safe Harbor Nonelective Contributions to the Accounts of all eligible employees and also provides the notice described above, it does not have to apply certain discrimination rules that could limit the 401(k) Contributions made by Highly Compensated Employees.

Can I exclude all HCEs from receiving Safe Harbor Nonelective if the current plan document doesn't have any specific language to do so (below is the language from the plan document and the spd)? I moved this question as a follow-up question

Kevin C & BG5150 thank you, The matching formula was a fixed match formula. The good news is that I performed the ADP/ACP test and there was no excess match contribution associated to the excess deferrals that needs to be forfeited. Just to clarify may earlier question (I kind of find the answer now), who should have been in my ACP test. It appears anyone who was eligible for any part of the plan year has to be in my ACP Test, please correct me if I am wrong. Again,thank you very much for your help. AdKu

Thank you K2retire, I have the information necessary to perform the proper calculations. However, I'm not 100% certain how to categorize plan participants for ACP test purposes: 1st- participants who were in the plan for matching contribution purposes before the elimination of the matching contribution but didn't defer at all 2nd. participants who were in the plan for matching contribution purposes before the elimination of the matching contribution but deferred after the elimination of the matching contribution 3rd- participants who entered the plan for matching contribution purposes after the elimination of the matching contribution and didn't defer at all 4th- participants who entered the plan for matching contribution purposes after the elimination of the matching contribution but deferred upon plan entry. Which of the 4 category of participants should be taken into account when I run ACP test? In other words, are any of the 4 category should be considered as benefiting with zero contribution that will ultimately affect the plan's ACP percentage? I would appreciate any help

One of the takeover plan I'm working on had payroll by payroll matching provision that was amended and eliminated mid-year. Due to Failed ADP test, some HCEs' deferral will be refunded to them. There has to be matching contribution refund associated with the deferral that will be refunded, too. Unfortunately, the matching contribution was booked as a transfer when we took it over from the other TPA. I was thinking of entering these matching contribution amounts into our software for testing purposes My biggest challenge is that the plan allow immediate entry to the 401(k) portion of the plan and some employees deferred after the matching contribution was stopped by amendment mid-year. How do I handle a situation like this? Please share me your experience if you were in the similar situation I'm. Many thanks.

Thank you Calavera, I forgot to look at how the early retirement benefit valued (Unreduced accrued benefit), my lack of deep understanding of the subject matter. Again thank you very much until my next question.

. Thank you Belgarath, Mike& Andy. My understanding has been that 415(b) dollar limit is the lesser of the age adjusted dollar limit using the plan basis and mandated basis, correct me if I misunderstood my readings: Under §415(b)(2)(C) - DOLLAR LIMIT – AGE ADJUSTMENTS If plan DOES define a straight life annuity at age 65 or annuity starting date the dollar max is the smaller of age adjusted dollar limit using ü Mandated basis (or Statutory Assumptions) to calculate actuarial equivalence under §415(b): · 5% interest rate & 417(e) applicable mortality ü Plans basis to calculate actuarial equivalence under §415(b): · Plan interest rate & Plan mortality (or tubular plan factor, if applicable) §1.45(b)-1(d)(1)(i) mentions using only the mandated basis if no benefit at either age can be paid as a straight life annuity under the term of plan.

Please help please. I calculated x = $159,120 which is answer A. Based on the answer key form Joint Board, the correct answer is B. DATA Normal retirement age: 62. Early retirement eligibility: Age 60 with 5 years of service. Early retirement benefit: Unreduced accrued benefit. Pre-retirement death benefit: Present value of accrued benefits. Plan assumptions: Interest rate 7% Mortality Applicable mortality under IRC section 417(e) Selected data for Smith: Date of birth 1/1/1956 Date of hire 1/1/2006 Date of participation 1/1/2007 Date of retirement 1/1/2016 Compensation for each year of service $178,000 Selected annuity factors based on the mortality table: Interest rate 5.0% 7.0% ä60 13.25 11.08 ä62 12.68 10.68 X = Smith’s annual IRC section 415 limit as of 1/1/2016. Question: In what range is X? (A) Less than $160,000 (B) $160,000 but less than $165,000 (C) $165,000 but less than $170,000 (D) $170,000 but less than $175,000 (E) $175,000 or more

Thank you Belgarath & Tom, I'll carefully review the hard copy plan doc as well as check the plan doc software itself just in case needs to be marked to trigger some additional options to allow HCE exclusions.

Tom you stated, "thus, in the Code, as long as the NHCEs get the safe harbor you could arguably give the HCEs something less (assuming your document can handle that) .... for example, most of the original documents were hard wired at "3 % safe harbor nonelective" but now many say "at least 3%.." because that is permitted under the regs." Belgarath you stated, "Our document language is flexible in this regard - allows exclusion of HCE's, but as part of that exclusion, allows a "discretionary" safe harbor for the HCE's..." Can anyone help me reviewing whether the below plan doc language gives the flexibility not to provide the 3% Safe Harbor Nonelective (or provide at a lesser rate than 3% of comp) to owner HCEs ? ____________________________________________ 17.1 Safe Harbor Nonelective Features Note: The contribution requirements to satisfy both the QACA and non-QACA safe harbors are identical. Therefore, the provisions of this Section apply to both QACA Safe Harbor Nonelective Contributions and Non-QACA Safe Harbor Nonelective Contributions. a. Safe Harbor Nonelective Formula. Safe Harbor Nonelective Contribution formula is: i. ý Discretionary: The Employer may amend the Plan annually to make a Safe Harbor Nonelective Contribution of at least 3% of Compensation. ii. ¨ Required annual contribution equal to ____________________% (≥ 3%) of Compensation iii. ¨ Other plan. The Employer will make a Safe Harbor Nonelective Contribution equal to or greater than 3% of Compensation to another defined contribution plan maintained by the Employer: (specify the name of the other plan) ___________________________________ Note: The other defined contribution plan must have the same plan year as the Plan. The Employee group eligible to receive the Safe Harbor Nonelective Contribution under the other plan should correspond to Covered Employees for 401(k) Contribution purposes under the Plan. The Safe Harbor Nonelective Contribution made to the other plan must satisfy the requirements of Code Section 401(k)(12)(C) (as provided in the Plan with respect to Non-QACA Safe Harbor Nonelective Contributions) or Code Section 401(k)(13)(D) (as provided in the Plan with respect to QACA Safe Harbor Nonelective Contributions). b. Contribution Period. The Contribution Period for Safe Harbor Nonelective Contributions is the Plan Year.

One of my clients sent me employees compensation information directly exported from their payroll system. A week later I have received W-2s for all employees, including W-3 (Summary of W2 Data Totals for Company). Most employees’ compensation from the payroll system was higher than the W-2 box 5 compensation. Majority of affected employees’ W-2 box 12a shows some amount with code DD (cost of employer sponsored health coverage). These employees’ compensation from the payroll system equals the sum of the W-2s box 5 and box 12a code DD. For some other employees, I needed to add W-2s box 14 code GAP, box 5 and box 12a code DD to get to the compensation from the payroll system. Compensation definition in the plan is 3401(a). I suppose I needed to increase the compensation by elective deferrals under IRC 402(g)(3), IRC 125, IRC 457 and IRC 132(f)(4). Does this mean the compensation for retirement plan purposes has to be the sum of W-2 box 5, box 12a code DD and box 14 code GAP (or in short the compensation from their payroll system)? Help please (if possible examples and explanation from the code or the regulation).