ERISA Outline Book Qrtly Update

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I noticed in the winter 2007 ERISA Outline Book Quarterly Update there was a memorandum discussing the IRS' review position on the disagrregation of otherwise excludable employees for ADP testing. We do not get the quarterly updates. Does anyone know where I can get a copy of the IRS review on this subject (other than the quarterly update)?

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Since I did not get a response, I will try asking the question differently:

To determine otherwise excludable employees (min. age of 21 and min. service of 12 months), do you have to use the entry dates in the plan (i.e. monthly, quarterly, semi-annual) or can you use 410(a)(4), earlier of next plan year begin or 6 months after eligibility satisfied.

Any help would be greatly appreciated.

[fiona1]

If the IRS commented on this situation, then it's news to me. There was an ASPPA webcast in late January on 401K testing. At the end of the webcast they discussed some unanswered questions - one being what entry date to use in determining the otherwise excludable employees. This is one of the Q&A's from the webcast:

Q: We use Relius for our ADP/ACP Testing. When the test is run to exclude employees who have not met the statutory eligibility requirements, the system will exclude any employee who is not age 21 and has not been employed 18 months. For example, a calendar year Plan has immediate entry for salary deferral contributions. An employee age 21 hired on May 31, 2005, worked 1000 hours in their first employment year. The employee terminates their employment on September 30, 2006. Since the employee failed to be employed 18 months, the system is placing the employee on the excludable list. Is this acceptable? If yes, we could have excludable employees in a Plan that requires age 21, 1 year of service with 2 entry dates.

BK: As indicated in the session, IRS has not clearly defined which entry dates are acceptable (none, plan or statutory). You need to discuss this with your software provider to see if you are comfortable with their assumptions.

So as of late January, we were still waiting for guidance on this issue. But if it has been addressed in the last month, I missed it. I know that we use the semi-annual date in the determination on the tests that we do.

[John Feldt ERPA CPC QPA]

At the 2006 ASPPA annual conference Lisa Morjiri-Azad, from the IRS Office of Chief Counsel, Washington, D.C. stated that you cannot use the semiannual dates unless the plan defines the entry date that way. Craig Hoffman (the moderator) disagreed very strongly, as did the audience.

We have not yet seen anything official in this regard.

[WDIK]

Additional thoughts...

http://benefitslink.com/boards/index.php?showtopic=33194

[austin3515]

Here is my impression of Lisa Morjiri-Azad: :angry:

I'd vote for any president who promises to kick her out on the street.

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Thanks for all of your responses.

[Mike Preston]

It is getting worse. I have been told that the mid-atlantic district of the IRS is, upon audit, using the statutory dates. This is directly contrary to Lisa's stated position. She believes it is crystal clear to use the plan's entry dates. Get the tape from ASPPA if you don't believe me.

It would be funny if it wasn't so sad.

In the olden days, where reasonable people such as Ira Cohen held the "powers that be" mantle, when an inconsistency or ambiguity was discovered they would make it clear, either formally or informally, that either (any?) approach would be acceptable through a certain date and then, based on a specific clarification, only one approach would be allowed after that.

[Don Levit]

Mike:

Do you know how the Individual Retirement Account was named?

Don Levit