Permissible Withdrawals under EACA and ADP/ACP

[PMC]

Proposed Regs. indicate "permissible withdrawals" are not taken into account for ADP/ACP for the plan year for which the contributions are made.

If a participant is automatically enrolled in Nov. '08 and 2 months worth of deferrals are made for Nov. Dec. and 2 weeks in Jan. '09) and then in January '09 takes a permissible w/d, the automatic deferrals made in Nov. and Dec. '08 are tested in ADP/ACP for '08. A permissible w/d wouldn't occur until '09 and any deferrals made in '09 would not be subject to the '09 tests. Correct?

[Kimberly S]

That is one of the reasons that we have decided to only allow quarterly entry on our EACA plans.

[Guest KMP]

Are the permissible withdrawals allowed only for EACA plans? What about QACA plans?

[PMC]

Yes. You have ACAs, EACAs and QACAs. EACAs are ACAs, QACAs are EACAs but not all EACAs are QACAs. And ACAs may or may not be EACAs or QACAs.

[John Feldt ERPA CPC QPA]

Ack!

[JanetM]

e, i , e , i , o

Old Erisa has just too many acronyms.....................

[Tom Poje]

e, i, e, i, o....

JanetM: the actual words go like this:

Old Macdonald had a plan

He needs an E-I-N

And in this plan he has match

E-I E-I-N

There’s a deferral here a deferral there

Here a match, there a match

Everywhere a match match

Old Macdonald had a plan

E-I E-I-N

Old Macdonald ran a scam

I-O I-O-U

And in this scam he stole the dough

I-O I-O-U

Steal a few bucks here steal a few bucks there

Here a buck, there a buck

Everywhere a buck buck

Old Macdonald ran a scam

I-O I-O-U

Old MacDonald is in jail

D-O D-O-L

He hasn’t got a chance of bail

D-O D-O-L

Steal a few bucks here serve a little time there

Here a year there a year

The judge gave him about 20 years

Old MacDonald is in jail

D-O D-O-L

Old MacDonald’s on parole

And living in RIO

He has a big fat Swiss Account

RIO – R-I-O

With a pretty girl here and a pretty girl there

Here a grand there a grand

He’s got about 500 grand

Old MacDonald’s on parole

And living in RIO

Old MacDonald should be alarmed

E-I E-I-O

His former help will do him harm

E-I E-I-O

There’ a gunshot here and a gunshot there

Here a shot there a shot

Everywhere a gunshot

Old MacDonald bought the farm

E-I E-I-O

[JanetM]

OMG I almost wet my pants laughing on that one. Did you write that Tom? You have more talents than just puzzle making and costumes.

thanks!

[PMC]

Back to the original post - in reading the regs. again, they are explicit in that elective deferrals included in a permissible withdrawal are not tested in ADP for the year for which the contributions are made. For many plans that do testing early in the year, that's going to require some re-testing.

[Tom Poje]

The song is from my collection of (miss) hits "Pension Songs in American History"

I think I am up to 11 of them now.

(They only get worse than Old MacDonald, especially if you are a Beatles or Elvis fan)

[Belgarath]

A classic!