allocation conditions for ps and match

[pmacduff]

Have a plan with 90 day eligibility for deferrals. Entry date is the first of the quarter next following. (no exclusions)

Plan has match and profit share with allocation conditions of age 21, 1000 hours, last day. Plan excludes keys from TH minimums.

One of the partner's children has worked there continuously since 2009. Entered the plan as of 04/01/2010.

Did not work over 1000 hours in 2009 ,2010, 2011 or 2012 but is age 21. Was excluded from the TH minimum in those years due to status as "key". Works over 1000 hours in 2013 and is employed on 12/31/2013.

I believe this participant gets a full profit share allocation and match for 2013 because the requirements for allocation have been met. I have one of the large vendor administration teams telling me that she won't get PS and match until 2014.

agree or disagree?

[Jim Chad]

FWIW I think you are correct and your vendor is confusing eligibility and allocation conditions.

[ESOP Guy]

Have a plan with 90 day eligibility for deferrals. Entry date is the first of the quarter next following. (no exclusions)

Although your question is a bit vague. You tell us the eligibility conditions for deferrals and the entry date that appears for deferrals. You don't state any where if the PS and match have the same eligibility requirements or not.

Assuming they are the same this person entered in 2010 and is just now meeting the allocation requirements. If the PS and match eligibility requirements are different then the 401(k) portion we need more facts.

[pmacduff]

The profit share and match eligibility is listed in the AA as age 21 and 1 year (1000 hours) of service. Plan entry dates are the same for all contributions (quarterly following). Allocation conditions for profit share and match are age 21, 1000 hours, employment on last day.

Just trying to wrap my thoughts around the fact that although she is already a plan participant on 12/31/2013 & met the allocation conditions for profit share and match she's not eligible for profit share or match until after 01/01/2014.

FWIW I do have source eligibility/entry dates/etc coded into Relius and it gave her both match and profit share. I must have something coded incorrectly if she should be excluded for 2013.

I will review the specs and census data again.

Thank you for your thoughts.

[ESOP Guy]

Based on the new information I do NOT think this person should get a PS or match contribution. This person would enter the plan for purposes of the PS and match contribution on 1/1/2014. That is the 1st day of the 1st quarter they met all of the eligibility requirements.

This person did not meet the requirement of being 21 and working 12 months during which they also worked 1,000 hours until 12/31/2013 so they enter on 1/1/2014. This ASSUMES that the plan changes from anniversary date to measure the 12 months and 1,000 hours to plan year after the 1st year this person employed. If it doesn't make that change then I don't think we still have enough information to know if the person gets a PS and match contribution.

[pmacduff]

yes the AA is checked that after initial 12 month eligibility computation period from date of hire the measurement period switches from anniversary to the plan (calendar) year.

[BG5150]

FWIW I do have source eligibility/entry dates/etc coded into Relius and it gave her both match and profit share. I must have something coded incorrectly if she should be excluded for 2013.

I will review the specs and census data again.

Thank you for your thoughts.

You need to make sure you have the correct eligibility set in the SOURCE, not on the general eligibility tab. In version 18, it's the Source Overrides tab (3) when you open up the specific source.

[Tom Poje]

however, let's say you processed things in 2009, without coding each source (e.g. 90 days eligibility only)

then the system will have entered the person for profit sharing purposes, but never given a contribution because they never had 1000 hours.

now when the person has 1000 hours it gives the person a contribution, because it is doing the best it can - it doesn't realize the person shouldn't have entered yet for profit sharing. s o you would have to manually override and say the person is not eligible.

[pmacduff]

BG5150 - I do have the eligibility set under each source individually in the account specs. I think what Tom has pointed out might be what happened in this particular case.