CODING DUAL ELIGIBILITY IN QUANTECH

[pmacduff]

Has anyone using Quantech had to set up a 401(k) plan with dual eligibility? I recently attended Quantech training and was not satisfied with the answer given. I was advised NOT to code the 12 months, 1000 hours under the

"Allocations Requirement" screen because it would require those criteria every single year for all participants. I didn't think it was that unusual for a client to have dual eligibility for deferral and match/employer monies!!??

[Guest]

the good news is that Qtech told me that someday the system is suppose to have 'dual' eligibility'. the bad news is, your guess is as good as mine when it will actually be available. (Remember, you really only enter the plan once, but technically you need 'entry' dates for each of the 'plans', that is, for 401(k) 401(m) and 401(a)(4).

now, on to the only workaround I know.

Plan has immediate eligiblity for deferrals and 1 year wait for match.

If you code waiting period = 0 in entry screen, and waiting period = 12 in match screen it will accomplish what you desire. It is not an 'every year' thing. system simply looks at date of hire and did the person complete the waiting period from that date, not the current year.

now lets throw a wrinkle into it.

immediate entry for deferral, but entry dates of 1/1 and 7/1 for match after completion of 12 months.

you would then put 18 months into the waiting period for match.

here is the logic: ee 1 DOH 3/2/99, ee 2 hired 8/1/99.

for match ee 1 completes 12 months on 3/2/00 and you want him to 'enter' 7/1. By coding 18 months ee will receive a match if system detects him still working on 9/2/00.

ee 2 completes 12 months on 8/1/00 and therefore 'enters' match on 1/1/01. because you have 18 months coded, ee will not receive match in 2000.

this is a work around at best, and does not handle the following:

suppose ee 1 quits between 7/1 and 9/2.

suppose plan calls for using comp from date of particiaption.

system also has problems with the 410(B) results when using waiting period (at least for profit sharing)

the 'who benefits report' will indicate the people correctly as 'excludable' but the 410(B) report shows them as 'includable and benefiting'.

[pmacduff]

Tom - Thanks so much for the input. It isn't an issue on our smaller plans because it's easy to exclude those not eligible, but with the larger plans it can really be a headache. Thanks again.