Winter 2013, Volume 6/Issue 7
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What is the most important thing you can do to ensure that your employees will have a comfortable retirement?
The answer to this question is simple: encourage them to SAVE MORE! According to the 2013 BlackRock Annual Survey, 75% of investors could be...Read More
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Form 5500, Employer Contribution Deposit, ADP/ACP Excess, 402(g) Limit Corrections....Read More |
What is plan compensation for sole proprietorship and partnership entities?
Plan compensation is an important factor that is used to identify contribution rates and the passage of nondiscrimination testing in retirement plans. While compensation for corporations can be easily identified from...Read More |
TSC Secure Plan Access Site
Have you been to the enhanced TSC Secure Plan Access site lately? We invite you to take a moment to review the valuable tools available to you.
Log in to your secure site by clicking on the green...Read More |
U.S. Supreme Court's Ruling on the Defense of Marriage Act: Impact on Retirement Plans
In June, the U.S. Supreme Court struck down key provisions of the Defense of Marriage Act ("DOMA"). As a result of that decision, the federal government will now recognize same-gender marriages if....Read More |
What does this mean: "ADP Test" and "Top Heavy Test"?
Qualified retirement plans are subject to various nondiscrimination tests. The two most common tests are also the most commonly confused. First, it is important to understand how employees are classified for these tests...Read More |
Kelsey Larson, Liz Derke, Allison Grondahl
Introducing 3 new employees at TSC....Read More
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The Upcoming Document Restatement
The laws governing retirement plans are continually changing. To incorporate new legislation into plan documents, the IRS uses a recurring six-year cycle process for plan rewrites (restatement). All profit sharing/401(k) and similar retirement plans that were adopted on an IRS pre-approved ("prototype" or "volume submitter") plan document in the United States must go through.....Read More |
Brain Teaser
Two Part Question:
Given the census below, does the plan pass the ADP test?
Employee |
Compensation |
Deferral |
ADP |
Harold |
200,000 |
12,000 |
6% |
Haddie |
110,000 |
5,500 |
5% |
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|
HCE Average |
5.5% |
Nick |
50,000 |
4,000 |
8% |
Natasha |
40,000 |
2,000 |
5% |
Nathan |
30,000 |
0 |
0% |
Naomi |
20,000 |
800 |
4% |
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NHCE Average |
4.25% |
Given the following statistics, is the same plan Top Heavy?
Employee |
Role |
Compensation |
Ownership |
Total Assets |
Harold |
CEO |
200,000 |
50% |
9,000 |
Haddie |
Vice- President |
110,000 |
44% |
10,000 |
Nick |
President |
50,000 |
6% |
18,000 |
Natasha |
Manager |
40,000 |
0% |
6,000 |
Nathan |
Supervisor |
30,000 |
0% |
9,000 |
Naomi |
Receptionist |
20,000 |
0% |
8,000 |
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|
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100% |
$60,000 |
Click here to submit your answer. |