FIS Relius

Whether designing a cross-tested plan, calculating contributions to a safe harbor 401(k) plan, or ADP testing a traditional 401(k) plan, the compensation definition being used is a critical element. The decision of what compensation definition to use will affect both the cost of the plan and compliance testing. In addition to selecting the appropriate compensation definition, the practitioner must be familiar with the various adjustments that may be made to the compensation definition, as they can save the employer money and affect testing.

In this Web seminar, we explain the different compensation design options, alternatives for different types of contributions, alternatives for compliance testing, permissible adjustments to the compensation definitions, the plan economics of each choice, and definitions for different qualification rules. In addition, we explain the correction options when an employer does not follow the plan terms. The speaker also presents practical steps a practitioner can take to avoid such problems.

Topics include:

• Total compensation alternatives
• Safe harbor nondiscriminatory definitions of compensation
  • Adjustments
• Compensation as defined by the Plan document
• Compensation options for testing
• Economics of plan compensation choices
• Compensation for each qualification requirement
  • 415, HCE, top-heavy, 401(a)(4), etc.
• Options for safe harbor 401(k) plans
• Correcting compensation errors
  • Missing deferrals
  • Missing matching contributions
  • Missing nonelective contributions
• EPCRS: Self-correction vs. VCP
• Effect of non-safe harbor definitions

There are no prerequisites or other advanced preparation for this program. The instructor will assume attendees have a general familiarity with the basic retirement plan concepts, and a minimum of two years of experience in dealing with qualified plans.

Instructional Delivery Method
Group – Internet-Based

NASBA Field of Study: Taxes

Speaker: David Schultz, J.D.

Objectives:After attending this Web seminar, an attendee should be able to:

1. Distinguish between the different safe harbor compensation options
2. Design a cost-effective contribution formula
3. Select a correction method for a plan that has operated inconsistent with its terms
4. Determine which definition applies for a particular qualification requirement
5. Select an appropriate compensation definition for testing
6. Identify which adjustments will produce better plan economics

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