pam@bbm Posted February 17, 2021 Share Posted February 17, 2021 One of our plans has a 3% safe harbor non-elective employer contribution. The employer has yet to make the 2019 contribution. Also the employer filed for bankruptcy in 2019. Is there a penalty or other problem with this? I know it's a failure to follow the plan document, but I'm not sure what the ramifications are. Any advice is appreciated. Link to comment Share on other sites More sharing options...
Lou S. Posted February 17, 2021 Share Posted February 17, 2021 Plan Disqualifiction? Link to comment Share on other sites More sharing options...
chc93 Posted February 18, 2021 Share Posted February 18, 2021 Bankruptcy trustee might be the guiding light. Link to comment Share on other sites More sharing options...
Luke Bailey Posted February 18, 2021 Share Posted February 18, 2021 If there are any assets in estate, Bankruptcy Court might allow payment. If not, bankruptcy trustee probably needs to file VCP. Luke Bailey Senior Counsel Clark Hill PLC 214-651-4572 (O) | LBailey@clarkhill.com 2600 Dallas Parkway Suite 600 Frisco, TX 75034 Link to comment Share on other sites More sharing options...
FormsRstillmylife Posted February 18, 2021 Share Posted February 18, 2021 Bankruptcy trustee will need ADP/ACP test run. I think the VCP would be submitted as a request for a really late amendment out of Safe Harbor with consequent need to satisfy ADP/ACP. Link to comment Share on other sites More sharing options...
Luke Bailey Posted February 18, 2021 Share Posted February 18, 2021 I should have mentioned above that there is a bankruptcy preference for unpaid wages. It's a certain percentage, I recall, capped at a dollar amount, of employee wages. Usually that is used up by, ready for it, unpaid wages, but it can also apply to delinquent retirement contributions if there is any amount left over. Luke Bailey Senior Counsel Clark Hill PLC 214-651-4572 (O) | LBailey@clarkhill.com 2600 Dallas Parkway Suite 600 Frisco, TX 75034 Link to comment Share on other sites More sharing options...
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