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If you look at section 411(a)(8) in the IRC, it says that the latest NRA is the fifth anniversary of participation (or age 65 if later), so I don't think that 5 years of participation, if later, is permitted.

Thanks all. Peter, thank you very much for your offer, and it is great to know that you have specific expertise in this area. If it becomes necessary, we'll certainly refer the client to you - but this particular client generally prefers the "ostrich" approach, and isn't going to take any steps unless DOL actions make it mandatory. It'll be interesting to see where this goes...

Hey Austin, maybe your scenario would be of interest to Derrin Watson for his Q&A column.

Belgarath, I have experience with situations involving near-insolvent, insolvent, and bankrupt employers. I have some practical suggestions about how a fiduciary might get and use help. The ideas depend too much on the particular situation's facts to explain efficiently without a conversation. Feel fee to call me for those explanations. That the employer lacks money need not be an impediment to getting help and correcting what was or wasn't done.

If you reduce the net income down to 24k, then you must compute the DB benefit using only that amount. You still pay FICA on the full amount. Also, be prepared for IRS audit if your pension deduction in line 28 of 1040 is near the net business income of line 12. But it looks defensible.

I would not make the decision or give recommendations at this point. I would put them in touch with an ERISA atty as soon as possible. Because I'm not sure the DOL is going to be terribly happy. In a bankruptcy, the judge would approve audit fees for the plan (if the sponsor had to pay) or the fee could have been paid by the plan. Obviously, I don't have the full picture, but just not filing doesn't seem like the appropriate tactic.

Did I hear somewhere that if the plan is under investigation by the DOL, DFVCP correction of the failure to file Form 5500's is not available?

I say 100%. If the document required 1 year of service with at least 1,000 hours to be eligible, then I'd say she never became a participant, but that's obviously not the case here, since she as profit sharing contributions. So she "participates" each year, and is 100% vested.

I just wanted to take a moment and publicly thank everyone involved in this board from Dave and Lois to the people that are constantly providing answers and guidance. Not sure how I would have survived in this business without this board. Thanks and I hope everyone has a wonderful Thanksgiving! WCP

So glad the message boards have been helpful to you, Bill. We have a great community and so much knowledge available for free. It's a great privilege to be able to attract and serve the industry's best and brightest! Hope you're have a great holiday.

Like I said the IRS does not offer CE but I think you can self report the credit for ASPPA credit towards the 40 hours required but should probably double check with the ASPPA on that in advance. The IRS used to offer a CE cert that was good for EA (both kinds), ERPA, and ASPPA as I used it to get nearly a 3rd of my credits in the last cycle but they stopped doing it the middle of last year I think which I think sucks. It was one of the few places you could get free continuing education credits and the content was generally at least as good as any ASPPA webcast and sometimes better.