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Blush! ?

I have a plan where a participant has changed deferral elections 8 times this year. Plus, he's always calls first to ask how much he has contributed year to date (despite the fact that I've shown him where on the website to find that). The guy is a per diem Doctor with variable hours. It seems like he's always trying to project out his pay for the next month and then adjusting his withholding to match his income needs. And in this same plan, another participant has changed deferral elections 7 times, and two more have done it four times. At least those three don't bother me with questions on YTD deferrals. In the words of Jim Rome,: Reee-diculuous. Innnn-credible. Aaaa-rugula.

My outline on self-employment income determination has circled the globe at least 10 times! ? If you send me an EMAIL to larrystarr@qpc-inc.com I will be happy to send you the outline which will answer ALL your questions. There are a number of additional steps that must be considered (for example, unreimbursed partnership expenses, Sec. 179 deductions, and certain oil and gas partnership issues) so it is not as simple as just pulling the numbers off the K-1.

Not an attorney, but this feels like a much more significant issue than what the Rev. Proc. alludes to. This situation smells of fraud to me, and it makes me uneasy to rely on self-corrections in this case. Corrections under IRS aside, have you considered whether this would be a prohibited transaction under ERISA?

They *can* but you need to check if the Plan Document allows distributions from rollover sources at any time.

There is no reason to wait for another restatement; this is an easy amendment to implement. And the statistics continually show that if you allow people to change their elections any time they want, you get FEWER changes than if you only allow changes at limited times during the year, so the payroll clerk won't have that big a deal in making changes. And, changes in payroll deferrals are EASY to implement: you go into the payroll program and just change the number or percentage to the new number or percentage for that person. It ain't complicated at all. And, who runs the business, the payroll clerk? Make the change now; it's best for the client AND the participants and it is almost NO EFFORT to implement.

First, that is a dinosaur or a plan that only allows changes twice a year. The reality is that the plan should be changed to allow changes in the deferral amount at any pay period. Now, as to your situation, the employer was not permitted to take out deferrals starting in September. Since you are still within the same calendar year, I would probably have the employer reverse the deferrals through the payroll system (which means they will be paid back to the employee now) and treat the money that went into the plan as part of the employer contribution for 2019. There are other options, but this is most likely going to be the easiest (other than amending the plan to make this ok by allowing changes anytime, which is what my plan would have said from the beginning so this issue would not have arisen. FWIW.

The IRS takes no position on it - the bond requirement comes from Title I of ERISA which is under the purview of the DOL. A plan which covers only an owner and their spouse is exempt from Title I and thereby bonding requirement. A plan which covers only an owner and their mother does not fall under this exemption and therefore is subject to Title I and everything that comes with it, including the bonding requirement.