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https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/dfvcp.pdf Q6. Is participation under the DFVCP available to all Form 5500 Series filers? No. The relief under the DFVCP is available only to the extent that a Form 5500 is required to be filed under Title I of ERISA. If annual reporting for a plan is only required under the Internal Revenue Code, it is not eligible for penalty relief under DFVCP. However, IRS penalties may still apply. For example, plans covering only self-employed individuals, sole owners (and their spouses) or partners (and their spouses) are not subject to Title I of ERISA. Such plans electing to file Form 5500-SF with EFAST2 instead of filing the Form 5500-EZ with the IRS are not eligible to participate in the DFVCP program. Plan administrators may call 202-693-8360 if they have questions about whether the program applies to their filings.

What the referenced section says is that you can disregard the safe harbor matching contributions and perform the ACP test on only the discretionary match. If only NHCE received any discretionary match then the test will pass automatically.

Why are you yelling?

Peter, this is from the 5500 instructions in the Signature and Date section: Note. If the plan administrator is an entity, the electronic signature must be in the name of a person authorized to sign on behalf of the plan administrator.

Mike, in my experience the IRS stops short of physical violence.

It's one possible method, although there are certainly others. As another example, in a cash balance plan, you might prorate the contribution in proportion to the hypothetical pay credits. I'm having some trouble understanding your claim that sec. 412 is not related to the individual benefit calculations. 412 says that for a single employer plan, the minimum funding standard is determined under sec. 430. 430 says that the minimum required contribution is equal to the target normal cost (plus a shortfall and/or waiver amortization charge, or minus the amount of excess funding). The target normal cost is equal to the present value of the increase in accrued benefits for the year, plan-related expenses and mandatory employee contributions notwithstanding.

No, though I would flip the question -- is there any reason why the Notice can't also be an SMM? Beyond making sure you designate the communication as an SMM, I can't think of any change to the notice you would do to make it do double duty as the SMM.

Thanks, Luke. It is in Section III of IRS Notice 2020-52 at the link above. The IRS reasoning for that section of the notice doesn't have anything to do with COVID-19, so the conclusion that one may reduce contributions for HCEs because they are not "safe harbor contributions," although a 30-day notice is generally required unless Section IV of the Notice applies, should work for all future plan years too.

Plan termination is not an exception to the 10% penalty on early withdrawals. If a participant takes a cash distribution upon plan termination and they do not meet any of the exceptions under 72(t) then the tax will apply. If they want to avoid the penalty then can roll over their distributions. For COVID distributions, whether or not the 10% penalty is waived is determined on an individual basis. When the individual files their 2020 tax return, they will determine whether or not they were a qualified individual, and if they were, they would be able to waive the 10% excise tax. This is true regardless of whether the plan is amended to provide COVID distributions. See Notice 2020-50.

The method suggest by C.B. Zeller may not be a reasonable method. Minimum funding standards for plans are determined under IRC Section 412 and deduction limits are imposed under IRC Section 404. Neither of those sections is related to the separate accrued benefit and vesting calculations under IRC Section 411. Since an actuary has to provide the 412 calculations for the plan and sign Schedule SB, it will be easy for the actuary to calculate the contribution split you need. Of course, if the actuary provides a complete actuarial report it will show the basis for the minimum and maximum contributions and some combination of those numbers could reasonably be used by a layman to make that calculation. Contributions will be allocated based upon the 412 minimums (for example) up to the total minimum contribution, and any excess will be allocated based upon the difference between the minimum contribution and the actual contribution made.

Any reasonable method should be acceptable. One way you might do it, would be to prorate the total contribution in proportion to the actuarial present value of the increase in accrued benefit for the year. If this is in regard to a specific plan, you should ask your actuary.

The waiver of the 10% penalty is to anyone who takes a taxable distribution from a covered account, up to first $100,000 if they have been affected by a Corona Virus related event. The scope of those events and who qualifies was greatly expanded last week by the 2 IRS Notice providing additional guidance on CARES ACT loans and distributions. The taxpayer can claim the exemption on their tax return (I forget which Form is attached to the 1040) if the Plan has not adopted CARES Act provisions.

Ponderer33, if you don't have contributions from retirees, you would not be required to have a trust, because no plan assets. If you do have a trust, tax issues would arise. You would probably want to structure as VEBA under 501(c)(9).

Financial statement impact, non-discrimination test requirements, notice/disclosure? All of these and more are considerations. Problems?