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This is very important point. There are limits on what the regulatory agencies can do, even if the do seem to color outside the lines sometimes. Industry groups have been pushing for more legislative relief, so it may be included in the next Covid bill (assuming they get their #$%^ together and reach a compromise).

thepensionmaven, as C.B. Zeller explains clearly, it lets you stop making SH for rest of year, with 30-day delay of were doing safe harbor match, no delay if SHN. This gives all the relief possible with respect to employer's cash flow. Your implied complaint seems to be that ADP and ACP might not be passed for 2020, but that is not a cash outflow for the employer, so the relief is real. Also, IRS cannot rewrite the Code, only interpret it, so that was all the relief possible. A couple of months ago several BenefitsLink participants were posting about whether you could stop SH match or nonelective just for HCEs, and lamenting that it did not make sense that you couldn't, but that appeared to be the rule. Others thought you could, now the IRS has said that it's interpretation of the law is that you always could amend to stop SH just for HCEs. It's good.

Because the agent wants to sell life insurance, silly!

If your Keys are over age 50, one thing that can help is to put a dollar limit on deferrals of $0 for key employees only. Then they can defer up to the catch-up limit and their deferrals will be reclassified due to exceeding a plan-imposed limit. Catch-up contributions are not counted for top heavy purposes so no TH minimum. $6,500 is a lot less than $26,000, but if they absolutely can not afford the TH minimum then this is better than nothing.

Check the document. I will bet you that it has a provision that basically says if a participant who otherwise has the right to individually direct their funds declines to do so then those funds can be invested essentially as a pooled fund. Bet you bet you.

Amend your 2018 tax return reducing your employer contribution deduction by $687 (that was over contributed in April 2019) Treat the $687 as an employer contribution in 2019.

If none of the key employees defer or receive any other contributions, then there is no TH minimum. As Luke reminds us, the IRS can not rewrite the law. TH relief would have to come from Congress.

I think that is speculation, perhaps valid, from observers and not from the DOL. IMO the risks in this area are not from the DOL bringing some kind of enforcement action, but from lawsuits. And unless the plan has big bucks, that risk is small to nonexistent. That doesn't at all mean that a sponsor shouldn't care or do their best to follow the rules, but it does mean that when an overzealous consultant or salesperson says "oooh, you can't do XYZ" that they are oversimplifying and perhaps outright lying.

Plans can be as restrictive as they want in terms of limiting distributions up to the later of NRA or separation from service, but few are that restrictive.

I imagine most recordkeepers are not terribly incentivized to make it easy to accommodate this arrangement. However in my experience there is usually a way to get the recordkeeper to at least issue a check to the plan sponsor (without creating a 1099-R) which the sponsor could then use to pay the service provider, if the recordkeeper would not pay the service provider directly. Is there a 404a-5 issue? With an affiliated advisor, the fee schedule will be known in advance and can be disclosed to participants. In this hypothetical, I grant that the spirit of 404a-5 is not violated, since clearly the participant who hired the advisor would be aware of their fee arrangement. But I do not think there is any exception to the disclosure rule just because the participant negotiated the fees themselves. If the participant hiring the independent advisor is an HCE, is there a BRF issue to consider? Particularly if non-HCEs would be unable to find an independent advisor willing to manage their small account balances.

I have never seen such an arrangement. If the participant's investment options are restricted to the plan's core menu, would the services of an outside advisor still be plan-related expenses?

Certainly. Consider a plan with a brokerage window or self-directed brokerage accounts. Whenever a participant selects investment alternatives outside the plan's investment menu, they are going to end up using plan assets to pay advisory fees on those investments.

When you retire, you want to be retired! 1. We provided buyer with a USB hard drive that had all files & workpapers - everything - for the life of our firm (35+ years). Whether there's an IRS audit an attorney dealing with an estate trying to determine if someone still has money in a plan, it's all there for the buyer to deal with. 2. At the advice of both ERISA counsel and our regular attorney we "invested" in a 6 year E&O tail, that also covered first-dollar defense costs. As I recall the annual tail premium was about half of our normal annual premium.

1. By any reasonable administrative procedure. How does the plan designate a distribution as a hardship distribution? Presumably the plan administrator knows because the participant checked a box for "hardship" on their request form, and provided some substantiation. The same reasoning should apply for a CRD. If the employee checks the box for CRD on their form and attests that they are qualified then the plan administrator can treat it as a CRD. 2. No, the plan has to be amended. Otherwise the plan document will require that the plan provide a rollover notice and withhold 20%. 3. Yes.

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.

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.