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We live in a time of transition, an uneasy era which may endure for years. During the period, we may be tempted to abandon some of the time-honored principles and commitments which have been proven during the difficult times of past generations. We must never yield to this temptation. Our American values are not luxuries, but necessities - not the salt in our bread, but the bread itself.

If they made the election, then the issue is the deposit and it should be corrected immediately. I don't see this as being different than a w-2 employee making an election and it not being deposited.

I note QDROphile's comments above but cannot personally imagine why they would do this. Most of our church plans have discriminatory contribution formulas for pastors, etc which would not pass testing if they had to comply with ERISA. Also the use of a waiting period for deferral eligibility can be very useful and important. Finally, many of these plans exclude classes of employees for whom coverage would be required if the plan was ERISA. I do think all church plans should have plan documents (although not all are required to do so). The document is the "contract" with the participants and it is wise to have that in writing and an SPD to deliver. It also provides some guidance and evidence of structure in a state where there are state fiduciary requirements for Non-ERISA plans (California). PNJ

Yes. They can do this and we have done this successfully. I did write a letter for the client to send indicating that the Plan was a Non-Electing Church Plan and that the 5500's were filed in error. Some where in my files, I have a copy of an IRS pub that says merely filing a 5500 does not constitute an election to be ERISA. This rule is literal and narrow. A Church plan cannot "accidentally" become ERISA. PNJ

We're proud of our search engine -- something to try is "Puerto Rico" as a search term -- https://benefitslink.com/search/index.cgi?textQuery=Puerto+Rico&sort=2&level=all_words&datasource=MYDB

Because the participants are cynical about throwing themselves at the ineptitude (or worse) of the church governance? You might be surprised at the ignorance of the concept of "fiduciary responsibility" in churches. ERISA at least provides a framework for reference.

1) The IRS issued guidance on this point - which provides a "safe-harbor" and indicates there are other "reasonable alternatives" (and then lays out ONE such reasonable alternative as an example. The safe harbor is to defer until 1/1/2021 and reamortize as of that point in time, with all payments due as scheduled. The ONE reasonable alternative is defer payment due in 2020 until 10/1/2021, but require regular payments due in 2021 to be paid as scheduled. In this alternative, you would reamortize as of 10/1/2021. Another alternative discussed (but not referenced by the IRS in the guidance - but of which they were aware) would be to stop payment from 10/1/2020 through 10/1/2021, and reamotize then. 2) The Act allows for an extension of the term of the term of the loan by the amount of the deferment period - up to 12 months. 3) Yes, prepare an amort schedule, and reamortize at the appropriate time. Keep in mind, the participant can restart payment if they choose prior to the end of the deferment period. Yes, but remember that the term of the loan is extended by the period of deferment - so reamortize over the remaining term, as extended.

I don't know about that. I honestly don't know if it is a flag. There are other reasons for not investing in real estate in a plan, starting with 1) valuation - what is it worth, each year? and 2) real estate often involves financing, which can trigger Unrelated Business Taxable Income, and 3) in small plans, owners often blur the lines between the plan and their personal investments, and don't understand that they can't buy/sell from/to themselves or a family member, or invest jointly with same, and otherwise gum things up by paying taxes and other expenses themselves when the plan should be paying, etc. etc. As you note, it is clearly "legal."