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For those who are interested, the following e-mail message was sent by the individual working on getting our volume submitter plan approved:

I was able in a similar situation to get a proposed $55,000 DOL penalty reduced to $5,000. The legal fees exceeded $5,000, let alone $2,000.

Hiya Folks! The simple answer is yes. However, it ceases to be a 412(e)(3) plan at that very moment; it becomes a regular old DB Plan, with all of the minimum funding rules, Fiduciary rules, tax rules, compliance rules, etc. You would probably need a new Plan Document at that moment, too. As an aside, I rarely find one of these plans that is compliant, and this is a good chance to bring it into compliance, assuming the client will pay for what a DB Plan costs when someone is actually doing the work.

The owner is a participant in the DC plan just not getting an allocation this year correct and is also a participant in the DB plan, correct? The non-Key HCE is a participant in both the DC and DB plan, correct? Your document(s) says the T-H minimum is stasfied in the DC plan for participants in both DB and DC, correct? The Plans are being tested together to pass 401(a)(4) correct? Sounds like the non-Key HCEs needs a 5% T-H minimum in the DC plan if my assumptions above are true.

Thanks guys, could be as we get on in years, the less patient we become. This happens all the time whenever there is a change of EINS or an inadvertent look on the wrong computer screen. A few years ago, it took IRS 11 months (no kidding) to straighten out an 1099R filing. After that one, patience is being stretched!

Vesting is not an issue. But yes, all reasons in favor of TPA's over CPA's administering plans. Ken - part of the point of my question is it is either: 1. Impossible to back to accurately determine specific balances, or 2. It could be possible, but would be quite costly to the Plan Sponsor.

We have seen both circumstances: Filed without the audit, received 45 day letter form DOL, client got the audit done, filed an amended return, and sent a copy to the National Office: still get an assessment of penalty for number of days late from original filing date (extension null and void). Sometimes, there is a reasonable cause explanation that gets you a reduced or waived penalty. When amended return with audit is NOT provided in 45 days, no extension is permitted. They get an assessment of penalty letter. No longer eligible for DFVC or getting penalty waived, though maybe reduced with a very good story. I think that IF an auditor has been engaged and reasonably assume they can get the audit done, I prefer the "file late and complete return, under DFVC amnesty. A $2,000 DFVC fee is a lot less costly than an ERISA attorney, assuming it is just one year, and there are not compliance issues that hold up getting a clean audit. And no one is signing a form under penalty of perjury, falsely claiming the filing is complete and accurate.

Non-key HCE is benefiting in both DB and DC, correct? So 5% DC for TH.

I don't mean to seem like an @$$, but why is this happening many times?

Ms Janice was a real sweetheart.

Aw. I hadn't heard about Janice's death. How sad, and what a loss to the industry.

If an employee-benefit plan’s sponsor is a corporation and the plan’s governing documents do not restrict who may amend the plan or how she may do it, anything that is the corporation’s act under the law that governs the corporation could be an act that might amend the plan. (Whether a particular act does amend a plan is a further analysis.) Justice O’Connor’s Curtiss-Wright opinion cited treatises’ statements that a human’s authority to act for a corporation may, rather than an express delegation, be inferred or implied. The Supreme Court’s decision remanded the case for fact-finding “into what persons or committees within Curtiss-Wright possessed plan amendment authority, either by express delegation or impliedly[.]” Yet, even an authorized person’s act might not amend a plan. An authorized person might have signed or otherwise adopted a writing made for some other purpose—for example, to make the corporation’s agreement with a particular officer, employee, or other contractor—and neither stated nor intended an amendment of an employee-benefit plan. In some situations (more for health benefits than for retirement benefits), whether an organization’s written promise to a particular individual is (or is not) also an amendment of an employee-benefit plan might matter less than whether the organization wants to meet its promise and (if so) how it might do so. An individual who obtained a particular promise is unlikely to pursue a dispute if the promise is met.

This is an unusual case because the AP left the money in the plan. It would seem to me that if a family lawyer can convince a domestic relations court to modify the existing QDRO to award less to the AP, even $0, then that is not a QDRO against an alternate payee, but just restores to the participant his benefit. I don't see it as a problem under ERISA or the Code, but a family law problem.

I believe it is considered an incomplete filing and is treated as having "not been timely filed" with penalty and interest accruing immediately, and, I think this applies to a filing that does not include a required audit too. I don't think the old IRS "45 days notice grace period" applies anymore.

I believe that possibly the "green book" that he was referring to is Janice Wegesin's 5500 form preparers manual, which was the Holy Grail of 5500 preparation guidance for many of us for years. It had a green cover. Janice sadly passed away recently.