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Short answer, yes, it almost certainly would affect it. Longer answer: As a participant in a defined benefit plan, your father would have earned something called an "accrued benefit." This is usually based on his salary and the number of years he worked for the company, and it is usually expressed as a number of dollars payable monthly starting at his normal retirement age and ending at death. Let's say that his accrued benefit was $2,000 per month. You said he started receiving benefits 30 years ago, so 1991, and his date of birth was 1933 so he was 58. If the plan's normal retirement age was 62, there would have been an adjustment for early retirement; so instead of $2,000 per month starting at age 62, his benefit would be maybe $1,800 per month starting at age 58, depending on the plan's early retirement factors. If the plan says that the $1,800 per month was payable starting at age 58 and ending at his death, then there would need to be another adjustment due to the fact that the payment ends at the later of his death or his spouse's death. The plan's actuary will calculate the amount of the adjustment, but the younger the individuals involved are, the larger the adjustment (and the smaller the payment) will be, since it would be expected to be paid out over a longer period of time. So, if they have been paying out all these years based on an adjustment for a 58-year-old and a 43-year-old, it would be potentially very different than the adjustment for a 58-year-old and a 53-year-old. In order to determine if they did it correctly, you would need to know, at a minimum: Your father's accrued benefit at the time he retired The plan's early retirement adjustment from normal retirement age to your father's actual retirement age The plan's adjustment factors for the form of benefit elected by your father at at your father's actual retirement age using your parents' actual ages Using those, you should be able to calculate the amount of the monthly benefit that was actually payable. If the plan provided cost of living increases or other adjustments for retirees, then there may be additional factors that need to be taken into account. Good luck!

Good question. 1103 didn't change the definition of an employee benefit plan, it directed the Sec of Treasury to modify the requirements for annual filing purposes. I think you can argue it both ways, but I would stick to what the instructions were in 2016 and file DFVCP with an SF.

The key takeaway is that attribution is now taken into account when determining who is an owner of an S-corp for 5500 filing purposes. If everyone covered under the plan is deemed to own at least more than 2% of the S-corp sponsoring the plan, then the plan is considered a one-participant plan and should file Form 5500-EZ. This only applies for S-corps and not any other types of organizations.

Here is what happened: PPA §1103 directed The Secretary of the Treasury to modify the requirements for filing annual returns to ensure that one participant plans with assets of less than $250,000 need not file a return for that year. §1103 also modified the definition of a “one-participant plan” to treat 2% S-Corp shareholders as partners for annual filing purposes. PPA §1103 did NOT amend the definition of an employee benefit plan. DOL regs treat a shareholder (no S or C distinction) as an employee if there are two or more shareholders who are not spouses. As of 2019, IRS and DOL had not implemented or issued interpretive guidance in regards to the 2% shareholder issue, so the instructions had never been changed. We have Janice Wegesin to thank for the 2020 change we are discussing. While she had retired a few years earlier, I had a chat with her about this back in 2019. She reached out to an IRS contact who happened to be working on the 2020 instructions.

Was it though? Nothing changed in Title I of ERISA. The same plans that were subject to sec. 104 in 2019 should still be subject to it in 2020 (changes in the covered employee population notwithstanding). I would have to guess that this change in the instructions reflects an evolution in the IRS's and the DOL's interpretation of the law. I have to wonder about those plans that cover just the 100% owner of an S-corp and their child(ren) and were filing 5500-SF as a single employer plan for years - should they just switch over to 5500-EZ going forward? And can we read from this that such a plan is now, and has always been, exempt from all the requirements of Title I? Did you mean if the child had no ownership interest? A plan that covered only the 100% owner and their spouse was always considered a one-participant plan.

If you'd asked me a week ago I would have agreed with BG. But the 2020 Form 5500-EZ was recently published and here is what the updated instructions say: The bit about 2% S-corp shareholders is new. Following the reference to 1372(b): Note the parenthetical - section 318 contains the attribution rules we are all familiar with for HCEs, key employees, etc. So I think you could read this to mean that a plan which covers only S-corp shareholders, their spouses, children, parents, and grandparents would be a one-participant plan eligible to file Form 5500-EZ.