Leaderboard

I agree with the first answer but will add: read the plan document very carefully. When does the plan say a person forfeit their unvested balance. Did this person forfeit but the recordkeeping just not showing it yet? For example: I have plans that say a person forfeits the day of termination or the last day of the year of termination. A person who terminated in 2020 might have forfeited already per the document but the recordkeeping system simply hasn't caught up to that reality. For example I am still just getting some of my 2020 census files to even know if a person is terminated. ESOPs tend to be balance forward not daily. So read the document carefully and decide when this person should forfeit per the document and compare that to the plan termination date. If the document says they have forfeited already and it is just a matter of bookkeeping you can forfeit the person in my mind. Otherwise the person gets what I call the plan termination windfall and there is nothing that can be done about it.

All affected participants become fully vested in their account balances on the date of the full or partial plan termination, regardless of the plan’s vesting schedule. Affected participants are current or former employees who haven’t received full payment of their vested interest by the plan termination date, unless they’ve incurred at least 5 consecutive 1-year breaks in service. Retirement Plans FAQs regarding Plan Terminations | Internal Revenue Service (irs.gov)

Agreed. The 4/1/22 RMD is based on the old tables and the next one due by 12/31/22 is based on the new tables because it’s for the 2022 distribution calendar year.

In terms of things I could ask a client and expect them to reasonably give me an answer on their own: What type of entity is the company? What is the principal business of the company? Do any of the owners of the company (or their spouses, children, parents or grandparents) have any ownership interest in any other organizations? Do any of those other companies have employees? Does this company provide services to any of those other companies or vice-versa? Are any of the companies regularly associated in providing services to the public? If the answers to those questions indicate that we need to consider whether an ASG exists, then I would start digging in further.

Keep in mind that RMDs due 4/1/2022 (for someone who was 72 and terminated in 2021) are still technically 2021 RMDs and will use the 2021 table.

Belated thank you Mike and Bill.

Heck, we usually can't even convince businesses with scads of money to spend $1,000 in legal fees...

Thank you.

Here's a flowchart from the IRS that may help. I don't know the date on this and it wouldn't cover all the factors to consider, but could start a conversation on it. IRS flowchart on ASGs.pdf

Confirmed

That is my understanding as well.

As a non-lawyer, I find it hard to imagine that a newly appointed Fiduciary could be held liable for any Fiduciary shortcomings from a prior Fiduciary, which the current Fiduciary has no legal power or authority to change. However, according to Mr. Bumble, "The law is a ass." I leave the fiduciary liability question to the legal cognoscenti. Way over my head.

If the plan is not a 401(k), I believe you can have up to a two year wait, if you vest 100% on entry. I could be wrong.. that's why I retired 😆

The Outbreak Period extensions (now capped at a disregarded period of one year) apply to HIPAA special enrollment, COBRA (elections, notices, and payment), claims submission deadlines, appeal deadlines, and external review deadlines. They don't apply to a dependent audit documentation situation. However, if this was a mid-year enrollment based on a HIPAA special enrolment event (e.g., loss of other coverage or birth, adoption, or placement for adoption), and it's still within one year of that event, the Outbreak Period would apply. In other words, if the employee attempted to enroll the child based on the HIPAA special enrollment event that occurred within the past year but failed to provide the required documentation for enrollment (e.g., proof of loss of other coverage, birth certificate), the employee would still have the extended one-year window (or, if earlier, until the end of the Outbreak Period) to complete the special enrollment. Here's the relevant section of the "Joint Notice": https://www.federalregister.gov/documents/2020/05/04/2020-09399/extension-of-certain-timeframes-for-employee-benefit-plans-participants-and-beneficiaries-affected III. Relief A. Relief for Plan Participants, Beneficiaries, Qualified Beneficiaries, and Claimants Subject to the statutory duration limitation in ERISA section 518 and Code section 7508A,[7] all group health plans, disability and other employee welfare benefit plans, and employee pension benefit plans subject to ERISA or the Code must disregard the period from March 1, 2020 until sixty (60) days after the announced end of the National Emergency or such other date announced by the Agencies in a future notification (the “Outbreak Period”) [8] for all plan participants, beneficiaries, qualified beneficiaries, or claimants wherever located in determining the following periods and dates— (1) The 30-day period (or 60-day period, if applicable) to request special enrollment under ERISA section 701(f) and Code section 9801(f),Start Printed Page 26354 (2) The 60-day election period for COBRA continuation coverage under ERISA section 605 and Code section 4980B(f)(5),[9] (3) The date for making COBRA premium payments pursuant to ERISA section 602(2)(C) and (3) and Code section 4980B(f)(2)(B)(iii) and (C),[10] (4) The date for individuals to notify the plan of a qualifying event or determination of disability under ERISA section 606(a)(3) and Code section 4980B(f)(6)(C), (5) The date within which individuals may file a benefit claim under the plan's claims procedure pursuant to 29 CFR 2560.503-1, (6) The date within which claimants may file an appeal of an adverse benefit determination under the plan's claims procedure pursuant to 29 CFR 2560.503-1(h), (7) The date within which claimants may file a request for an external review after receipt of an adverse benefit determination or final internal adverse benefit determination pursuant to 29 CFR 2590.715-2719(d)(2)(i) and 26 CFR 54.9815-2719(d)(2)(i), and (8) The date within which a claimant may file information to perfect a request for external review upon a finding that the request was not complete pursuant to 29 CFR 2590.715-2719(d)(2)(ii) and 26 CFR 54.9815-2719(d)(2)(ii).