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Also agree, and for your record keeper's edification, for the reason that these individuals are not employees for 2021. 1.410(b)-2(a) says that a plan satisfies section 410(b) for a plan year... "...with respect to employees for the plan year..." 1.410(b)-9 defines employee as, "an individual who performs services for the employer..." As these 450 individuals did not get called to a job site, they did not perform services for the employer, and therefore are not employees for 2021. Also, job site work sounds like union terminology, are these individuals covered by a collective bargaining agreement?

Yes, it will be a large plan as of 1/1/2023. And no, I can't see why you are being told there is an audit required for 2022, unless perhaps due to non-qualifying assets and the bonding/disclosure requirements for the small plan audit waiver aren't being satisfied? But if that were the case, presumably whoever is telling you this would be able to provide their reasoning? P.S. - I'm assuming the Plan Year remains as calendar year after the merger.

A trustee can be a directed trustee only if the trust agreement provides, somehow, that the trustee is “subject to the direction of a named fiduciary who is not a trustee[.]” ERISA § 403(a)(1). For such an allocation of fiduciary responsibilities to be effective under ERISA §§ 402-405, the identity of that directing fiduciary must be information a reader could get by following the trail of documents that govern the plan and appointments made under those documents. And anyhow, a competent bank, trust company, or other person agreeing to serve as a directed trustee would insist on identifying its directing fiduciary, if only to protect the directed trustee. Typically, a directed-trustee agreement specifies which person is the directing fiduciary. A typical provision is that the plan’s administrator is the directing fiduciary. By signing or accepting a directed-trustee agreement, a plan’s administrator or other directing fiduciary confirms its responsibility.

There should be a section in the plan document addressing mistake of fact contributions. Generally the contribution must be returned with 1 year.

Yes, it gets very messy. A little background, effective 1991 a state university established a private corporation to manage its physical maintenance and food-service operations since the state mandated vendors didn't service the locale except at a significant surcharge. In the mid-90's the DoL posited that these arrangements were governmental, I think it was the California state universities that led that charge. However, this employer did nothing and continued to operate it's two pensions as subject to full ERISA compliance; except that the actuary then refused to sign the new Sch SB. The PBGC took them at their word and agreed they shouldn't be covered; but the DoL & IRS demanded the complete 5500 filings be continued. We applied to the EBSA for an ERISA Advisory Opinion Letter about the Plans status change, and they then dropped their demands for additional filings. Since it doesn't sound like the plan is merging, transferring, or terminating, just a change in sponsor; I would recommend applying for an Advisory letter, and then asking EFAST how to prepare the 5500 filing for the final year. I wouldn't trifle with a rejected filing, especially with the new penalty amounts.

Belgarath is correct (of course), but the client needs to remember that every CPA firm starting an audit for 2023 is still going to need to get comfortable with their beginning balances, etc. They won't do an official audit, but they will spend a lot of time reviewing the 2022 (and likely prior) year's data.

Was it treated as deductible for 1/31/2021? Then it may have to be reallocated as an additional amount; and if so, the source may be discretionary between match & profit sharing. If not previously deductible, then it should all be used towards the plan year 1/31/22 allocations. Only forfeitures and specified suspense transfers may carry forward to future allocation periods. Luckily its a pooled account, any applicable earnings are included for the 1/31/22 balances, and the match vs profit sharing source allocations are just bookkeeping.

Thanks. Both plans currently meet all requirements under DOL Reg. §2520.103-1(c) to receive the audit exception.

Are you using a pre-approved document? Most of the pre-approved documents I've seen provide at least a "boilerplate" specimen Trust Agreement, which would often have language for directed Trustees, and for discretionary Trustees. But there's nothing wrong with a Trust Agreement providing specifically for directed Trustees only.

Every plan has to specify in which plan the top heavy minimum will be provided. Since B/C is the top heavy aggregation group, and C is a defined benefit plan, C's top heavy minimum will control. What does the plan document say? To get to your original question though, there is nothing that requires that the top heavy minimum be provided in a plan that is part of the same aggregation group. If C says something along the lines of, "The top heavy minimum benefit will be provided in plan A to the extent that any non-key employee required to receive a top heavy minimum benefit is otherwise a participant in A, otherwise the top heavy minimum benefit will be provided in plan B" then I think it would accomplish your goal.

Refunds of excess contributions (deferrals) and excess aggregate contributions (matching) after March 15 are subject to the 10% excise tax.

Yes, the 402(g) excess is taxable in the year deferred and the gain is taxable in the year distributed. So if you have a 402(g) excess for 2021 and make the refund with earnings between 1/1/2022 and 4/15/2022 you would issue 2 Form 1099-Rs for 2022 by January 31, 2023, one with code P for the excess (taxable in 2021) and the other Code 8 (taxable in 2022). Had you caught the excess in 2021 and made the refund by 12/31/2021 you could have done just 1 Form 1099-R for 2021 with code 8. I think if you have a loss instead of a gain it gets a little more complicated but it's addressed in the 1099-R instructions.

Have you tried e-mailing Coverage@pbgc.gov? They should be able to help you out. I don't know if you have to file for a coverage determination.

And Larry Starr posted this from Derrin's book. The emphasis of the relevant text for you is mine and so the answer to your question is no. Posted May 29, 2018 Derrin Watson's book Who's The Employer deals with all these issues. From the book: Q 10:21 How are the Code §404(a) limitations on deductibility applied to controlled groups? Ask the Author. Click to work with project folders. Click to add personal annotations/notes. This answer applies only to controlled groups, but not necessarily to other related employers. See Q 12:7 for discussion of deductibility in common control situations. See Q 13:24 for a discussion of deduction limits for affiliated service groups. If two controlled group members jointly maintain a qualified plan, the limitations of Code §404(a) relating to the deductibility of contributions are applied as though all controlled group members maintaining the plan were a single employer. [Code §414(b)] This differs from the other applications of the controlled group rules discussed above. For purposes of Code §415, for example, all employers in the group are aggregated, whether or not they cosponsor a plan. But for two employers in a controlled group to be aggregated for deducting contributions to a plan, they must both sponsor that plan. Example 10.21.1 Nina, Pinta, and Santa Maria are all members of a controlled group. Nina and Pinta jointly sponsor a profit-sharing plan covering their employees. Santa Maria does not participate in the plan. Chris works for all three corporations, and receives $40,000 compensation from each (total $120,000). He is the only participant in the plan. The Code §404(a) limit on deductible contributions is $20,000, which is 25% of $80,000, Chris’ compensation from Nina and Pinta. His compensation from Santa Maria is excluded because Santa Maria did not maintain the plan. Example 10.21.2 Oscar Corp and Meyer Corp are in a controlled group. They jointly sponsor a defined benefit plan and a profit sharing plan. Col. Mustard works for both companies and participates in both plans. Since they jointly sponsor the plans, Code §404(a)(7) limits the deduction to the greater of 25% of compensation or the required defined benefit contribution. Example 10.21.3 Assume the same facts as Example 10.21.2, except Oscar Corp sponsors a defined benefit plan for its employees and Meyer Corp sponsors a defined contribution plan for its employees. Since neither cosponsors the other’s plan, the two companies are separate under Code §404. Accordingly Code §404(a)(7) does not limit the deductions. This would also be true in a common control or an affiliated service group situation. In theory, the Code §404 deduction limit is allocated to the employers according to regulations. However, in the more than 40 years since ERISA, the Treasury has yet to take pen to paper (or pixels to screen) to compose those regulations. Absent those regulations, there is a single Code §404 limit that each employer uses.

If multiple employer plans then the deduction rules apply separately to each entity, so control group question is the key, I think.

You couldn't even provide a QNEC because their 415 limit of 100% of compensation is 100% x $0 = $0. it is unreasonable to include these people in testing. Agree w/Belgarath.

Part VI, #13 on the premium filing form allows you to indicate a final filing, with a checkbox to indicate why. I would assume some filing's due for the part of the year for the time it wasn't governmentally sponsored, right?

The employer can treat the premiums it failed to deduct as an employee benefit expense and start deducting now. The W-2s are correct because the premiums were not deducted. State law would determine if the missed deductions can be recouped. There could be some Section 125 plan issues with making the catch-up deductions pre-tax.