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PSP = 401(a), would also include a DBP.

A search for a new record keeper may be in order.

I have no idea what that can claim and I'm not an attorney but you might remind them who is listed as the ERISA Plan Administrator in the Plan Document that they signed as ultimately that looks like the responsible fiduciary for much of what they are requesting, some of which looks like source data that they would have originally provided to you. You're responsible for returning any source data the client provided and copies of prior reports they paid for and you sent but you able to charge a reasonable copying charge for your time. You're not responsible for send them work product that hasn't yet been paid. As to time frame, I would again say that turn around is unreasonable. I mean did they just learn Wednesday morning they had a Friday filing deadline for something? And was it something they engaged you to do? I don't see how it's your problem or why you should make it such.

Well presumably most of this is old data/reports/etc. that they should have in their files. As for anything current they are requesting what does your service agreement say? And making a request on Wednesday and expecting the request to be filled on Thursday I would not expect to be considered reasonable. I mean I guess you could call the client and say the cost for this rush billing project is $x and we require an immediate retainer of $y before starting the project. And no we will not be responsible for penalties for your failure to not maintain plan records.

Run!

That was my very first thought, regardless of all the other issues. A RK that administers a plan to their conveniences/policies in contradiction to plan participant's best interests and IRS/DOL laws and regulations does not deserve this client's business. If they can't properly handle small accounts then they need to limit their clientele to plans w/o such, IMHO.

Without condoning any plan or service provisions and without suggesting a lack of other ways to manage the problem, there might be a practical way for an employer to avoid an unwise or unfortunate effect of what’s described above. In the data the employer uploads to the recordkeeper, might the employer wait to record an employee’s severance-from-employment date? For example, an employer might wait until the later of: n weeks, pay periods, or months after the internally recorded severance-from-employment date; when the employer decides that all after-severance pay has been paid. Such a plan-administration procedure would be designed only to slow down an involuntary cash-out distribution. The procedure would include an escape to upload a severance-from-employment date if doing so becomes needed to support processing of a participant’s requested distribution. I do not suggest a retirement plan’s employer/administrator even consider this idea unless it gets advice from its labor-and-employment lawyer and its employee-benefits lawyer.

Check the service agreement to see if the plan administrator agreed to have this happen automatically. I understand if the fee is more than the amount, the r/k keeps it. Is the money really being forfeited? Or is it being taken as a fee? If put into the forfeiture account, that is not allowed, as deferrals are alway 100% vested. What if the deferral is, say, $100? What happens then? I do not like the fact that these "distributions" happen right away. Side note: 2 of those 3 deposits after termination were probably late. Did anyone address that fact?

In our business if the fee eats up the balance then the part. gets nothing.

Thanks Bill. I've seen that, but I wasn't sure if a straight Profit Sharing Plan fell under one of those or if the assumption is that it falls under the "but not limited to" group

Excluding bonuses is considered reasonable within 414s if it doesn't by design discriminate in favor of HCEs. Passing the test shows that it doesn't. You're good to go. Here's a link if you want. Compensation definition

I'm not sure that situation is contemplated by the Regs, if it is I have not seen it. I don't know if this is the correct answer but if it came up in one of our Plans, we would issue the requested 402(g) refund but would NOT rerun the ADP test as the excess was due to contributions to an unrelated Plan that the Sponsor had no control over. Unless there is a reg I'm missing that address this situation.

At least since 1960, the Treasury department has a rule: “A qualified pension, profit-sharing, or stock bonus plan is a definite written program and arrangement which is communicated to the employees[.]” 26 C.F.R. § 1.401-1(a)(2) (emphasis added) https://www.ecfr.gov/current/title-26/chapter-I/subchapter-A/part-1/subject-group-ECFR6f8c3724b50e44d/section-1.401-1#p-1.401-1(a)(2) The tax-law worry is that a plan isn’t really a plan if employees beyond the owner or top executives don’t know the plan exists. Whatever ostensibly non-discriminatory provisions a plan has aren’t practically real if employees don’t know they have legally enforceable rights. Since the late 1970s, IRS examiners have looked to delivery of a summary plan description as a way (and perhaps a presumed normal way) to “communicate” a plan. Also, an accrued benefit statement might be another way an employee could learn about a plan’s existence and her potential right under the plan. The Internal Revenue Service might consider the quoted rule (and some related tax-law rules) as supporting some information requests that otherwise lack a particular tax-treatment hook. And even for unsupported information requests, your client will want your advice about whether it’s wise or unwise to object. An ERISA rule confirms that “in-hand delivery to an employee at his or her worksite is acceptable.” 29 C.F.R. § 2520.104b-1(b)(1) https://www.ecfr.gov/current/title-29/subtitle-B/chapter-XXV/subchapter-C/part-2520/section-2520.104b-1 If some SPDs, benefit statements, and other communications were hand-delivered, your client might want your help in drafting or editing an affidavit that states what your client did. And an affidavit might describe the employer/administrator’s regular practice for mailing communications not delivered in the worksite.

I would usually treat management fees as part of the overall earnings and not a separate expense.

I, for one, find Cloudy's original post unambiguous. The R&F used to get more than they get now. This is relevant because it implies that ATD will give better results. We have to assume that the lower R&F pay credits are taken into account in a4 testing and since Cloudy is supremely uninterested in a discussion of a4 that a4 testing is satisfied. I think Effen's position is aggressive and that most adopt 2cents' approach that the pay credit, itself, is irrelevant, and instead look to the 0.5% accrual for a26 testing. But, it most certainly is a facts and circumstances determination and if Effen is willing to fight that battle, I'd gladly watch. I agree with John that ATD can most certainly be used when a26 is tested.