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Whatever one thinks of the public policy of ERISA’s requirement for a lifetime-income illustration, let’s put the responsibility where it belongs: Congress amended ERISA to impose the requirement. The Labor department made a rule to implement the statute Congress made. And even that rulemaking is commanded by an Act of Congress.

Congress added the requirement for lifetime income disclosure to ERISA § 105 in the SECURE Act. You provide it because it's legally required, and because if you don't, there is a penalty of up to $100/day/participant.

The decedent’s estate’s personal representative might have a responsibility and powers to administer the sole-proprietor business (until the representative sells or distributes the business). Likewise, or even without a responsibility to administer the business, the personal representative might have powers to serve as the retirement plan’s administrator. As a service provider, you’ll want your lawyer’s advice about whether you may rely on a personal representative’s instructions.

Not quite sure what you mean by 2 years. For example, was a deposit made to the SIMPLE = > 2 years ago, but nothing during the last 2 years? In that case, the rollover could be made. If the participant has never participated in the SIMPLE, or if that participation is less than 2 years from the date of first deposit to the SIMPLE, then no, he can't roll his 401(k) to the SIMPLE.

DFVCP is not available to EZ filers (it is a DOL program, and DOL rules do not apply to EZ filers). The IRS has a similar program, you can read about it here: https://www.irs.gov/retirement-plans/penalty-relief-program-for-form-5500-ez-late-filers Since you said $500 for a single filing and not $750, I'm guessing you are already aware of the IRS program, but were just referring to it by the wrong name. Strictly speaking, the IRS program is a penalty relief program; so if there is no penalty to relieve then I am not sure you are eligible for it. However, if you went ahead and filed under the program anyway for all years, I think it's likely that they will just cash your check, stick your returns in a box somewhere, and never think about it again.

If we were talking recent PYEs then I might be more concerned, but seven years down the road it's a safe bet (but won't say guaranteed) that this issue is dead and buried. Yes, it probably would have been safest to vest that person and pay them out, but to do that now might raise the dead, especially if the plan had been filing as an owner-only arrangement since then.

With only 1 year of accrual, how large can the lump sum be? Vesting to 100% couldn't be excessive, I would think... but would be the "safest", especially if a potential qualification issue arises.

The presumption by the IRS is that you had a more than 20% reduction in eligible participants and a partial termination occurred, the result of which is 100% vesting of the affected participants. However this is not a bright light test, but rather a facts and circumstance determination whether or not a partial termination occurred. You might be able to argue why a partial termination did not occur. Evidence of a voluntary termination on the part of the participant might be helpful to your case that a partial termination did not occur. As to why he should be "forced" the IRS doesn't write the rules with small plans in mind generally. If a partial termination did occur and the participant benefit was forfeited when it should have been 100% vested you have a potential plan qualification issue.

The client is correct - you do not have to file 5500-EZ if the assets are below $250,000, even if you filed in the previous year (unless it's the final year of the plan). However, you are inviting a contact from the IRS by not filing. They won't be able to assess any penalties, since the filing was not required. But it's easy to file, so why not go ahead and do it anyway?

Peter are you aware that these plans have like 4 people on average? You talk as though their director of hr dropped the ball. and the issue isnt generating the numbers; all the software vendors have their reports. And you pointed out that we have until 9/18 probably (thank you for that). But even then we would be sending out 12/31-21 statements. And if you think it’s our fault or the clients fault that we can’t do this with 6/30/22 statements then you probably just don’t understand this model and what it takes to transform a filing cabinet with monthly statements into a reasonable source level statement with vesting updated etc.