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Every time we have a discussion like this, "I'm just bill" starts playing in my head....

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.

I haven't seen any official guidance on the following situation, and I wondered if there was something that I missed? Suppose a plan excludes "truck drivers" for all purposes. They are excluded even if they have satisfied the plan's 1 YOS/1,000 hour requirement. Plan passes coverage with flying colors. Now skip ahead to 2024 (*or possibly 2023 if SECURE 2.0 further complicates things). Must the LTPT truck drivers be allowed to defer? It seems like the grossest type of stupidity if they must be covered, while excluding people in the same employment classification who satisfy a 1 YOS/1,000 hour requirement. If there hasn't been any official guidance I've missed, anyone have a pipeline with some IRS folks for "unofficial" conversations that they might have had?

It depends some custodians are providing them, others are not. You would need to check with each individually custodian. At a guess I would say "most" of the larger bundled providers have programing it for their quarterly statements by the 6/30/22 quarter that just ended and "most" individual brokerages statements are probably not providing it. The Secure Act requires that the illustrations be provided "at least annually".

I don't think so, but I'm more on the CB side of the equation so I don't know that unequivocally. What possible advantage would they get to do this? Just retroactively adopt the PS-only 002 for 2021 with the desired allocation formula, merge it into the existing plan 001 at 12/31/2022 and prior to 12/31/2022 (or earlier if you still send notices) amend the existing plan 001 effective 1/1/2023 for the SHNE and PS allocation formula from 002. And of course, timely adopt your new CBP 003 effective for 2021. Isn't this standard operating procedure? If they're trying to get deferrals out of 001 and into 002 for 4Q2022 to save on the SHM and get cross-testing benefit of SHNE, I don't think that flies. It's a trap!

By the way, a request for guidance on the LTPT rules was the very first item (actually the first two items) on ARA's recent letter to the IRS: https://araadvocacy.org/wp-content/uploads/2022/07/22.06.03-ARA-Comment-Letter-2022-2023-Priority-Guidance-Plan.pdf

Under Internal Revenue Code of 1986 § 401(k)(2)(D), a condition for treatment as a qualified cash-or-deferred arrangement is that the arrangement must “not require, as a condition of participation in the arrangement, that an employee complete a period of service with the employer (or employers) maintaining the plan extending beyond the close of the earlier of— (i) — the period permitted under section 410(a)(1) (determined without regard to subparagraph (B)(i) thereof), or (ii) — subject to the provisions of paragraph (15), the first period of 3 consecutive 12-month periods during each of which the employee has at least 500 hours of service.” If a condition other than an age or service condition is permitted for someone whose service condition is met with one year of service, the same condition ought to be permitted for someone whose service condition is met with the three 500-hour years. And questions about whether a job classification or other condition for participation is an indirect service condition ought to be resolved without regard to which of the two kinds of service conditions an employee might meet. Belgarath, isn’t an absence of guidance better? That way, intelligent practitioners like you and CuseFan can just read the statute, without needing to consider an error the IRS might introduce.

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.

Maybe, but don't service providers who handle funds (RKs, corporate trustees, custodians) sometimes make mistakes and then directly correct them? Things like errant transfers, mistaken deposits, fee withdrawals from the wrong plan, etc.? Yes, the plan sponsor is ultimately responsible, but wouldn't direct RK corrective action provide a paper trail that mitigates that somewhat? As I said, personal preference and not so much a strong recommendation - the main thing is that the corrections get done timely, completely and accurately and there is sufficient documentation as to precisely how.

If the employee loses eligibility for the medical plan from the reduction in hours, he would need to also lose eligibility for the health FSA. That would mean the health FSA election is automatically revoked and treated in the same manner as a terminated employee (i.e., standard run-out period, COBRA option if underspent). The footprint rule component of the health FSA excepted benefit status rules require that any employee eligible for the health FSA also be eligible for the major medical plan. As a practical matter, a health FSA could not survive as a non-excepted benefit in the ACA era. https://www.newfront.com/blog/aca-and-hipaa-excepted-benefits Common Excepted Benefit #3: Health FSA Health FSAs must qualify as an excepted benefit to avoid violating the ACA market reform provisions. The general requirements for a health FSA to be considered an excepted benefit are: The Footprint Rule: All employees eligible for the health FSA must also be eligible for the major medical plan; and The $500 Rule: Employer nonelective contributions to the health FSA cannot exceed $500. Under the footprint rule, all employees eligible for the health FSA must also be eligible for (regardless of enrollment in) the major medical plan. In other words, the health FSA eligibility “footprint” cannot be broader than the major medical plan’s eligibility “footprint.” ... 29 CFR §2590.732(c)(3): (3) Limited excepted benefits. ... (v) Health flexible spending arrangements. Benefits provided under a health flexible spending arrangement (as defined in section 106(c)(2) of the Internal Revenue Code) are excepted for a class of participants only if they satisfy the following two requirements— (A) Other group health plan coverage, not limited to excepted benefits, is made available for the year to the class of participants by reason of their employment; and (B) The arrangement is structured so that the maximum benefit payable to any participant in the class for a year cannot exceed two times the participant’s salary reduction election under the arrangement for the year (or, if greater, cannot exceed $500 plus the amount of the participant’s salary reduction election). For this purpose, any amount that an employee can elect to receive as taxable income but elects to apply to the health flexible spending arrangement is considered a salary reduction election (regardless of whether the amount is characterized as salary or as a credit under the arrangement). ... DOL Technical Release 2013-3: 2. Application of the Market Reforms to Certain Health FSAs Question 7: How do the market reforms apply to a health FSA that does not qualify as excepted benefits? Answer 7: The market reforms do not apply to a group health plan in relation to its provision of benefits that are excepted benefits. Health FSAs are group health plans but will be considered to provide only excepted benefits if the employer also makes available group health plan coverage that is not limited to excepted benefits and the health FSA is structured so that the maximum benefit payable to any participant cannot exceed two times the participant’s salary reduction election for the health FSA for the year (or, if greater, cannot exceed $500 plus the amount of the participant’s salary reduction election). See 26 C.F.R. §54.9831-1(c)(3)(v), 29 C.F.R. §2590.732(c)(3)(v), and 45 C.F.R. § 146.145(c)(3)(v). Therefore, a health FSA that is considered to provide only excepted benefits is not subject to the market reforms. If an employer provides a health FSA that does not qualify as excepted benefits, the health FSA generally is subject to the market reforms, including the preventive services requirements. Because a health FSA that is not excepted benefits is not integrated with a group health plan, it will fail to meet the preventive services requirements.

I have attended a few webinars for the restatements and late restatements, latest by Erisapedia. There was absolutely no mention of 7/31 falling on a Sunday i.e. extension to next business day. As Peter said, get it done this week. Do not rely on investment advisor unless they provide an official proof for the extension.

Internal Revenue Code of 1986 § 7503 and a tax-law rule interpreting and implementing it state a general rule for adjusting a due date that falls on a Saturday or Sunday, or a legal holiday specified by the rule. 26 C.F.R. § 301.7503-1(a) https://www.ecfr.gov/current/title-26/chapter-I/subchapter-F/part-301/subpart-ECFR94f366dd75fae71/subject-group-ECFRd06c5ed639eb8dd/section-301.7503-1#p-301.7503-1(a). For example, elsewhere on BenefitsLink I’ve mentioned that this year’s unextended and extended due dates for a Form 5500 report on a plan’s year ended with December 2021 are August 1 and October 17. I’m unaware of the IRS having published an announcement that the holidays rule applies for a cycle 3 restatement. And it is unclear whether signing the restatement is the kind of “act” that invokes the holidays rule. I told my clients to get it done no later than this business week. But if someone misses, one might argue that August 1 is the last day for the act tax law calls for.

Thanks. I guess my concern regarding the RK depositing the missed earnings into the plan (and then directed to the appropriate participant account) is what citation would allow a non-plan sponsor to make such a contribution to the plan? Could it somehow be deemed an extension of credit between the plan and a party-in-interest (the service provider) since ultimately it's the plan sponsor's responsibility to operate the plan properly? Would it be cleaner to have the RK reimburse the plan sponsor outside the plan?

A lot of variables there, but to keep it simple: If the employee is working sufficient hours to be eligible for the health FSA, then active health FSA participation would continue. I don't see how the LTD benefits would be relevant here. I suppose you could have a cafeteria plan eligibility provision that stated employees otherwise eligible but receiving LTD benefits are excluded from health FSA participation, but I'm not sure why you would want to go there. LTD benefits won't be a permitted election change event. Any change in employment status that affects eligibility (e.g., loss of eligibility caused by reduction in hours to part-time ineligible status) will be a permitted election change event for those benefits affected.

The use of conditions other than age and service are still limited by the coverage test of §410(b). In effect the coverage test provides "guard rails" against the (ab)use of class exclusions. However, §401(k)(15)(B)(i)(II) provides that the employer may elect not to apply §410(b) to long-term part-time employees. Without the coverage test, I would want some other guidelines by which to determine that a particular exclusion is not abusive. Otherwise, an employer could come up with a classification that would allow them to exclude all, or nearly all, of their long-term part-time employees, which seems contrary to the intent of the law.

https://www.asppa.org/news/look-new-long-term-part-time-employees-rules https://www.napa-net.org/secure-act-long-term-part-time-employees-qas Here are a couple of articles that appear to opine, especially the NAPA piece (see Q&A#3), that the 3 years of 500-999 hours is only a 401(k) deferral eligibility service provision and does not change any reasonable eligibility class exclusion that may be in the plan. So a truck driver exclusion could continue to apply to all truck drivers whether full-time or part-time. This is obviously the interpretation that makes sense versus an interpretation that would require including PT truck drivers who would be excluded if working FT. The equally obvious disclaimer - do not assume subsequent regulations and/or guidance will clarify with the most logical interpretation, stranger things have come out of the IRS. But I cannot see this going the other way.

I think if participants terminated in 2022 before the adoption of the amendment (regardless of effective date), they are entitled to the true-up match since they met the allocation requirements (none) before they terminated.