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You are probably referring to the "Taxpayers not in the covered disaster area, but whose records necessary to meet a deadline" part of the relief. The IRS will (or is supposed to) cross reference the location of the taxpayer and automatically apply the relief based on zip code. Relief based on a service provider in the disaster area is not automatically applied by the IRS since they don't have the information to cross reference. Expect correspondence, but relief is still granted based on the location of the service provider. Relief based on service provider location is not determined on a case by case basis, they are not going to apply a facts and circumstances test to determine whether the PA could have filed timely. They will simply verify that the zip code of the provider is in the disaster area. What can you do as a service provider? You can submit a bulk request from practitioners for disaster relief, which lists clients impacted due to practitioners location in a disaster area. This alerts the IRS that taxpayer is entitled to relief due to the location of the preparer. While the IRS will not tell you this up front, you should also attach the explanation to your filing. I had several IRS employees tell me this a few years ago when a hurricane knocked out the office power for 10 days in September-October. If you have a POA you can also call the IRS to identify the client.

The sponsor of a retirement plan that yet has no provision for an involuntary distribution desires to provide an involuntary distribution if a participant is severed from employment and her balance is no more than $1,000. The sponsor prefers to limit the plan’s involuntary distribution to the amount specified in Internal Revenue Code § 401(a)(31)(B)(i)(I) because the sponsor/administrator is unwilling to provide for a default-rollover IRA, which would be required if an involuntary distribution is more than $1,000 and the participant/distributee furnishes no different instruction. The plan’s provision would look to whether a participant’s whole account, including her rollover-contributions subaccount, is no more than $1,000. The plan’s governing document uses no IRS-preapproved document. The sponsor would amend the document to state its desired provision (except to the extent a provision would tax-disqualify the plan). Assume all amounts are 100% nonforfeitable. The plan provides participant-directed investment, with a broad range of investment alternatives. Account balances are recomputed every New York Stock Exchange day. For simplicity (and to not resume a June 2020 BenefitsLink discussion), assume the plan incurs no fee for processing a distribution, and a participant’s account incurs no charge that could result in a distribution amount less than the participant’s before-charge account balance. What happens if, between the time the plan’s administrator sends a § 402(f) notice and the form for instructing a direct rollover and the time the administrator would process an involuntary distribution, the participant’s changes from less than $1,000 to more than $1,000? Must the administrator cancel the distribution? What happens if, on the day the involuntary distribution would be processed, the participant’s account balance changes from $999 (based on the preceding day’s funds’ shares’ prices) to $1,001 (based on the funds’ shares’ prices on which shares would be redeemed)? Must the administrator cancel the distribution? How does a recordkeeper do that? If looking to the preceding day’s balance is good enough and the distribution is not canceled, what does the recordkeeper with the breakage between $1,000 and the funds’ shares’ redemption value? How do plans’ administrators and, perhaps more important, recordkeepers deal with this in the practical real world?

I think I see this differently. The 5500 instructions defines "active participant" as follows: ******************* 1. Active participants (i.e., any individuals who are currently in employment covered by the plan and who are earning or retaining credited service under the plan). This includes any individuals who are eligible to elect to have the employer make payments under a Code section 401(k) qualified cash or deferred arrangement. Active participants also include any nonvested individuals who are earning or retaining credited service under the plan. ******************* Only reference is to employee service and not dependent on having benefits in the plan. So a profit sharing plan where a participant never got a contribution allocation is a participant for 5500 purposes. I've been doing it this way.

Personally, I'd prefer to have all force-outs go to a default IRA. Cash-outs are notorious for going uncashed, which creates the headache of stale checks, withheld taxes, and so on. For purposes of this discussion I'm not going to go into the constructive receipt issue. It is very simple to select a default IRA provider these days, and they do most of the heavy lifting for you. It's also often at no cost to the sponsor. @Peter Gulia is the client concerned about liability for selecting and monitoring the default IRA provider? Or is there another reason for wanting to stay away from them?

Obviously, you communicate with the PEP. The mechanics are, your prospect's portion of the PEP will be spun off into a single employer plan. It's definitely doable.

The only issue with not making substantial and recurring contributions to a PS plan is vesting, IMO. You do not have to amend/freeze.

Sorry about your Mets after this weekend.... Truing up the match depends on: a) What does the plan document say about the calculation of the match? If THAT says it's a payroll by payroll calculation, then there's no truing up. If the plan says it's an annual calculation, but it just happens that the client funds it ongoing week to week, then a true-up will be necessary. b) Is the person opting to contribute partway through the year someone who was already eligible all year long, or is the midyear point their actual plan entry date? This only matters if the answer to (a) is that you have to true up, and then if so, you'd go back to the later of 1/1 or their actual plan entry date. c) Whether the plan defines compensation as the full year's worth, or just from after the participant's entry date. As for the compensation, it's not unheard of to adjust like that, but you obviously have to run a 414(s) compensation inclusion ratio test. Who, besides sales staff, would have commissions, though? You have to sell something to get a commission

Ignore the pay beyond the 401(a)(17) limit in every single year. His formula will be based on 290. But his 415 limit will be based on an average of 280+285+290, so depending on if this is a max accrual formula there could be an override in play. Does your plan document's definition of Compensation or Average Compensation have language referencing 401(a)(17)?

Here’s the Treasury department’s 1960 interpretation. 26 C.F.R. § 1.401-1(b)(2)-(3) https://www.ecfr.gov/current/title-26/chapter-I/subchapter-A/part-1/subject-group-ECFR6f8c3724b50e44d/section-1.401-1#p-1.401-1(b)(2). One might interpret this interpretation, including by considering coverage, nondiscrimination, and top-heavy rules as they apply for the years involved.

The CB plan will need two Schedule SBs for 2022's filing, but otherwise, the SECURE act does let you skip the first year's filing on a post-year-end adoption.

Question 10a of the EZ pertains to information that would be taken from the SB.

It seems like yet another gray area. This link might get you in the right direction or it might get you deeper in the weeds. That is IRS guidance seems to be less than crystal clear. https://benefitslink.com/cgi-bin/qa.cgi?db=qa_who_is_employer&n=106

If you are asking if they can be excluded from your testing and pretend like they don't exist the answer is no. If you are asking how to cover them, Peter has better guidance above.

If one assume the Labor department’s rules about due dates for Form 5500 reports and summary annual reports are not contrary to law, the rule calls an administrator to furnish the SAR “within nine months after the close of the plan year.” 29 C.F.R. § 2520.104b-10(c) https://www.ecfr.gov/current/title-29/subtitle-B/chapter-XXV/subchapter-C/part-2520/subpart-F/section-2520.104b-10#p-2520.104b-10(c). The Treasury department’s Saturday-Sunday-holiday rule applies to “the performance of any act” required or permitted “under authority of any internal revenue law[.]” 26 C.F.R. § 301.7503-1. For a pension plan’s Form 5500 report, the Labor department made no similar rule. But the three-agency Instructions for a Form 5500 report include the Saturday-Sunday-holiday rule. I’m unaware of any Labor department rule that allows a Saturday-Sunday-holiday grace for furnishing a summary annual report. For a report on a plan that ended its accounting year on December 31, 2021, I’d advise the administrator to furnish the SAR today. That said, if the administrator furnishes the SAR next Monday, one wonders that an EBSA investigator reviewing that conduct might prefer not to challenge the timeliness of that SAR (unless there are further reasons to find fault with the plan’s administrator, or its service provider).

While I don’t know your client’s and its plan’s provisions, other facts, and surrounding circumstances: Consider the possibility that an employer’s contribution might be delinquent or past-due for one or more government-contracts purposes, but not necessarily a prohibited transaction under ERISA § 406 or Internal Revenue Code § 4975. Also, if there is a nonexempt prohibited transaction, consider exactly which person must file Form 5330. If the plan’s administrator is not the same person as the employer, consider that the person liable for the excise tax might be the one that must file Form 5330.

The rule’s first sentence calls for a lifetime-income illustration “[a]t least annually[.]” 29 C.F.R. § 2520.105-3(a) https://www.ecfr.gov/current/title-29/subtitle-B/chapter-XXV/subchapter-C/part-2520/subpart-F/section-2520.105-3#p-2520.105-3(a). Even in the rule’s context, the use of the word “annually” in that sentence is ambiguous. Although it is not the situation you ask about, the statute calls for a pension-benefit statement (of which a lifetime-income illustration is an element) “at least once each calendar year to a participant or beneficiary who has his or her own account under the plan but does not have the right to direct the investment of assets in that account[.]” ERISA § 105(a)(1)(A)(ii), unofficially compiled as 29 U.S.C. § 1025(a)(1)(A)(ii) (emphasis added) http://uscode.house.gov/view.xhtml?req=(title:29%20section:1025%20edition:prelim)%20OR%20(granuleid:USC-prelim-title29-section1025)&f=treesort&edition=prelim&num=0&jumpTo=true. Even if a plan’s administrator must furnish statements quarter-yearly: “In the case of pension benefit statements described in clause (i) of paragraph (1)(A), a lifetime income disclosure under clause (iii) of this subparagraph shall be required to be included in only one pension benefit statement during any one 12-month period.” ERISA § 105(a)(2)(B) (flush language) (emphasis added), unofficially compiled as 29 U.S.C. § 1025(a)(2)(B). Also, the statute provides: “In no case shall a participant or beneficiary of a plan be entitled to more than 1 statement described in subparagraph (A)(iii) or (B)(ii) of subsection (a)(1), whichever is applicable, in any 12-month period.” ERISA § 105(b), unofficially compiled as 29 U.S.C. § 1025(b). While the statute’s text is unclear, a fair reading should consider the statements’ intervals and dates, not when a statement is delivered or furnished. To implement lifetime-income illustrations for a plan for which the administrator regularly furnishes quarter-yearly statements, I’d suggest the administrator decide which of a year’s four statements regularly gets the illustration, and then regularly follow that course year after year. Neither a court nor the Labor department should find that an administrator violated ERISA § 105 because a delivery of an illustration was more than 12 months after the delivery of the preceding illustration if the statement dates the illustrations are grounded on are only 12 months apart.

I agree with Bird on measuring the 12-month period, but wouldn't a 12/31/23 statement sent on 3/31/24 be late under the 45-day period in DOL FAB 2006-3? In either case, if you sent the 12/31/22 statement on 2/10/23, then sent the 12/31/23 statement on 2/11/24, I think you're still fine.

I think any reasonable person would interpret "in any 12-month period" as referring to the period, not the actual date of the statement. If not, they'll have to get over it. It's not on my worry list.

Agreed. Same.

And additional discussion here:

And chance they are parting on reasonably good terms and keeping the terms of the individual plans and coverage the same through the end of the year? Can you take advantage of 410(b)(6) transition rule and and continue to test them together through the end of the 2022 plan year?

Must a domestic-relations order relate to a domestic-relations proceeding? At least one court found that because neither of two spouses had asked the court for a divorce, annulment, separation, or other domestic-relations relief, there was no matter that could call for an order a plan might treat as a QDRO. “[A] QDRO is a procedural right derivative of or adjunct to a domestic relations matter, but outside the context of a domestic relations matter, a QDRO is not a distinct, discrete legal claim. . . . . [W]e hold that absent a divorce or other domestic relations matter pending between spouses, they cannot obtain a QDRO for the sole purpose of moving funds in the participant/spouse’s [retirement] plan out of the plan to the non-participating spouse[‘s IRA].” Jago v. Jago, 2019 Pa. Super. 246, 217 A.3d 289, 297 (Pa. Super. Ct. Aug. 19, 2019) https://casetext.com/case/jago-v-jago?sort=relevance&resultsNav=false&q=. The opinion reflects the trial and appeals courts’ reasoning because only one attorney appeared, and he presented the argument for allowing the domestic-relations order. At least one bit of the US Labor department’s nonrule guidance states somewhat different reasoning, but finds a similar conclusion. “[I]t is the view of the Department of Labor that Congress intended the QDRO provisions to encompass state community property laws only insofar as such laws would ordinarily be recognized by courts in determining alimony, property settlement and similar orders issued in domestic relations proceedings. We find no indication Congress contemplated that the QDRO provisions would serve as a mechanism in which a non-participant spouse’s interest derived only from state property law could be enforced against a pension plan.” ERISA Advisory Opinion 90-46A (Dec. 4, 1990), https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/advisory-opinions/1990-46a.pdf But an agency’s document that is not a rule or regulation (and usually is made with less process than a notice-and-comment rulemaking) is an interpretation a court need not defer to; instead, it gets only “respect” and only if the interpretation is persuasive. For example, Christensen v. Harris County, 529 U.S. 576 (May 1, 2000) (rejecting an argument that the Court should give Chevron deference to a Labor department opinion letter); Bussian v. RJR Nabisco Inc., 223 F.3d 286, 25 Empl. Benefits Cas. (BL) 1120, 1127-1128 (5th Cir. Aug. 14, 2000) (rejecting the Secretary of Labor’s argument that the court should give Chevron deference to a Labor department interpretive bulletin). A retirement plan’s administrator or a reviewing court might construe or interpret the statute differently than either of the two interpretations mentioned above. Beyond the merits of whether the court’s order is or isn’t a DRO, a plan’s administrator might want its lawyers’ advice about whether the plan’s governing documents provide deference to an administrator’s decision about whether a court’s order is a QDRO or even a DRO. Further, a plan’s administrator might want its lawyer’s advice about the extent to which a court should or would defer to the administrator’s plausible interpretations of the plan’s governing documents (including interpretations of ERISA sections 3, 205, 206, 404, and 514) and discretionary findings.

Maybe not quite on-point, but an example from a defined benefit plan we terminated a few years ago. Participant's estimated lump sum when distribution election forms were handed out was less than $5,000, so spouse consent form was not included. When final distributions were processed, lump sum distribution was more than $5,000. Plan termination was audited by the PBGC. They asked why there wasn't a spouse consent for this participant. Explained timeline of what happened, and they said OK and didn't ask for anything else.

Why not have the new entity be an adopting employer than remove the old entity after it shuts down?

Agreed. Just tell him to make sure the entities overlap in existance.

He probably should, even, just to avoid the successor plan issue. If he's 100% owner of both entities they're clearly related.

They are part of the total plan assets. There is no distinction between employee and other on the 5500.

The original entities would still be a single employer for plan purposes. Just because unrelated employers are added doesn't change the original entities from a single employer to a closed MEP. Sounds like you originally had a single employer plan. and now you have a single employer(comprised of the original entities) plus a bunch of new entities that make it an open MEP.