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Yes, whether such an arrangement would meet the terms of a particular government (or government-funded) contract turns on the details of the contract, including the laws the contract invokes. But if each individual has a choice between immediate money wages and the employer’s contribution to a retirement plan, isn’t that a cash-or-deferred arrangement? Is it meaningfully different from increasing the employee’s money wages, leaving her with choices about what reductions and deductions she instructs the employer to take from her wages?

Agreed. It also tends to defeat the advantage of a prevailing wage provision in the plan because, if it's a CODA, the amounts are subject to all the FICA, etc, labor costs.

"Confusing" in the sense that you would expect anyone to read 925 words on this subject.

To find court decisions that interpret and apply regarding a retirement plan the United States’ enforcement of a judgment imposing a fine or restitution regarding a crime, a researcher might use a publisher’s annotated version (for example, Westlaw, LexisNexis, Bloomberg Law) of the United States Code. Also, one might use treatises and other secondary sources in Wolters Kluwer’s VitalLaw. One would look for annotations under 18 U.S.C. §§ 3316, 3556, 3663, 3663A, 3664; 28 U.S.C. §§ 3001-3308. To learn some arguments that were presented and rejected, one might read a Second Circuit decision BenefitsLink posted. https://benefitslink.com/src/ctop/us-v-greebel-2dcir-08242022.pdf The participant, Evan Greebel, was a partner in Katten Muchin Rosenman LLP. He was represented by Gibson, Dunn & Crutcher LLP. The appeals court held that the Mandatory Victims Restitution Act authorizes garnishment of the convict’s retirement plan account, and that the Consumer Credit Protection Act’s 25% limit on a garnishment does not apply. The appeals court did not decide whether the extra 10% tax on a too-early distribution is imposed on garnishment. If an effort an ERISA-governed plan’s administrator, trustee, or other fiduciary might consider would be at the plan’s expense, the fiduciary might want its lawyer’s advice about how much effort and expense is loyal and prudent for the plan’s exclusive purpose of providing the plan’s retirement benefits.

I've been watching this issue for many years. I will only say generally that the tide of the cases seems to be in favor of MVRA enforcement against 401(a) plans. I'm pretty sure that if there had been any guidance or case law going the other way in the last 5 years, I would have noted it, but I don't think there has been any. Very recently MVRA was enforced in connection with a Shkreli/"Pharma Bro" case. You might want to Google it, Nate S.

The IRS position is that the tax treatment of distributions received in a prior tax year does not change because the retiree received and had use of the funds. Any repayments of prior distributions in the current year can and should offset any otherwise taxable distributions paid in the same tax year. Any additional amounts repaid above and beyond current year distributions (or if it was a lump sum that was paid in a prior year and no future payments are being made) may be deducted under IRC Section 165(a) as a miscellaneous expense to the extent such amount exceeds 2% of AGI. See IRS Revenue Ruling 2002-84. This is not tax advice, the parties-in-interest should consult their own respective qualified tax advisors. However, they should confirm that current year distributions will be offset by current year repayments on current year 1099Rs.

You'll probably need to check the definitions/thresholds in the specific state statute creating the program, which can be tied to things like the number of employees reported to the state's employment agencies, etc.

There is no guidance from the IRS on how to test merged plans. If the two plans have the same plan year, it makes more sense to test the deferrals together for the entire year -- e.g., plan 1 has a calendar year; plan 2 has a calendar year; merger date is 7/15/2022 - take all 2022 deferrals/comp from plan 1 and all 2022 deferrals/comp from plan 2 and test them together in one big test. the justification for this is that the surviving plan "owns" all the assets/liabilities of both plans for the entire year. Again, no guidance, but i've spoken with IRS people on the dais at several conferences, and they have always said this is a reasonable interpretation. If the plans had different plan years, I'd test the disappearing plan for the "short year" as you suggest (and I agree with the correction deadline), and then test the surviving plan for the entire year with the merged-in participants being like new entrants for the period between the merger date and the end of the year. One more thing ... if the two plans are PRIOR year tested, there IS guidance on how to do it in the regulations. You do a weighted average of the prior year ADRs for the two plans. FWIW. :)

Yea this is the answer I'm looking for as well. I have never been a fan of the "attach a statement saying the audit isn't ready just to get it through EFAST" approach, but the fact that DOL has to give you 45 days to fix it has had me use it on occasion. If the DOL is sharing their data with IRS (who is not required to hive 45 days) that really does change things up a bit. I don't mind a change, I just want to know best practice of addressing the issue going forward.