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Facts and Circumstance on whether a new issued notice over riding the prior notice would be considered timely. The more documentation that you can detail that employees received the updated notice and had an effective chance to change their deferral election before 1/1, the more likely you are to be OK under a facts and circumstance determination. But yes you're past the "safe harbor period" for providing the safe harbor notice.

Anyone else tried playing around with the ChatGPT AI system by asking employee benefits questions? Not perfect, but you can definitely see where this is heading. https: //chat.openai.com/

If this is a DC plan (as Luke tells us), there is the presumption that the entire account balance is the death benefit, payable to (at least) one beneficiary. Therefore, this is the amount that could be transferred to a court; no more, no less (unless I have overlooked some unusual circumstance). However, one of those unusual circumstance is that some DC plans include J&S payment forms; these are precisely the plans where the original B vs. C "conflict" could be relevant, so the precise death benefit is not knowable.

I don't think a distribution has occurred in the first place; there has been no transfer of the payable benefit to the participant(beneficiary(s)), another plan, or the PBGC. The recipient does not have use of the funds. The transfer to the court is to protect the value of the benefit and not expose it to undue market risk while the question is settled. I would view the court as another custodian of Plan assets and continued to report it as an asset of the Plan. At most, you could deem it as a payable and report the liability since the amount to be paid is known if its a DC plan. @david rigby what amount would you even transfer for a pension benefit that is nothing more than an IOU until the moment it's actually paid? Would you just grant the court a subordination agreement and then possibly escrow a 'reserve' amount that gets recalculated on each valuation date until actual payment?

Some audit delays result because the plan’s administrator failed to furnish, or cause to be furnished, information the accounting firm reasonably requested. And some delays result because the auditors uncover a nonexempt prohibited transaction, fiduciary breach, serious error or omission in the plan’s financial statements, lack of control, or other point that precludes rendering a “clean” report. But if the delay truly and fairly is the accounting firm’s fault, hinting at the accounting firm’s liability exposure for its client’s penalties sometimes can be a way to motivate auditors to finish their work and release their IQPA report. In my experience, there are ways a client might politely and deftly hint.

Found this in the IRS website: Exceptions to the 10% Additional Tax Distributions that aren't taxable, such as distributions that you roll over to another qualified retirement plan, aren't subject to this 10% additional tax. For more information on rollovers, refer to Topic No. 413 and visit Do I Need to Report the Transfer or Rollover of an IRA or Retirement Plan on My Tax Return? There are certain exceptions to this 10% additional tax. The exceptions below apply to distributions from a qualified plan other than an IRA. For a complete list, look at the Appendix for Notice 2020-62PDF. Distributions made to your beneficiary or estate on or after your death. Distributions made because you're totally and permanently disabled. Distributions made as part of a series of substantially equal periodic payments over your life expectancy or the life expectancies of you and your designated beneficiary. If these distributions are from a qualified plan other than an IRA, you must separate from service with this employer before the payments begin for this exception to apply. Distributions to the extent you have deductible medical expenses that exceed 7.5% of your adjusted gross income whether or not you itemize your deductions for the year. For more information on medical expenses, refer to Topic No. 502. Distributions made due to an IRS levy of the plan under section 6331. Distributions that are qualified reservist distributions. Generally, these are distributions made to individuals called to active duty for at least 180 days after September 11, 2001. Distributions that are excepted from the additional income tax by federal legislation relating to certain emergencies and disasters. Distributions up to $5,000 made to you from a defined contribution plan or an IRA if the distribution is a qualified birth or adoption distribution. Distributions made to you after you separated from service with your employer if the separation occurred in or after the year you reached age 55, or distributions made from a qualified governmental benefit plan, as defined in section 414(d) if you were a qualified public safety employee (federal state or local government) who separated from service in or after the year you reached age 50. Distributions made to an alternate payee under a qualified domestic relations order. Distributions of dividends from employee stock ownership plans. Refer to Topic No. 557 for information on the tax on early distributions from IRAs. For more information, refer to Publication 575, Pension and Annuity Income and Publication 590-B, Distributions from Individual Retirement Arrangements (IRAs).

I just received this same communication via email last Friday. I forwarded to the accountants in hopes that this will push them to finish the audit instead of dragging their feet.

In 2017, the Internal Revenue Service issued to its employees (with releases to practitioners and the public) guidance directing IRS examiners not to challenge a plan as failing to meet a § 401(a)(9) provision if the plan’s administrator was unable, after specified efforts, to locate the should-be distributee. While it is only my reasoning, a plan should not be expected to pay a minimum distribution when the identity of the would-be distributee is unknown. Further, even without ERISA’s stronger protections, a plan with a provision to meet Internal Revenue Code § 401(a)(2) must be administered for the exclusive benefit of the participant’s beneficiary. It is not proper to pay someone who is not the participant’s beneficiary. missing participant or beneficiary minimum-distribution memo-for-employee-plans 2017-10-19.pdf

Nothing on point in the Gray Book.

That's a great question. It's really not basic--I've debated this one with ERISA attorneys for years. I've always taken the position that the uniform election rule in the Section 125 nondiscrimination provisions requires that HCPs pay at least as much as non-HCPs for the same plan options. In other words, a contribution structure that charges more to certain non-HCPs for the same benefit does not provide a “uniform election with respect to employer contributions.” So all full-time non-HCP employees eligible for the same plan option as an HCP must be offered at least the same employer contribution amount that is available to the HCPs for that plan. More details: https://www.newfront.com/blog/nondiscrimination-rules-for-different-health-plan-contribution-structures-2 Now there are a couple reasonable arguments that if there is no HCP contribution to the plan, the §125 rules do not apply. One argument is based on the so-called "American Can Plan" approach. However, the American Can Plan proposition I've always understand as there actually not being a Section 125 cafeteria plan in place. That's different in my opinion than arguing the non-highs are using the 125 plan but the highs aren't because they're not required to contribute. Then there's the argument that what happens if you violate the 125 NDT rules with this type of structure. The rules technically provide that the HCPs would lose the safe harbor from constructive receipt, and thereby be taxed on any pre-tax contribution. But there are no pre-tax contributions in this situation. So my argument is essentially that the IRS would try to force them to lose the tax-free premium treatment under §106 as you noted. In short, I've just always thought it is pretty ridiculous to believe the IRS would be ok with highs paying zero, but not with them paying one cent pre-tax. But there's no guidance I'm aware of directly on point. So that's how I advise unless the highs at issue are ineligible for the cafeteria plan, such as more-than-2% S corp owners, K-1 partners, LLC members, etc. In that case I'm fine taking the position that because they're treated as self-employed and therefore ineligible to participate in the cafeteria plan, the employer is prebaby fine providing a larger employer contribution.

The problem is that the law here is not entirely clear, and the IRS has yet to issue any regulations under 404(o) that would provide guidance. The rule is that the liability resulting from any increase on behalf of HCEs which is adopted or effective, whichever is later, within the last 2 years is not included in the cushion amount. The problem is that it is not defined how "last 2 years" is measured. Is it 2 years ending on the valuation date? At BOY? On any date within the plan year? You had an amendment adopted (let's say) 12/15/2021 and effective 1/1/2021 which increased benefits for HCEs. You also mentioned you're using an EOY val date, so that amendment has to be taken into account for the 12/31/2021 valuation (since it was adopted before the valuation date). However the amendment only increased the pay credits, so it would have no effect on the 12/31/2021 funding target, therefore it would have no effect on the cushion amount. For the 12/31/2022 valuation, the 12/15/2021 amendment was clearly within the last 2 years so the increases added by the amendment for HCEs can not be taken into account for the cushion amount. In other words, determine the HCEs' hypothetical account balances as of 1/1/2022 as if the plan was still frozen, and use those to calculate the funding target for your cushion. For the 12/31/2023 valuation it gets tricky. The 12/15/2021 adoption date is not in the last 2 years if you measure from the valuation date, but it would be if you measured from almost any other date in the plan year. What if the amendment had been adopted on 12/31/2021 instead? Then there would be a stronger argument in favor of treating it as being within the 2-year period. A 12/15 vs a 12/31 date would make no difference for almost any other purpose under the Code, so it seems strange that it would make a big difference here. If you want another argument, since the funding target is based on the accrued at the beginning of the year, maybe the 2-year period should be measured from the beginning of the year? The law is unclear.

Another retirement plan’s administrator that filed a Form 5500 report on 2021 without an independent qualified public accountant’s opinion is Trump Payroll Corp., the sponsor and administrator of the Trump Payroll Corp. 401(k) / Profit Sharing Plan. See pdf page 22 of 23. (I didn’t look for this; I stumbled across it while searching for a different plan.) Trump Payroll Corp 401k 2021 5500 20221017112257NAL0029732609001.pdf