Leaderboard

Understand wha ...SQUIRREL - LTPT.... oh yea - audit requir ...SQUIRREL -Roth employer contributions ... Yea, I get it, money savin ...SQUIRREL - PLESA accounts... Yea. Not much else going on....

10/15 for calendar year plans. Cut & pasted 1.415(c)-1(b)(6) below: (B) Date of employer contributions. For purposes of this paragraph (b), employer contributions are not treated as credited to a participant's account for a particular limitation year unless the contributions are actually made to the plan no later than 30 days after the end of the period described in section 404(a)(6) applicable to the taxable year with or within which the particular limitation year ends. If, however, contributions are made by an employer exempt from Federal income tax (including a governmental employer), the contributions must be made to the plan no later than the 15th day of the tenth calendar month following the end of the calendar year or fiscal year (as applicable, depending on the basis on which the employer keeps its books) with or within which the particular limitation year ends. If contributions are made to a plan after the end of the period during which contributions can be made and treated as credited to a participant's account for a particular limitation year, allocations attributable to those contributions are treated as credited to the participant's account for the limitation year during which those contributions are made.

Yeah, sort of like what we'd do if cross testing was eliminated as an option.

They already are. Mass layoffs. Auditors jumping out of windows (ground floor only - they are a conservative lot). You know, all the stuff that proves this was a good idea! Just kidding, of course (about mass layoffs, etc.) Some of my good friends are (or should I say "were") plan auditors....

I think your terminated NHCE is nonexcludable. You can treat a terminated employee as excludable if they terminate in the current year and worked less than 500 hours, and only if they did not benefit in the plan solely because they terminated with less than 500 hours. In your case they worked more than 500 hours so they have to be included in your coverage and nondiscrimination test. If the plan has a last day requirement to receive a contribution, then you will either need to rely on a 410(b) failsafe (if the plan has one) or do a 1.401(a)(4)-11(g) amendment to waive the last day requirement for this employee.

This is really a HUGE deal. Why isn't this garnering more attention? I have many clients with 100+ eligible employees and under 50 participants with balances. They are going to save a bundle!

We just recevied 3 notices and the tax was paid in full on all 3. Each of the 3 plan sponsors' IRS Notice is assessing a 10% penalty for "failure to make a proper federal tax deposit.." They were all paid through the EFTPS system on time. Any updates on this? I suppose I will have to waste time calling the IRS.

A2 - correct A1 - I am not sure. In my opinion it would become PBGC covered. It is probably one of those situation when you would want to ask PBGC to rule on that.

Just for the fun of it, let's do some role-playing: Has anyone discussed with the plan sponsor why there is whole life insurance in a qualified plan? The audience here does not need to know, but the sponsor should know the limited circumstances under which such insurance is useful in a plan. Hint: "the agent (brother-in-law?) recommends it" is not a valid reason.

Indeed they did! ARA GAC was one of the stakeholders pushing this after LTPT in S 1.0, so I count this as a big win for our advocacy folks. Its not always instant results, but this is big one. We have plenty of plans that will drop out of audit because of it.

ERISA § 103(a)(3)(C) [29 U.S.C. § 1023(a)(3)(C)] and 29 C.F.R. § 2520.103-8 speak in terms of what an independent qualified public accountant’s examination and report “need not extend to[.]” And the rule can apply not only if all, but also when only some, of the plan’s assets were “held by a bank or similar institution or insurance carrier[.]” 29 C.F.R. § 2520.103-8(b) https://www.ecfr.gov/current/title-29/subtitle-B/chapter-XXV/subchapter-C/part-2520/subpart-C/section-2520.103-8#p-2520.103-8(b). The AICPA Auditing Standards Board’s Forming an Opinion and Reporting on Financial Statements of Employee Benefit Plans Subject to ERISA recognizes this: SAS 136 ¶ 8: “When [the plan’s administrator] elects an ERISA [§] 103(a)(3)(C) audit, as discussed in paragraph 7, the audit need not extend to any statements or information related to assets held for investment of the plan (hereinafter referred to as investment information) by a bank or similar institution or an insurance carrier [if all § 103(a)(3)(C) conditions are met].” SAS 136 ¶ 34: “Plans may hold investments in which only a portion are covered by a certification by a qualified institution. In that case, the auditor should perform audit procedures on the investment information that has not been certified.” The implementation guidance and illustrations suggest an IQPA’s report might need notes to communicate clearly about which investment information was certified, and which was not.

Two of our clients received these notices, both dated February 13. One is for 2019 and one is for 2012 (a year in which there were no distributions at all from this plan)!

Just curious as to why the participant didn't say something for TWO YEARS? I'm not sure I'd want to hang my hat on this but our statements and other confirms say after two notices that evidence the error everything is presumed to be "correct."