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The Starter 401(k) very likely is going to be the darling of fintech. The narrow focus of the design will allow them to create a simplified administrative structure from document signing through recordkeeping, investment, and ultimately distributions with very low overhead. Existing recordkeeping systems are designed to be all things to all plans and have an enormous amount of overhead to anticipate the myriad of ways plans can go off the rails. Take things like employer contributions, allocations, vesting and forfeitures off the table and the technology infrastructure shrinks dramatically. Expect the cost of set up and recurring services to be exceptionally low, and any tax benefits to the employer for starting and operating a plan are an added selling point. The biggest difference with using IRAs for an employer is the Starter 401(k) will have a single payroll feed to a single provider, and will plan level reporting available. Starter 401(k)'s will be available nationwide versus state plans. Starter 401(k)'s will have a much broader market available to them over state plans. Keep in mind that almost half of all businesses (and almost of of them are small businesses) do not have a retirement plan. There's more, and there were advocates who are prepared to implement Starter 401(k)'s that lobbied Congress to make them available.

Hi Peter - off the top of my head (with no other active thought about the subject) I'd say that the thrust of this provision was mostly to keep employers from being forced into the state-run systems which are being implemented by an increasing number of states. I have a hard time seeing other useful purposes, although there likely are some that I haven't considered. Like you, I'll be interested to see what people come up with for situations where it might be the preferred option.

They can file what they filed the previous year or file what is required for the current year. And any plan can voluntarily hire a CPA firm to do an audit whenever they like.

There are a lot of ways for a defined contribution plan to allow in-service withdrawals of vested amounts before retirement, death, disability or other termination of employment. For example, a lot of 401(k) plans allow for in-service withdrawals (including elective deferrals) upon reaching age 59 1/2. Most plans allow in-service withdrawal of rollovers at any time. Vested non-elective employer contributions may be made available for withdrawal of amount that have been in the plan at least 2 years. Plans may make all vested NECs available once a participant has at least 5 years of participation. Most pre-approved plan documents provide a checklist of available in-service withdrawal options. Check your document - you may be pleasantly surprised by the choices.

I agree. There is a learning curve to the EOB that you don't have ERISAPedia. Casual or less experienced users will get more out of ERISAPedia, experienced users can get more detail out of the EOB, like old caselaw or rev procs that is used more sparingly in ERISAPedia.

I agree the EOB is probably the most comprehensive resource around - but I would caution the "casual" user - it presumes you know what you are looking for and are searching for the right thing. In my experience, most of the time, people are asking the wrong questions. We have the EOB as a resource, but we've recently added ERISAPedia's service as well. ERISAPedia allows one to browse a bit more, see things in context, and refine the search. Context is often very important, and it's hard to get that from EOB....

this was the spreadsheet from many moon agos controlledgroup.xlsx

See Section 2A in Notice 2020-50 Guidance for Coronavirus-Related Distributions and Loans from Retirement Plans Under the CARES Act. The gist is the plan could expand the amounts that could be distributed if the plan permitted the distributions, but you cannot pay out amounts that are not permitted to be paid (which I read is like non-vested amounts). The vendor may have gotten creative and allowed payments of a vested portion of an account that was only partially vested (e.g. a partially vested NEC account). That would then require them to use the funky formula to add into the current calculation of a vested amount an add-back of the previously distributed amount. The auditors should look to the vendor to 'splain what they did.

Since the extended due date has not passed, the taxpayer can file a superseded return which will replace the original return. An amended return is one that is filed after the extended due date. Sometimes the IRS will look at an amended return closely, however this would be an easy one to substantiate.

Never a bother, clients do not always like to provide complete/correct information, for whatever the reasons are😀