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I'm missing the point of why this would be desired. If one person owns 100% of both businesses, it is a controlled group. If no employees, why would he want the two plans? One 415 limit, so he can't "double up" on contributions/deduction maximums - he can max out, up to the deductible or 415 limit in the 401(k) plan, including catch-ups if eligible. But if there's some other reason I'm missing, yes, if he uses a non-model SEP, it might be possible, depending on the language in both documents.

I have been asked this question when, and have clients where, the client already has a plan with a different financial advisor, and the client is willing to consider using the services of a second financial advisor. My experience is having two plans with different financial advisors leads to extra overall costs to the client and compliance problems when the client gets conflicting advice from each advisor.

There is no need to split a payroll period that saddles a plan year ending in the middle of the period. Include the entire payroll in the plan year or not. Be consistent. If you include it, you are using accrual accounting. If you don't, you are using cash or modified cash accounting.

You answer "no" (I have seen many people answer yes even without retro coverage, but it would be technically incorrect) Fixed at the beginning of the plan year (ERISA 412(a)) Technically, it should be "no" if you at any point during the year had a plan official handle or deemed to handle funds or property of the plan without adequate coverage*. That said, I have had both IRS and DOL tell plan sponsors to get a current bond if none existed, without requiring retroactive coverage. You report the amount of coverage. This could mean the face amount of the bond, or another amount if the bond has a rider that applies 10% at the time of the claim. So, you could have a face amount of $20k, but with a rider to cover 10%, in which case you would enter the greater of $20k or 10% of BOY assets. Yes. Its one or the other, and you cant file electronically if you answer yes but do not enter a bond amount. * edited for context.

On both a 5500 and an SF, the opening wording to question 4 or 10 (and their a through i or n subsections) says, "During the plan year:" So I don't think you're properly answering the question if you obtain it after the year-end but still suggest it was covered (unless retroactive). And as for the "part of the year" scenario - I think it's reasonable to say that "the plan year" does not specify the entire plan year. Meaning, if you got your coverage on December 31, then the answer of "yes" is a true answer because during the year it was indeed covered. Heck, I'd suggest you get to leave "yes" as your answer if your policy expired on December 30. (Recall on the SF, you're asked if the plan had loans, even if the they're all paid down to zero by 12/31, so you still admit there were loans, even if it wasn't all year long.) As for the dollar amount, I'd use the largest amount of policy in effect during the year. Or if the plan just uses an inflation guard, I'd use the 10% BOY amount.

I think Lou S is definitely on the right track. While 415 excess amounts in a suspense account could theoretically revert (but should be either allocated among all other participants or applied to reimburse administrative expenses, the guidance is that this suspense account is not supposed to linger around accumulating assets. Considering the 415 suspense account with the IRS proposed regs on forfeitures, there is very little wiggle room to go back and apply such amounts to administrative expenses incurred more than one year in the past. Is the client going for a determination letter on plan termination? If so, and there is a sizable amount of assets, you are likely to encounter serious push-back from the IRS.

The problem there is that only some of the weekly interest between 12/28 and 1/4 has actually accrued by 12/31. Does anyone get that crazy figuring it out or do we just say "close enough" and just use the remaining principal balance as of either payment line of the schedule?

Looking at a plan, and it doesn't seem right to me. The plan charges a fee to terminated participants who leave funds in the plan. $100 per ppt per year. The recordkeeper also pays revenue sharing to the TPA. The Revenue sharing now equals or exceeds the TPA fees, and the $100 per ppt per year charge is being put in a "forfeiture" account, and the client is being told to offset required match contribution by the balance in the forfeiture. As Archie Bunker once said, "I smell something stinko in the city of Denmark." This fee doesn't seem to qualify as a "forfeiture" as that term is defined. So, what can be done with these amounts? Maybe I'm being unnecessarily conservative in my viewpoint. What do other folks do?

Roycal, please see https://www.napa-net.org/news-info/daily-news/can-plan-charge-fees-terminated-participants-not-active-ones

I just want to make sure I haven't missed any updated guidance on the following specific items only. Thanks. 1. Only contribution REQUIREMENT is to allow the eligible LTPT to defer. 2. IF the employer chooses to contribute match, PS, SH, (mix and match), to those who are SOLELY eligible due to LTPT rules, these people may still be excluded from coverage, ADP/ACP, and 401(a)(4) nondiscrimination testing. 3. For top heavy purposes, their account balances will be included in the determination if the plan is top heavy or not, but they are not required to receive a top heavy contribution. 4. No gateway required, even if employer chooses to give them profit sharing.

My method has been and remains doing (even for a micro plan, although for them with no fee) a revised summary plan description at least once each year, every year. I typically refresh the SPD each November, just after the IRS releases the inflation adjustments looking to the next year. And I do an off-cycle restatement if there is a change in a plan provision, or something else communicated in the SPD. Such a restated SPD describes not only the provisions stated in what practitioners call “the” plan documents but also provisions not yet written in those documents but “in operation” as the remedial-amendment legal fiction allows. I recognize such a method is wildly impractical if the plan’s sponsor/administrator relies exclusively on its recordkeeper’s or third-party administrator’s or its licensor’s document-assembly engine. For administrators that lack the resources to do it my way, there’s a wide range of business methods recordkeepers and third-party administrators use. Some suggest SPDs; some suggest SMMs. Some key the descriptions to what the plan-documents engine knows. Some include in-operation provisions the plan’s administrator has instructed. And service providers suggest a wide range of ways to schedule these communications. Belgarath, if you seek to avoid a series of summaries of material modifications as each year’s newly applicable provisions arrive, some practitioners suggest one can write a summary that includes not-yet-applicable provisions if the writing is clear about when each provision becomes applicable. However, such an explanation would require the plan’s administrator to know which optional provisions the plan’s sponsor has adopted and, for each, whether the sponsor makes it available with the earliest time relevant tax law allows, or some later applicability time the sponsor specified. An SPD or an SMM describes a plan. A plan’s administrator must not describe a provision the plan’s sponsor has not adopted. But a plan’s sponsor might adopt a provision, at least for ERISA title I purposes, by means much less formal than what practitioners call “the” plan documents.

Sounds like some good Fiduciary Guidance Questions. Assuming the Plan allows for payment of expenses with forfeitures, most do but some do not. I think would be pretty comfortable for non-settlor fees for the current year. I think I might be comfortable with non-settlor fees for the prior year if billed in the current year. I think any further back and you're getting on very thin ice and would want ERISA counsel to opine.

What if a forfeiture balance is used to reimburse the employer for its payment of a proper plan-administration expense? What if it's not only a final-administration expense but some plan-administration from the recent past? If so, how much into the past may the fiduciary reimburse the employer?

I assume you're putting the old EIN in question 4 of the 5500 ez? That would tie to the 5558 anyway. I would do that and wait for a letter. We have to deal with rejected 5558s for no good reason anyway.

I think the ONLY way it can revert is if it cannot be allocated to anyone because of 415 limits and cannot otherwise be used to pay eligible expenses.

Vesting is based upon a 500 hour year for those people forever even if they actually become eligible under the regular requirements

The biggest concern is the use of the expense charge as a forfeiture against the match. That needs to stop ASAP and the plan should consider making a match contribution equal to the sum of any prior offsets. Aside from the TPA fee, does the plan have administrative expenses for other service providers that can be charged to the plan? If yes, and they exceed the revenue sharing amount, this could help clean up the issue. If the revenue sharing is so large that it covers all expenses, then consider allocating the excess to participants as a credit. This could be done on account balance or per capita, and would include the accounts of the terminated participants. Personally, I agree with Bill that a simple approach is to negotiate a reduction in revenue sharing. It will be less work to administer the plan and less likely to attract a suit for having overpriced investments.

If you want TMI, get your favorite beverage and read FAB 2008-04 (18 pages). If you want to see what an EBSA investigator will look at when reviewing a plan's ERISA bond, peruse the Bonding checklist (3 pages). I believe anyone going through the checklist will think of at least one client that likely has a bond that is not compliant. 2008-04.pdf Bonding checklist - EBSA Fiduciary Investigations Program.pdf

Time for the fiduciaries to negotiate a reduction in the revenue sharing.

An employer with less than 100 employees who earned at least $5,000 in 2021 adopts a MEP in 2021. On 6/1/2022 they spin out of the MEP and adopt their own 401(k) plan, covering essentially the same employees. Would I be correct that company's participation in the MEP would disqualify it from the start-up tax credits for any year (2022 or after)? Would I also be correct that assuming the company continues to employee less than 100 employees, they would still be able to qualify for the "Employer Contributions" credit beginning with the 2023 plan year? Thank you.

No offense but that is of course easy to say when its not your money. The business that just laid off 35% of its work force needs every penny to leave the lights on.