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A lot of people have wondered about how to count participants for purposes of determining whether an audit is needed, and applying the rules to the first plan year has always been, shall we say, counterintuitive. First, we should understand that these counting rules are not IRS rules. They are DOL rules appearing in 2510.3-3(d)(1)(ii): (ii) An individual becomes a participant covered under an employee pension plan— (A) In the case of a plan which provides for employee contributions or defines participation to include employees who have not yet retired, on the earlier of— (1) The date on which the individual makes a contribution, whether voluntary or mandatory, or (2) The date designated by the plan as the date on which the individual has satisfied the plan's age and service requirements for participation For a new plan, look at the employees who satisfied these eligibility requirement on the effective date of the plan to do the count and note that this has nothing to do with whether an employee gets an allocation of a contribution later in the year.

Unfortunately, the LTPT vesting service rules have no such restriction.

Since the issue has to do with plan documents, it should be reported to the IRS. The IRS has forms (of course they do, and are we surprised?) for reporting improper activities. One such form is Form 3949-A Information Referral where you might check the box for False/Altered Documents. Another is Form 14157 Return Preparer Complaint where you might check the box for False Items/Documents (False expenses, deductions, credits, exemptions or dependents; false or altered documents; false or overstated Form W-2 or 1099; incorrect filing status). Copies of these forms are attached. f3949a.pdf f14157.pdf

Agreed.

This is the right answer for a 2022 Plan Year.

I must admit I was totally speechless when I saw what was done. Both the Client and FA (Financial Advisor) were like, did you approve this? I look at it and said no way, and pointed out several areas where we actually stated in earlier letters and the actual cover letter used to forward the documents, that the dates he tried to put in would be incorrect if used. While I can't talk for the Client, the FA has an incredible dislike for this attorney, which has been voiced on several occasions. I can't say whether the attorney claims to be an ERISA Attorney, but I can say from my experience this guy wouldn't even pass an intro course. He is that bad, IMHO. Also, thanks for the kind words. I am a big believer in full and open documentation, which has served me well over the past 39 years. But I must admit, the mere fact that the attorney made the changes and then forwarded to the Client using the actual letter I originally sent saying the dates he wanted to use could not be use, was pure foolishness. (He did use another brief letter over mine that just said use this version.) Like saying here are the documents from the TPA. Oh, and ignore his comments about the dates being used are wrong in his letter! Amazing!

Gilmore, your recollection is correct. Section 112(b) of the original SECURE Act states that only eligibility computation periods beginning on or after January 1, 2021, are taken into account in determining part-time employees' eligibility.

An individual who is eligible to participate in the plan "solely by reason of being LTPT employee" will be the lucky winner of the 500 hour requirement for vesting purposes. Since LTPT employees aren't recognized prior to 2021, I don't see that service prior to 2021 would apply. I am, of course, using logic here. One never knows whether logic applies with our regulatory agencies . . .

My favorite definition of chutzpah is a child who murders both his parents, then throws himself on the mercy of the court because he's an orphan. As to the more important issues here, aside from the possible illegalities or violation of professional conduct codes, (about which I know nothing) it is a shocking breach of general professionalism and common courtesy. P.S. - I'm guessing that this attorney is not an ERISA attorney? I find it hard to even imagine that an ERISA attorney would take this stance, but I'm not an attorney, so maybe such an opinion is justifiable somehow from a legal standpoint - I'm not qualified to judge. Sounds to me like you did everything you could from your end, properly and professionally! Thankfully, your client had the trust to bring you into the loop rather than blindly following the attorney's pathway.

Report the attorney to the proper authorities, totally illegal. Unbelievable.

It sounds as if this attorney is going to wind up "working for the man" breaking rocks in the hot sun!

Just as an update, and maybe a laugh. Anyway, we did documents for the termination of the Plan, using proper dates, etc... Would you believe the attorney revised the dates in materials to use the retroactive date that he was recommending. Luckily, it is well documented that we used proper time frames and such, so we easily put the kebosh on that! Client understands the "reality of the situation" so termination is being done properly as we processed. For "venting", doesn't it just roast your butt when some "outside expert" comes in and acts like they know it all, and then they actually modify the work that you did to reflect their error, and then send to the Client as if we made the changes? As I said earlier, I don't claim to know everything, but one thing I would never do is modify someone else's work WITHOUT DISCUSSION OR EVEN NOTIFICATION, and then try to pass it off as the work of that other person. We wouldn't have even known if the Client didn't send us a copy of what the attorney changed and sent to the Client asking us if this was correct! We, of course, were not even copied on that mailing. It just went to the Client under a short cover letter that said "use this version". I don't know, but that seems that someone has a bit too much chutzpah, and at best, is not someone we should ever work with again since they change our work and send to the client as if we agree with the change! I can only say I would never do something like that. Isn't that illegal?

NO! See Q 33a EFAST2 FAQ