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Just unfreeze it, grant a small accrual, the re-freeze it. Would need to be careful about discrimination if there are NHCEs not getting a comparable increase in their accrued benefit. I believe the 415 increase is considered a new accrual that would need to be tested.

I should point out as well, it is not at all uncommon for these audits not to be done by the 15th. Through no fault of our own (as the TPA) and despite the CPA's very best intentions and efforts, these audits do not get done in time. I think it is generally accepted as the norm to file the form sans audit report and get it done and amended and filed as soon as possible. You might get a DOL letter before you are able to amend but that usually says you have 45 days to comply. So I agree you're not going to have an audit done by 10/15th but I've rarely (not never) seen actual penalties imposed for delay. Many years ago my advice was to NOT file and then use the DFVC program later in liue of filing a 5500 that was known to be deficient. I was in the clear minority on that position due chiefly to the fact that everyone else was filing on time without the audit report. If the 5500 is filed without the report I can confidently tell you, your client will have a lot of company.

Listen to what austin3515 says about how your software might react to a report that would be logically internally inconsistent. Eighteen or as few as 15 business days remain before October 15. (Federal, State, NYSE, and religions’ days vary.) Most CPA firms with a capacity for employee-benefit plan audits long ago stopped accepting engagements for 2023 audits. But with a relationship plea and a rush fee, a plan’s administrator still might engage an independent qualified public accountant. About what Form 5500 report (if any) a TPA might prepare (or decline to assemble), a few suggestions: 1. Read, carefully, your service agreement to know your rights, obligations, and conditions. 2. Even if it is the plan’s administrator that must sign the report, don’t assist a false or misleading statement. 3. Be careful with anything your client might alter or misuse, especially if it has your name associated with it. 4. CYA—Cover Your Assets. This is not advice to anyone.

Just as you have in the past, send a letter letting the IRS know that the 5558 was timely submitted with the packet that was mailed on 7/30. If you want to send them your screenshots too, send the screenshots. I'm sure you know it wouldn't be wise to say you've misplaced or inadvertently deleted anything. Just let them know that the 5558 was mailed timely, and request a penalty abatement and all should be fine - as always.

I find it hard to believe that in the face of overwhelming evidence they would have no choice but to concede. Perhaps if you send them a screenshot of this post, with the Austin Powers, confirming they need the audit, they will realize the foolishness of their ways. I feel like this question is akin to the follwing: The client says "2 + 2 = 5" please proceed accordingly. IT's unsolvable equation and therefore it's impossible to suggest the proper path. If you file the 5500SF with 135 balances I assume the DOL would flag it as invalid in need of an audit (seems to be a pretty basic check, even the software validations should flag that). And if you file the large 5500 without the audit, it's only a matter of time before the DOL comes calling for sure. So again, this is the unsolvable equation.

First of all, do you feel confident you're meeting the other prongs of the DOL's voluntary plan safe harbor? They're notoriously difficult to satisfy--especially the "no endorsement" piece. As to your specific question, I agree with Peter that it matters whether the life plan is employer or employee-paid. If it's employer-paid basic life, I would see that as consideration to the employer that blows the safe harbor. There are probably other cases out there addressing this issue, but here's an example of a court grappling with something similar and finding it didn't blow the safe harbor: https://law.justia.com/cases/federal/district-courts/FSupp/849/1451/2139942/ Determining whether the life insurance plan meets the fourth criterion, whether AFC received any consideration in connection with the life insurance program, is also a close question. AFC did not receive any compensation for payroll deduction services from the life insurance plan. However, when employees signed up for the insurance plan, AFC received tax savings from their simultaneous participation in the cafeteria plan. AFC also saved the expense of having its own managers go to its various divisions and explain the cafeteria plan; Metropolitan Life agents went to the various divisions instead at the expense of Metropolitan Life. The court is nevertheless convinced that benefit AFC received was too indirect and tenuous to conclude that the Metropolitan Life plan falls outside the safe-harbor regulation. Here's an overview of the voluntary plan safe harbor generally: https://www.newfront.com/blog/the-erisa-voluntary-plan-safe-harbor Slide summary: 2024 Newfront ERISA for Employers Guide