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It's probably merely a warning, not an actual error. If you have read the instructions and you are confident that you are eligible to file Form 5500 (and not required to file Form 5500-EZ) then I would say proceed.

Without reading the health plan (including its provisions for the plan’s or the employer’s equitable liens and other recovery rights), the employer/administrator’s contract with its third-party administrator, and the stop-loss insurance contract (if any), it’s hard to know what set of compromises, satisfactions, and releases might make sense. If anyone would release or compromise a claim that belongs to the plan: Consider whether the analysis and decision-making must or should be done by a fiduciary who is independent of those who breached a duty to furnish documents and those who might have breached a duty to oversee or monitor other fiduciaries. Consider whether advice must or should be from a lawyer who advises only the plan and is sufficiently independent of the possibly breaching fiduciaries. Consider whether a settlement needs prohibited-transaction relief, whether under PTE 2003-39 or in some other way. If the plan might have claims against the possibly breaching fiduciaries, the employer with its counsel might evaluate whether the conduct was within or beyond the standard (usually, in or not opposed to the employer’s interests) for the employer’s indemnification provided to its executive and employees asked to serve as the plan’s fiduciaries. Yet, consider too whether the employer’s obligation to fund the self-funded health plan washes the plan’s loss that otherwise might be a subject of the plan’s claim against a breaching fiduciary. These points might seem odd if the employer provides most of the plan’s funding. But it’s useful to analyze all the roles and relations, including recognizing the health plan as a distinct person, even if that results in finding that the employer exclusively or primarily is dealing with the employer’s money. It’s much better to have a written analysis showing the plan suffers no loss or harm because the employer is obligated (and has financial capacity) to meet everything that could have been recovered from the participant. This is not advice to anyone. Class Exemption to release claims 2010-14381.pdf

I didn’t suggest that an ERISA-governed plan’s administrator has a duty or obligation to consider a State’s law (other than a court’s domestic-relations order submitted to the plan’s administrator). Rather: “ERISA’s supersedure of States’ laws makes it unnecessary for an employee-benefit plan’s administrator to know, or even consider, any State’s law.” And “Section 514(b)(7)’s limited exception regarding a qualified domestic relations order or qualified medical child support order might call a plan’s administrator to read an order’s text, but one need not know the State’s or Tribe’s law underlying the order.”

I think I'd rather be arrested than have to see a plan become disqualified 😆

from the EZ instructions "You can obtain the official IRS printed 2023 Form 5500-EZ from the IRS to complete by hand with pen or typewriter using blue or black ink. Entries should not exceed the lines provided on the form. Abbreviate if necessary"

If you have access to "Who's the Employer" by Derrin Watson, I have found it to be a very valuable and accessible resource for researching these kinds of questions. The original question was about attribution of ownership for HCE determination purposes; keep in mind that HCE determination uses attribution under section 318. IRC 318(a)(2)(B) contains rules about attribution of ownership from trusts.

From the 5500-SF instructions:

As a Florida based practitioner, I have been through this many times. While then IRS is supposed make the determination based on zipcode, they still sent proposed penalties to many in the disaster area. It has been hit or miss for years. Sometimes the IRS love letters show up before the extended due date, some times they show up after you file. You can send the IRS a flash drive with a list of clients affected by the disaster, but I have found that this doesn't help much. Things that work more often than not: Put the FEMA disaster declaration in the "Special Extension" description. This will be disaster and state specific. For example, DR-2848-FL is the Florida disaster declaration for Helene. Add an "other attachment" to your filing and attach he IRS disaster notice to your return. You won't find this in the instructions or any of the communications, but I have been told by both IRS and DOL staff that this will reduce the chances of an agency follow up. If you are using YOUR location as a reason for the extension, use an "other attachment" to add the explanation that while the client was not in the disaster area, the practioner was, and that is why this client is entitled to the extension. I hope this helps.

Frozen does not necessarily mean no contribution requirement. Even if the assets exceed the funding target right now, and the target normal cost is zero due to no benefits accruing, you could be subject to a minimum contribution in the future due to changes in interest rates and/or fluctuation in the value of assets. The plan is still subject to 430, and still required to have a schedule SB, until it is terminated.

I read Paragraph 8(ii) to provide that investment earnings and losses do not accrue on the alternate payee’s specified dollar amount until the subaccount is actually created and the amount credited to the sub account (and allocated among the investment options, if that is what the plan usually does). This approach is very easy for the plan to administer because the earnings and losses take care of themselves and do not have to be calculated as part of establishing the alternate payee’s interest.

In addition to Peter's helpful sources and reasoning, I'll point you to IRC 413(c), which lists several purposes for which the employers sponsoring a multiple-employer plan are considered to be a single employer, including: 410(a), regarding service required to participate in the plan 411, regarding service required to become vested in the plan 401(a), but only as it regards whether the plan is for the exclusive benefit of the employees of the employer and their beneficiaries Congress could have added section 401(a)(9) to this list, but they did not. Which implies that the employers maintaining a multiple-employer plan are treated as separate employers for purposes of 401(a)(9).

I agree with CuseFan that no re-registration is needed. There is some debate over whether a new arrangement requires registration, with some saying it is not required. I've always taken the position that best practice is to register new plans because the registration is so easy and it's not worth the downside of failing to register in the event it is determined that it should have been done.

If the plan’s administrator interprets the plan to require no more than what’s minimally needed to the § 401(a)(9) tax-qualification condition: I.R.C. § 401(a)(9)(C)(ii)(I) refers to “an employee who is a 5-percent owner (as defined in section 416) with respect to the plan year ending in the calendar year in which the employee attains the applicable age[.]” I.R.C. § 416(i)(1)(B)(i) defines a 5-percent owner by reference to “the employer”. Likewise, 26 C.F.R. (Treas. Reg.) § 1.416-1/Q&A T-17 refers only to “the employer”. I.R.C. § 416(i)(1)(C) provides: “The rules of subsections (b), (c), and (m) of section 414 shall not apply for purposes of determining ownership in the employer.” Even within a single employer, many practitioners assume a person is a 5-percent owner if she owns (or is treated as owning) more than 5% of any one of the organizations that count together as a single employer. Further, the text “the employer” (rather than “the employers”) does not logically apply to more than one employer. A multiple-employer plan has—after treating together organizations, trades, and businesses that count together as a single employer under § 414(b)-(c)-(m)-(n)-(o)—more than one employer. IRS website FAQs are not guidance. “[I]f an FAQ turns out to be an inaccurate statement of the law as applied to a particular taxpayer’s case, the law will control the taxpayer’s tax liability. Only guidance that is published in the [Internal Revenue] Bulletin has precedential value.” IRS, General Overview of Taxpayer Reliance on Guidance Published in the Internal Revenue Bulletin and FAQs (updated Apr. 15, 2024), available at https://www.irs.gov/newsroom/general-overview-of-taxpayer-reliance-on-guidance-published-in-the-internal-revenue-bulletin-and-faqs. See also 26 C.F.R. (Treas. Reg.) § 1.6662-4(d), § 1.6664-4(b). Likewise, an IRS Publication is no authority. Adler v. Commissioner of Internal Revenue, 330 F.2d 91, 93, 64-1 U.S. Tax Cas. (CCH) ¶ 9388 (9th Cir. Apr. 2, 1964) (Responding to a taxpayer’s argument that he relied on a statement in the IRS’s Publication 17, the court observed: “Nor can any interpretation by taxpayers of the language used in government pamphlets act as an estoppel against the government, nor change the meaning of taxing statutes[.]”). This is not advice to anyone.

No, you only need to register a plan once. New plans of the same employer require registration but not amendments/restatements of existing plans. At least that is my understanding.

Yes then to use an example if you have 1 HCE and 3 NHCs with the HCE and 2 NHCEs are getting 7% and one NHCE getting 3% they all are "benefiting" as they all got actual dollars. But if you are testing on a contribution basis then anyone getting less than 7% is not benefit for 401(a)(4) and your ratio would be less than 70%. So you can either test on a benefits basis and see if it passes (assuming you can pass all tests for this), you have fail safe language in the document which will pull in enough people at 7% to get to you to 70%, or if no fail safe an -(11)(g) amendment to pick an chose who gets the extra to get you to 70%.

Just to be clear for anyone reading who hasn't encountered this - in this case there is nothing to actually move. The money gets recoded as a different type. Sometimes folks think investments will actually be liquidated and reinvested, and that is not the case if clear instructions are given and the recordkeeper (Hancock) does it correctly.

This is a plan design question. The default position is that the carryover from year one is available in year two regardless of whether the employee makes a year two election. However, the cafeteria plan can specify that the carryover is available only for employees who make a year two election. So you'll have to check the Section 125 cafeteria plan doc to confirm. Here's the overview-- https://www.newfront.com/blog/health-fsa-500-carryover-conditioned-on-new-plan-year-election-2 Default Rule: Access to Health FSA Carryover Regardless of Subsequent Plan Year Election For health FSAs that offer the $500 carryover, the default position is the employee will continue to have access to the carryover amount in subsequent plan years regardless of whether the employee elects to contribute to the health FSA again in the subsequent plan year. Where the employee does not elect to contribute to the health FSA for the subsequent plan year, the employee would have access to only the carryover amount under the health FSA for the subsequent plan year. ... Plan Terms May Condition Carryover On Subsequent Plan Year Health FSA Election The plan may restrict carryover funds to only those employees who elect to contribute for the subsequent year. The plan terms may therefore provide that employees must make a minimum election of some amount (e.g., $100) to the health FSA for the subsequent plan year in order to participate and have access to the up to $500 carryover from the prior year. In this situation, employees who do not make the minimum election to participate in the health FSA for the subsequent year will forfeit any unused amount at the end of the plan year and any associated run-out period. In other words, there will not be any carryover amount available in the subsequent plan year. ... IRS Notice 2015-87: https://www.irs.gov/pub/irs-drop/n-15-87.pdf Question 24: May a health FSA condition the ability to carry over unused amounts on participation in the health FSA in the next year? Answer 24: Yes. A health FSA may limit the availability of the carryover of unused amounts (subject to the $500 limit) to individuals who have elected to participate in the health FSA in the next year, even if the ability to participate in that next year requires a minimum salary reduction election to the health FSA for that next year. Example. Facts: Employer sponsors a cafeteria plan offering a health FSA that permits up to $500 of unused health FSA amounts to be carried over to the next year in compliance with Notice 2013-71, but only if the employee participates in the health FSA during that next year. To participate in the health FSA, an employee must contribute a minimum of $60 ($5 per calendar month). As of December 31, 2016, Employee A and Employee B each have $25 remaining in their health FSA. Employee A elects to participate in the health FSA for 2017, making a $600 salary reduction election. Employee B elects not to participate in the health FSA for 2015. Employee A has $25 carried over to the health FSA for 2017, resulting in $625 available in the health FSA. Employee B forfeits the $25 as of December 31, 2016 and has no funds available in the health FSA thereafter. Conclusion: This arrangement is a permissible health FSA carryover feature under Notice 2013-71.

I look at it as, you're not failing coverage, but rather you're failing nondiscrimination (or, at least, there's still work to be done), if you have less than 70% benefiting with a non-uniform formula but over 70% getting "at least something".

Contact John Hancock for a source correction. It's not that complicated and they might even be able to do it as of the deposit date so the earnings work out right. Talk to your account rep, they can probably walk you through it.