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Seems like pretty good comments (not legal advice 😄) from @Peter Gulia. Another course of action might be to ask the accounting firm directly. At the risk of sounding like a broken record (you youngsters can look up what that means), in addition to reading the statute, you may find some useful information by searching these Message Boards for prior discussions. I suggest a search term of "4980" or "replacement".

The loan must bear a reasonable rate of interest in order to be exempt from being a prohibited transaction under IRC 4975(d)(1)(D) and ERISA 408(b)(1)(D). Since a plan fiduciary (and the plan administrator, even in a non-Title I plan) may not enter into a prohibited transaction, the loan could not be made in the first place. So, I suppose I agree with your conclusion that making a loan with an unreasonable interest rate would not be a 72(p) violation. It would however be a disqualifying failure and a fiduciary breach.

You have submitted this question at least 3 or 4 times and I have provided you with online responses twice and a private response once. If you cannot provide the information I asked for I cannot help you and nobody else on this blog can help you. There are things that can be done to collect your alimony arrears, but you are not an attorney and will most likely find it impossible to handle it yourself. So you are going to need to find a lawyer.

72(p)(1)(A) states a loan from a plan is a distribution: "If during any taxable year a participant or beneficiary receives (directly or indirectly) any amount as a loan from a qualified employer plan, such amount shall be treated as having been received by such individual as a distribution under such plan." Then 72(p)(2) provides an exception. Treas. Reg. §1.72(p) initially states the exception is for bona fide loans "with adequate security and with an interest rate and repayment terms that are commercially reasonable." I assume your unreasonable interest rate is not "commercially reasonable" and, thus, for purposes of the Regulations, would not be a bona fide loan that meets the exception. Just my thoughts so DO NOT take these ramblings as advice...

Depends on the provider. We do, and I have seen other providers that offer this service for a minor fee. I have also seen providers that say "not my problem".

This is the answer.

If a law firm was on the scene when the weak documenting happened, the law firm might be persuaded to write a memo the CPA firm relies on as a file-closer. Otherwise, the employer/administrator might be at the mercy of what the CPA firm observes and, if it observes, thinks.

Hi Peter - this one. The employer is, to be kind, useless, and has been in complete disarray for months. We shoulda dumped them a long time ago, but the bosses don't like to cancel clients... We don't know yet if the accounting firm will have an issue with this - just preparing for that possibility. Gracias.

The regulations simply state: "on or before the later of: (1) The date which is 90 days after the employee becomes a participant . . . ." I am not aware of any relevant guidance that states a "no earlier than" date. The key phrase in the reg is "on or before". So, any time earlier than the date the employee becomes a participant technically fits within the literal words of the regulations; however, there is probably a strong likelihood the DOL would consider providing an SPD a year prior to the date the employee becomes a participant as unreasonable. I could see a DOL agent arguing that the period for giving the SPD commences on the date the employee becomes a participant (key term here is "after") and ends on the 90th date after that. However, I could see another DOL saying that a period of 30-60 days prior notice would not be unreasonable (see, e.g., the blackout notice rules). As noted by someone above, prior notice and information should be helpful to a participant. It seems like giving the SPD say within 30 days prior to becoming eligible should be useful and reasonable and shouldn't be challenged by the DOL ... especially, if you can show that it was actually given to the employee at that time, that the employee was informed of the importance of the SPD and that they become eligible to participate within 30 days. If you give it early (i.e., 30 days prior to eligibility), when the employee actually becomes eligible my thoughts would be to have company send them a communication stating they were previously provided an SPD upon hire (i.e., within 30 days) and that if they need another one it can be accessed at intranet site address or call HR. Note... these are just my thoughts so DO NOT construe these ramblings as advice.

Yes, as long as you use the same definition of compensation for all participants. You might also consider restructuring your test into component plans to avoid testing the young HCE on accrual rate.

Can anyone explain why IRA custodians request the "first year of Roth" when a Roth 401(k) is rolled over to a Roth IRA? The 5-year clock starts over when Roth funds are rolled over from a 401(k) to a Roth IRA. Besides the fact that I also don't understand WHY the clock starts over, why is this data collected?