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Section IRC § 401(k)(14)(C)(w)(t)(f), provides that you will be removed from you home at night and placed on an airplane that will take you to a prison in El Salvador without due process where you will be incarcerated for the rest of your life. So your best course of action to protect yourself is to interrogate the prospective lying SOS in the customary way before permitting the hardship distribution. https://www.meisterdrucke.uk/kunstwerke/1260px/English%20School%20-%20Cuthbert%20Simpson%20also%20Symson%20Simson%20or%20Symion%20tortured%20on%20th%20-%20%28MeisterDrucke-673723%29.jpg

Note that Q3 in the DOL FAQs, the process is first file the form and second pay the penalty. Completing the filing is no guarantee that the IRS will give a complete pass on an examination, but they do take into consideration that the form was filed and the plan is acting in good faith.

Very common strategy. Just make sure you do it before anyone earns a benefit and make sure you get the 204(h) notices out on time.

Hmm. That’s only a small step away from, “With actuaries, all things are possible.”

When I started into practice (shortly after TRA '86 was passed), senior ERISA partner who was about to retire gifted me his copy of the original CCH volume on ERISA -- complete with all of his handwritten annotations. A small part of me still thinks it belongs in some arcane museum somewhere.

By definition, it’s not an excess if it’s simply more than the minimum they were required to provide. What limit did it exceed?

An owner can pay himself on whatever schedule he desires.

For clarity, can we assume that this is for a 5500 or 5500-SF? (Form 5500-EZs have to use the IRS late filer program.) The DFVCP Q&As https://www.dol.gov/sites/dolgov/files/ebsa/about-ebsa/our-activities/resource-center/faqs/dfvcp.pdf say: Q2. Who is eligible to participate in the DFVCP? Plan administrators are eligible to pay reduced civil penalties under the program if the required filings under the DFVCP are made prior to the date on which the administrator is notified in writing by the Department of Labor (Department) of a failure to file a timely annual report under Title I of the Employee Retirement Security Act of 1974 (ERISA) Note that the DFVCP is available unless the DOL has sent the plan a notice of a failure to file. If the information is available to make a complete filing, then it is worth filing under the DFVCP asap to get ahead of getting an official notice from the IRS. However this develops, one thing is that is certain is the plan ultimately will have to file the 5500 for the that is late.

As a TPA, I have some clients that like to provide for Profit Sharing allocations, under Each in Own Class allocation formula, during the relevant plan year. After the year ends, we receive census data and prepare our cross-testing for allocations. The question is, if a client contributes in excess of a minimum benefit that we calculate, would it be permitted to forfeit that money from the participant account? How about offsetting for future year contributions? My thoughts are that this may violate the Exclusive Benefit Rule with some overlap on Anti-cutback. Essentially, once money is deposited to an employee account, it becomes a plan asset. Plan assets are for the Exclusive Benefit of employees and beneficiaries. Reasons to return plan assets need to fall into Mistake of Fact, Disallowance of Deduction, or Failure to initially qualify with the IRS. To me, this boils down to, is this 'prefunding' considered a mistake of fact? I would argue that it is not because they did not violate terms of the plan and no clerical or mathematical mistake was made. The sponsor decided to fund based on preliminary numbers. Interested to hear thoughts from others.

The number of "solo 401k plans" that are referred to me that are missing restatements is disheartening. When I explain the issue and cost to correct it, almost every single one has elected to go back under their rock and hide (hopefully at least getting a current restatement, for their own sake). I have to presume that these solo 401k vendors are doing the bare minimum and sending the sponsor some kind of correspondence about a restatement... but no follow-up because their service agreement puts all the responsibility onto the sponsor. "But I saved a couple hundred bucks on administration!" Good trade-off. *eyeroll* Yes, this is a pet peeve of mine.

Is the impaired wife merely unable to execute a spousal consent on the beneficiary designation, or is she so cognitively impaired that she doesn't understand what she is being asked to consent to? I think it might be better for the family to go to court and ask for the appointment of a guardian for the wife. The guardian will be invested with the power to make a decision about whether it is in the wife's best interest to consent to a change in the beneficiary. Even if the Plan Documents permit the use of a power of attorney as suggested by Peter, keep in mind that Plan Administrators have a fiduciary duty toward the participant and the beneficiary and you don't want to be seen as promoting or facilitating the interests of one over the other. I would be very careful. What will happen to the wife when dad dies and the daughter is now the beneficiary? Will the daughter take care of mom? If so, then why not appoint the daughter as the guardian of the person and of the property of the wife?

How does the accountant not know that? Isn't that their job to know? (Sorry, been a tough day. Just venting)

Your thoughts are correct and the employer should either stop making contributions until final numbers are provided or live with giving some employees more than they needed to pass testing, it's as simple as that.

It would be interesting for you to enter the numbers into this app I wrote a coupla decades ago, and see if it agrees that 80% + $1 is the optimal integration level: https://benefitslink.com/site/inte-greater/

If they're in the testing, and they're already benefiting from the non-elective safe harbor, then they have to get at least the gateway minimum via additional profit sharing allocations. Check your plan document, many pre-approved documents will have a line in the BPD indicating that anyone who has to get gateway, will get gateway even if it conflicts with other plan provisions.

Failsafe provisions generally address 410(b) rather than 401(a)(4). That's the first thing to clear up - whether you have insufficient people, versus insufficient benefits to those people. Gateway minimums are required for anyone sharing in the nonelective contributions of the employer. (That means, in for a penny, in for a pound, and if you have a 3% SH nonelective, that means they're already benefiting some, if not yet enough to meet that gateway level.) If your plan allocates individual contributions by person (rather than one big contribution to be shared pro rata, if your plan says that instead - I'm referencing individual allocation classes with 1 person in each class) then you can adjust people with more individually. That's the typical fix if you're passing coverage but not non-discrimination....increase NHCE benefits as necessary for the 401a4 testing.