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I did ask the first agent why they were auditing a plan that required no discrimination testing, etc... (family business) he just kind of fumbled around with the standard, "could be many reasons" line, but did say they were trying to stay busy. This next one is a one man plan ,with no contributions..... really a huge waste of time, and they are not even visiting my office or clients office - just a teams meeting Just curious if any other areas are getting audits. I have not had a plan audit in over 10 years

No. Hopefully it will stay that way!! What year(s) were audited, and how many participants, and with what results (if known)? Was there anything "unusual" about the plans that you know of?

@jenny: I agree with @ESOP Guy. If you don't see more replies to your comment, odds are it's because of what he said (and it's Memorial Day weekend). Your question raises a hornet's nest of issues, and the only helpful answer anyone can give you is that you need advice of a competent ERISA/benefits attorney. Just as an example: Do you know whether your plan document allows in-kind distributions? If not, you would not be able to transfer the property out of the plan as a benefit distribution, even if that ended up being your only viable option... Or else your risk violating the plan's terms and therefore the plan's tax qualified status (and, depending on whether it was an owner-only plan from the start) ERISA 404(a)(1)(D)).

A few days ago, a question was asked on this board about issues that might be raised when the plan's investment advisor is approached by a participant for individual investment advice for the participant's personal (non-plan) portfolio. Looks like this could become a hot issue for plan sponsors as advisors seek to "turn participants into lasting clients". See this upcoming NAPA webcast: Grow Beyond the Plan: How to Convert Participants into Lifelong Clients What sorts of fiduciary issues does this raise for the plan sponsor -- and the investment advisor? What about contractual provisions that the plan sponsor should ensure are included in the advisor's service agreement? @Paul I@Peter Gulia

There are special timing rules that need to be followed if the participation of the sold organization is to be terminated from the existing plan, if you want to pay out the employees. In particular, BEFORE THE TRANSACTION, the sold organization has to terminate its participation in the existing plan. If it does, then you DO NOT spin off the portion of the plan, but you have distributions to the participants that are now part of the buyer's controlled group and they can roll over if the buyer so permits. The alternative, particularly if the timing rule is not met, is to spin-off the sold entity's part of the plan, either into a separate plan or into the buyer's plan. Be careful if the transition period is important to the transaction, because any amendment to a plan after the transaction causes the relevant plan to be subject to normal 410(b) testing (i.e., you lose the transition period). This can get weird at times .... Hope this helps. It's good to have ERISA counsel on an M&A issue, because it's not a walk in the park. Just sayin' ...

Does this "sponsor" have an attorney or accountant? If so, could you "persuade" such person(s) to educate the sponsor about how bad is this situation? If you do further work related to this plan, you should probably get paid in advance.

It wasn't my client but if my memory was the IRS or the DOL took the position that the first filing wasn't complete and rejected the amendment. Sorry, I don't recall the details better but that event is what made management here change our somewhat casual willingness to file without an audit report and amend later.

Some assert that an investment partnership’s ownership of an investee, without more, does not connect the partnership and the investee under I.R.C. § 414(c) if the investment partnership is not a trade or business. Instead of trying to sort out difficult questions of law with likely difficulties about ambiguous facts, consider—with your lawyer’s advice—asking your client to instruct you about the assumptions your client prefers you to use in performing your services. This is not advice to anyone.

Hi Khn: Corporate transaction agreements generally contain provisions dealing with the treatment of employee benefits plans. I would first look at the reps and warranties dealing with employee benefits in the transaction agreement to determine if the parties have already decided on what actions they wish to take with respect to the seller's 401(k) plan. In general, post-transaction, the employees of the seller are deemed to have "terminated" from the controlled group that sponsored the 401(k) plan. This results in a distribution event under the 401(k) plan. Those participants may receive their account balances in any form that is otherwise available to them under the plan, as if they had terminated employment. The important point here is that the parties cannot require the participant to roll over their account balance to the buyer's 401(k) plan. On the other hand, the parties could decide in the corporate transaction agreement to "spin-off" the account balances of those employees of the selling company that is to be acquired, and have those spun-off assets merged into the buying company's 401(k) plan. In such event, the participant's are not really given a choice--their account balances are now part of the buyer's 401(k) plan (i.e., no distribution event). Hope this helps.,

The seller could consider a spinoff. This most likely makes sense if the buyer wants to merge the spinoff into its own plan. There are pros and cons with this (or any other) process. (I won't list all the pros and cons here; that's a consulting project for which I would not get paid. In the meantime, you can give yourself some more background by searching these Message Boards; try a search word like "merge" or "spinoff".) In addition, there are other employment-related issues associated with any buy/sell arrangement, and those should be discussed in advance. The buyer and seller should (separately) engage competent ERISA counsel, preferably with M&A experience.

Do you yet know whether: the buyer buys the target’s shares (or capital interests), or buys the target’s assets? the buyer assumes the target’s retirement plan? the buyer requires the target to terminate its retirement plan before the closing? And here’s a practical suggestion: Consider getting and collecting now an advance retainer for more than what you estimate as your full fees for any services you might provide. (After the closing, the target might have no money in its till, or might have it only until the target pays the target’s sellers.) This is not advice to anyone.

Ms Jenny, my only free advice is to arrange to sell the property to an unrelated individual as soon as possible. You’re 78 and your long term investing days are over.

You need way more help than you can get from this board for free. There are people on this board who are qualified to help you but it won't be cheap. Your problem is fraught with all kinds of legal issues. I know that isn't answer you wanted but it really is the best answers. Unfortunately, the people who helped you in the past didn't warn you about issues like this long ago. You can literally search real estate in plans on this board and you will find threat after thread of people having this and other problems of putting this kind of asset class in a plan like this. I feel for your problem but it won't be cheap nor easy to get a fix.

I would view this in the other direction--meaning the employer should take steps to immediately remove all §213(d) expenses from the LSA. And also look for a new LSA TPA for not flagging the issue! I suppose in theory you could offer COBRA for the LSA, but it is not clear how that would operate given (as you noted) there are health and non-health components to the plan. I think you could treat it like an EAP and make all types of benefits (including non-medical) available through COBRA, or try to segregate a medical-only component that is accessible through COBRA. I'm doubtful the TPA could do that, but in theory it could work. To me that would be the least of the concerns, though. Think of all the issues with the LSA that could not be readily addressed: ERISA plan doc/SPD HIPAA privacy/security PCORI fees §105(h) nondiscrimination ACA reporting ACA integration to satisfy market reform provisions HSA eligibility Multiple CAA potential issues So I would recommend against trying to shoehorn a COBRA approach into this, and instead reverse course on the medical benefit inclusion asap. More details: https://www.newfront.com/blog/lifestyle-spending-account-compliance-considerations Slide summary: 2025 Newfront Fringe Benefits for Employers Guide

assuming it is a DC plan and the participant died before RBD since the spouse is the beneficiary, the spouse should be able to roll to her IRA at treat it as her own and not an inherited IRA.

Has anyone started receiving audit request - I have had two of my clients audited in last 2 months