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You remember correctly. The Form 5500 Preparer's Manual says: "Enter Code 4Q. If an ERISA welfare benefit is provided that does not have a specific code—for example, employer-provided Medicare supplements, longterm care, accidental death and dismemberment, an employee assistance program (EAP), or health reimbursement arrangements (HRA)—enter code 4Q and explain the benefit as a footnote at the bottom of the page. The DOL states that an EAP is a welfare plan, whether or not it is part of a medical or disability plan. [DOL Adv. Ops. 88-04A, 92-12A] However, if the EAP only provides referrals for counseling, it is not a welfare plan. [DOL Adv. Op. 91-26A] Wellness plans can fall into the same category as EAPs."

We prefer not to use the Social Security definition but prefer to line it up with the employer's basic long-term disability definition. The SS definition requires that they cannot "engage in any substantial gainful activity" and most of our clients do not use that strict of a standard. I have not run into your "equal protection" argument, but I can see where there is a concern (and perhaps gives us another con to the SS definition). Here is language we suggested under a Schwab prototype we recently reviewed. Of course, this assumes the Employer maintains a long-term disability plan (and that it is not self-insured/administered).

The other topics/questions seem pretty well covered so I am going to reply to just this part. This comes up in the ESOP world a lot. I have 4 12/31/2024 ESOPs that are audited plans and still don't have their 12/31/2024 stock price yet. Obviously they aren't going to be ready to file a complete 5500 by the 15th. Up until a few years ago we wouldn't hardly bat an eye at the idea of put a pdf letter saying the auditor's is ready we will file an amended return once it is ready. Not anymore, our firm's rule is a hard we will only file with that attachment if the client or auditor writes that attachment and gives us written instructions to file that way. Our only recommendation is file late an DFVCP. Management is very clear on this. Why? It hasn't happened a lot but it has happened a few times the government has taken the position a 5500 without an audit report is an incomplete return and said the amended return wasn't an amended return but the first legit, and late, filing. They have sent a penalty notice with a very large number on it. So far we have gotten them to waive the penalty by writing a letter. The simple fact is while the odds of that happening seems very low the cost is very high. The DOL penalty is a few grand/day with no cap! On the other hand the worst you pay under the DFVCP is $4,000. The risk of getting hit with that DOL penalty is just not worth it regardless how small you think the odds are. Our management will not allow us to put our firm at risk of having to pay that kind of money by a client saying, "but xyz firm told us it was ok". Just thought I would add that to this discussion. See https://www.newfront.com/blog/form-5500-updates-participant-count-win-and-large-plan-filer-warning I quote: There have been rumblings in the retirement plan industry of informal DOL comments suggesting that the ability to “negotiate” the penalty is going to be much more difficult going forward. Apparently, the DOL intends to crack down on the “file without the audit” approach unless the amended return is filed with the complete IQPA attached before the Rejection Letter is issued (for those keeping track – that is before the 30th day after the extended filing deadline). If the employer is not 100% certain that the IQPA is going to be completed by the end of October or first week of November (for calendar year filers), be aware that this approach may start costing significantly more than Option 2 and there will be little room to negotiate down the initial assessment.

Wow, some brutal reviews. Thanks for posting. When I saw "Blustar" I thought you were getting into a Bud Fox pump and dump scam (See the movie Wall Street), but that was Bluestar. 🤣

The 204(h) notice applies to all DB plans, plus DC plans that are subject to IRC 412, such as money purchase plans (but not profit sharing plans). The notice has to be given 15 days in advance for small plans, but 45 days in advance for large plans. There are some exceptions in cases of mergers and acquisitions - the rules are in 54.4980F-1. https://www.ecfr.gov/current/title-26/chapter-I/subchapter-D/part-54/section-54.4980F-1

For non-PBGC DBPs, if the plan is not already frozen then you need to provide 15-day advance notice (ERISA 204(h) notice) of an amendment that results in a reduction in the rate of future accruals.

No If they deferred $27K and the limit was $23K, $4K recharaterized as catch-up and not in the ADP test, $23K is in the ADP test. If they fail the ADP, up to an additional $3,500 will be recharetreized as cacth-up reducing the refund they otherwise would receive and be retained by the plan because they had not used their full catch-up. If they need a refund larger than the recharaterization amount, they will need refunds. Unless you are over an applicable limit, plan or statutory, the amount goes in the test.

It doesn’t say “first” or “up until”. You’re adding those things. Things generally happen in order. let’s say someone makes $2,350,000 per year and defers 1% of pay each paycheck monthly. The match formula is 100% up to 5% of pay. The person would defer $1,958.33 each paycheck and receive a match of the same. Again assuming the document is not written stupidly, that would continue during the year. The payroll would need to be setup so that deferrals stop when reaching the 402(g) limit (not the comp limit). It would also need to be setup to stop the match when it reaches $17,500 because that is 5% of $350,000 and the maximum allowable match. At the end, the $350,000 comp limit is applied. But it’s not required to be the first $350,000 earned.