I have a plan where the plan sponsor acquired a new company which does not have a retirement plan. The plan sponsor (buyer) wants to add on the newly acquired company as an adopting employer. They are a controlled group, so no issues there. Since the plan sponsor has a safe harbor plan, are there any issues having the newly acquired company sign on as an adopting employer right away vs. needing to wait to give a 30-day SH notice to the employees of the new company first, or just wait until 1/1/2024? Anything else I'm missing?

Anyone have an answer to this question? Or is the sponsor stuck with this deceased participant balance indefinitely? Based on balance, he cant be forced out ( over $7000 as well).  I don't think transferring to states unclaimed property division is answer either. Any insight is appeciated!

Can an employee share of a health insurance premium be handled on a pre-tax basis without a Cafeteria plan? Employees do not have a choice between cash and the health coverage. All must participate and the only benefits offered are covered by 213(d).

Thanks in advance. 

Hi

Totally fried brain so will ask the following stupid questions

Frozen CB plan (frozen early 2023 hard freeze i.e. no new entry+ no accruals to anyone):

• Top heavy
• Title I (no PBGC)
• Underfunded i.e. assets are less than the total account balance
• Covering 2 owners and a few previously terminated participants.
• 2 additional non-owner employees, one HCE and one non-HCE categorically excluded

PS Plan:

• Not top heavy
• Only PS provisions
• No contribution for 2023
• Top heavy benefits are provided under PS plan and only to non-keys (no top heavy provisions under the CB)

Combined plans are top heavy and plans were aggregated in the past for testing.

Questions:

1. I believe I have to pass 401a26 within the CB plan i.e. at least 2 must get meaningful benefit, agree?
2. If prior benefit structure would work, how would I test it (I am always confused with this). I have 2 active and 3 inactive participants, all with meaningful benefits prior to freeze. Any thoughts on this?
3. Assuming I need to provide the meaningful benefits and only to the 2 non-owner participants, I do not have to provide any top heavy under the PS plan as long as the keys do not get any allocation in either CB or PS plans, agree?

What else am I not thinking of/asking about?

Thank you.

I've not had much luck finding an answer to this, hoping the contributors here can help me - with the change in methodology of participant count for the 2023 Form 5500, now looking at participants with a balance as of the beginning of the year, how will this impact new plans that have 0 participants with a balance as of the beginning of the year but over 100 at the end? I found one line from Ascensus that stated a first year filing would look to participants with a balance on the last day (which makes sense to me, otherwise all new plans would be small filers). However, I can't find that stated on any governmental site. Has anyone looked into this or have a link to postings from the IRS/DOL? 

Thank you!

Church or government agencies are exempt from being required to have auto-enroll starting in 2025.  Maybe I'm just reading too much into this, but is the exemption applicable to a plain old non-denominational church that wants a 401k plan?  They do outreach programs and such, but it all centers on their church.  They would prefer not to have auto-enroll and I think this would fit the exception to the rule.  

Any comments are appreciated

We are terminating a defined benefit plan with many former employees. We used a locator service to find addresses for all of the former employees and have learned that several of the former employees are now deceased. What do we have to do to determine if they were married and to find the spouse since the plan has a QJSA payable to the spouse?

We will be filing a 5500 for a Welfare benefit plan with plan year of 4/1/22 – 3/31/23.  The plan has more than 100 participants at the beginning of the plan year.

The plan year is changing to 6/1/23 – 7/31/24 so a 5500 will need to be filed for the short plan year 4/1/23 – 5/31/23

We currently report 2 Schedule As.  One is for the plan year and one is for the policy year 1/1/XX – 12/31/XX.  We will request a Schedule A from the insurance provider that uses the plan year.

How do we phrase a request for Schedule A information from the insurance provider that uses a policy year of 1/1 – 12/31  since the short plan year is in the middle of the policy year?  Or do we just use the same Schedule A that was reported on the 4/1/22 – 5/31/23 5500?

Thanks

Hi All, I am new here and hoping to get some guidance.

I just received a $150K bill for 5500-EZ. (attached)

Its notice CP 220 for my Form 5500-EZ (Solo401K & I am the only employee in my company) for year ending 2020. I called the number on the notice, I was told this $150K amount due is for the penalty for late filing. But I had mailed my 2020 5500-EZ on time in 2021, but I dont have the proof of mailing. For all required years, I have always mailed on time. 

Also, earlier this year, I had received "Compliance Check Information Request letter" stating they dont have 2020 & 2021 forms (attached). So I had faxed them the form I had originally mailed. Per the agent on the phone today, for 2020, they uploaded my faxed 5500-EZ but with the filled date as the date they received my fax (May of this year). So they are treating it as filled late and $150K is penalty for the late fee.

What are my options?

- the agent suggested I write a letter and explain this and hope they remove the penalty.

- I am worried what if my letter of explanation is rejected and penalty is not waived ? Do I have any other option to pursue ?

- My company hardly makes any money, (I now work at a different company). My company does not have the funds to pay this. Would I have to pay it from personal funds ?   

- Since the notice is CP 220, and Not CP238, should I just file the "5500EZ Delinquent Filing Penalty Relief" and pay $500 ? or I am no longer qualified for this due to the notice I just received?

Where can I find right professional to represent me sorting this out. 

Appreciate any help. Thanks !

New Plan:

• Adopted 5/1/22
• Effective 1/1/22
• 401(k) and Match only as of 7/1/22
• No Employer Contributions which are allocated based on the 1/1/22 date
• Participants with Balance Count at 12/31/22: 150

I believe that they do not qualify for any of the exceptions to filing as a large plan with a set of audited financial statements, but curious of other thoughts.

• Short plan year exception - although the plan only had contributions moving forward during part of the plan year, the plan was declared effective as of 1/1, so no exception here
• Over 120 - There were more than 120 participants at eoy, so no exception

I saw an article in the Newsletter the other day regarding LTPT.  The article said (paraphrasing), that in general the IRS has said that all years of service must be taken into account when determining vesting for an LTPT.  

Wasn't it SECURE 2.0 or some other more recent guidance that allowed 401(k) plans to not count years prior to January 1, 2021 for vesting?

Thanks.

I left my former company a few years ago and, unfortunately, the ESOP plan has been losing value every year since.  I did take a distribution when I turned 55 last year and, in a few years, I'll be able to start collecting payments every year (20%/year for five years).   I just received a letter stating that the ESOP plan was recently amended to allow for a one-time offer to terminated/vested employees (which I am) to receive a distribution from the plan.  The amount they are offering is roughly 40% of the amount I have left in the plan (which is all in stock).  I've reached out to other people who have left this company and they've also received the same letter (with the flat rate same amount).  Since the plan has been going down ever since I've left (probably down about 25-30%) I'm very tempted to take this offer (I have until mid-November to decide) but I'm curious as to why it would be offered in the first place.  I know that there are no more shares to allocated to new employees so this could be a way to buy back shares for them.  Would it also be advantages for the company to buy back shares in they were looking to sell it?  Curious to see what other people think and what they would do in this situation.

I am in the process of launching my own TPA firm and looking for best practices on software and/or programs that I should obtain. Any input would be extremely helpful!! 

I am in the process of starting a new TPA form and looking for a mentor. Staff will be just me. I have loads of experience on the investment side of the business but administration is new to me. I have a QKA designation and will be obtaining the QKC and QPA. 
 

I am looking to find a mentor that I could refer to if I run into issues on the administration side. 
 

If a client wanted to give our firm the authority to sign the Form 5500 on their behalf (I guess signing it under my ID), what do they need to sign to authorize that?  Would our firm just be listed as the Plan Administrator on the Form 5500-SF?

We've always had the client sign themselves, but for some reason one client doesn't want to do it and would rather have us sign.

Ok, so after 40+ years in the TPA world I retired at the end of 2021. In 2022 I terminated my small solo-k which I sponsored as a sole prop for some side income, plan was alway under $250k.  I rolled it to an IRA and in January 2023 I filed a 2022 EZ marked as both the first, and the final return.   Today I get a letter 1072C from the IRS telling me that my EIN is XX-XXXXXXX and that I should always use this number in filing the EZ.   Well, duh!  Yes, I know that’s my EIN, that’s why I put it on the EZ form in the first place.  I checked my copy, the number on the EZ is correct and matches the number IRS states in the letter as well as on the original EIN assignment letter I received years ago.  The letter doesn’t say I have to do anything, and it acknowledges receipt of the 2022 EZ filing.  So Whiskey Tango Foxtrot?  I don’t recall any of my clients over the years getting a letter from the Service like this.   
 

anyway, just thought I’d put this out there in case some of you start getting client calls about such a letter.  I think IRS has a special department to create correspondence designed to waste TPAs’ time.   Definitely helps remind me why I was ready to retire (and enjoying it immensely, especially most days where there’s no IRS envelope in my mailbox!)

We filed for EFAST credentials back in 2010 for a plan with two Trustees and several employees, credentials under the name of one of the Trustees, who has retired, and since then remain Trustee plus one new partner are the trustees.

There are now 3 plans sponsored by the Employer, one for each Trustee, one for the Employees.  

I believe the credentials go by the Employer/Plan Sponsor.

If so, I assume we do not need to refile for EFAST credentials.

Deleted.

Owner-only plan value exceeds $250,000 for the first time as of 12/31/2022.  We were asked to do the 5500 in late September.  The plan sponsor ( a sole proprietor) had his 1040 extended to 10-16-2023.  So we marked the 5500-EZ "Automatic Extension."    There was no 5558 filed before July 31, 2023.

It seems dubious the IRS would just trust that this 5500 is properly extended since there is no 5558 filed and I'd expect a notice.  If there is any question about this, the sponsor could just file under delinquent EZ procedure and pay $500 before the IRS notifies.  We've never filed a 5500 under the automatic extension option. 

I'm probably concerned for no reason right?

Starting a general discussion rather than a specific question.... As we know returns during 2022 were bad, 2023 is still iffy but not exactly great either....Which means that PBGC premiums for 2024 using a lookback (1/1/2023 for BOY vals and 12/31/2023 for EOY vals) might be a quite unpleasant surprise especially for plans that started 3-4 years ago and are just hitting the "vested" point.  So, I am curious what others think about the "opting out of look back":

1) Is it realistic for PBGC to approve?

2) Does the 60 days advance application to PBGC mean October 31st deadline?

3) I realize that for EOY val date it is not practical (valuation results are not available until 2.5 months AFTER the premium is due) however:

1. I believe PBGC filing can be done on an "estimated" basis with the subsequent "true-up".  Yes, it is an additional work but might be worth it?  Or not?
2. Is it likely to get approved by the PBGC?
3. Has anyone ever done something like this?
4. Are there any other considerations or concerns?

TIA.