If a plan is terminated mid year, the 430 regs tell us to use the termination date as the val date and treat the plan for 430 purposes as having a short plan year. The minimum is due 8.5 months after the end of the short plan year. Do we count 8.5 months from the end of the month like with the final 5500 filing or is a more precise counting required. For example, if the plan terminated today 10/23/2023 is the contribution due date 7/15/2024 or some other date?

Can a plan have an age based match formula?  Assuming it would pass BRF testing.

For example:

50% of deferrals up to 6% of comp for those under age 45

75% of deferrals up to 6% of comp for those over age 45

Please let me preface this request by saying I don’t do corrections work, and my interest is only academic. I’m developing a lesson for my multidisciplinary course on Professional Conduct in Tax Practice.

For a Voluntary Correction Program submission to the Internal Revenue Service, a plan sponsor might want a representative, and might find it efficient and effective to be represented by a practitioner who works for the recordkeeper or third-party administrator.

Do some offer this service?

Must a submission be prepared, or at least supervised, by an owner or employee who is an attorney, accountant, actuary, or enrolled retirement plan agent recognized for practice before the IRS?

If the practitioner’s employer was at fault for the to-be-corrected failure, does the practitioner have a conflict of interests?

What ways do you use to avoid or manage such a conflict?

If the practitioner’s employer was not at fault for but was involved about the to-be-corrected failure, does the practitioner have a conflict of interests?

What ways do you use to avoid or manage such a conflict?

If a recordkeeper or TPA does not offer a service of letting its employee serve as a plan sponsor’s representative, is that because you see a conflict that can’t be avoided or managed?

Because I lack experience, I hope BenefitsLink neighbors will help me learn about real-world practice.

Okay - Not experienced yet enough with Cash Balance Plans.

Just making sure - aside from using the Comp Limit, is there a limit on the amount of 'contribution' shown on a Cash Balance Participant Statement? I think not.

I have been following all discussions related to QDRO, defined benefit plan, alternate payee and also noted post that new law does not address QDRO divorce and how alternate payee/participant would be affected, which is ironic to me at this time since I am trying to become informed late in life. I have paid an atty a consultation fee and was told he could not advise me as the QDRO was prepared in Az. and he did not know Wa. DRS law. So here is my question, can a QDRO be amended post-divorce? Factors to consider: M 8/15/1992 Washington, ex was a teacher. D 9/15/2014 ex was a Superintendent of school district. Awful divorce, custody issues and I was in remission from breast cancer. Ex remarried, cashed in Az. Retirement, I was informed by ASRS and began receiving 700$ after paperwork signed That was in 2021. He then relocated to Wa. rehired by School Dist. 7/15/23 my sons all here in Az. 2 in college 1 adulting, said their father retired and was moving to CRica. I looked at QDRO & divorce papers. I found a letter dated 2017, from Wa. DRS stating I was in TRS3 defined benefit plan and upon age 65 I would receive $610. monthly. I did sign divorce decree stating due to the fact I would be receiving substantial retirement benefits, my ex was only obligated to pay 36 mos of alimony. No mention of ASRS or Washington retirement. Then QDRO was detained and I do remember that, until 4/05/17 where the retirement accounts do not specify any amount, but say that upon retirement ex & myself can withdraw contributions or begin to receive retirement benefits as defined by the PLAN . The letter dated 4/15/2017 say I can withdraw at 65. I would be fine with that but I might not get there as implants had to be removed due to infection and tumor which is benign but I am not healthy. I cannot name my kids as beneficiaries, and I am furious. Neither ASRS nor TRS3 plan were ever disclosed until after the fact. The QDRO attorney has retired and sold his practice. Do I have any chance to amend? If so, which state should I hire attorney? FYI I received nothing post-divorce in terms of assets. My ex-husband hadn’t paid mortgage and house went into foreclosure. I am a preschool teacher and now on unpaid leave. Which I know is irrelevant, because in the end my sons are here and we are moving forward. But this derailed me. I am 56. He is 57.

We had a client terminate their Plan and pay everyone out in September. We have discovered that one of the participants was shorted $5 on their 401k deferrals during the year while finishing up the last Form 5500. This deposit happened in March. How can we rectify this? Could they give the employee a $5 check? Deposit the $5 to the Plan and see if they will send them another check? I'm thinking they may take it all in fees if that is the case. The client wants to submit Form 5310 to receive a determination letter so I want to make sure it is handled properly.

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.