I just want to make sure I'm reading this correctly in the Plan Document for a client.  Here is the excerpt, regarding the true-up for the Safe Harbor Match:

Notwithstanding the foregoing, if the Employer elects to contribute and allocate separately ADP Safe Harbor Matching
Contributions for an Allocation Period of less than the Plan Year, a true-up will be required unless ADP Safe
Harbor Matching Contributions with respect to any Elective Contributions made during a Plan Year quarter are
contributed to the Plan by the last day of the immediately following Plan Year quarter.

So if the client is funding the match on a payroll-by-payroll basis, a true-up for shortages is not required correct?

Has any big recordkeeper yet made available (if a plan-administrator customer asks for it) a form for relying on a participant’s written statement that she has a hardship?

hi! If a SH plan has a missed deferral opportunity and requires a corrective QNEC - does that then remove the top heavy exemption? I'm curious and can't really find anything that says yes or no on this. I'm leaning towards YES because regs state that it's top heavy if it consists of anything besides deferral and the safe harbor contribution; BUT would it really cause a failure if you correct your plan? I can't wrap my head around this. 

Thank you!

Client sponsors a cash balance plan and is solely owned by a Parent entity.  All employees are employees of the Client and receive W-2s from the Client.  Prior to August 1, the Parent was neither the plan sponsor nor a participating employer in the pension plan.  On August 1^st, the Parent sold 100% of the stock of the Client to a third party Buyer.  Following the closing, Client and Parent are no longer part of a controlled group.  Immediately prior to the sale, the Client and Parent both signed resolutions that, effective August 1, transferred sponsorship of the plan from Client to Parent, and removed Client as a participating employer in the plan.  Parent is now taking steps to terminate the plan.

Clearly, all compensation and accruals for January 1 through August 1 for employment with Client should be counted under the plan.  However, no 204(h) notice was provided to employees giving them notice of the August 1 change in plan sponsorship.  Does the Parent still have to include post-August 1 compensation until a 204(h) notice is given and its timing runs out?  Or, are they just treated as having terminated employment because their employer no longer participates in the plan?  There was no amendment to freeze or change benefits, although the change in plan sponsor has that effect because none of the employees work for the Parent and all employees remained Employees of client.  

Thanks for any thoughts.  The change in sponsorship is not a PBGC reportable event because the plan is fully funded, and the parties will treat the transaction as a partial plan termination and fully vest all participants.  

We've had several client receive letters from the IRS approving the 5500 & 8955-SSA extensions through 8/15/23. The 5558 was submitted for calendar year plans Ending 12/31/22, but the approval letter states the Tax Period as "October 31, 2022" and "File your return by AUG. 15, 2023". Has anyone else seen this? Is this another IRS computer error?

We are currently on Datair and looking at other options.  We are looking at Ft Williams (given we use their document & 5500 system), ASC, and possibly Relius (but unlikely given costs).  One concern is the processing of huge plans.  Currently, we have issues with Datair stalling during busy season when someone is importing or calculating a huge plan.  We do not want to relive this.  We also would like a program that provides some reconciliation options between the accrued balance on the software and vendor ending balance by participants.  Do you have any of these retirement software companies and can you provide pros & cons?

Here's the data:

Company #1 owner A = 50%; owner B = 50%

Company #2 same owner A = 25%; same owner B = 25%; owner C = 25%; owner D = 8%; owner E = 8%; owner F = 4%; owner F wife = 4%

Owners A, B, D, E and F are brothers, owner C has no family relationship.

Company #2 does 100% of it's work for Company #1 (no outside companies).

Would this be an affiliated service group relationship or any other?

Our firm serves as counsel to the local union and the associated pension fund. The union asked the pension fund staff for mailing labels (name and address). The union intends to give the information to a third-party so that participants will be mailed information (unrelated). Issues?

A client (husband and wife) that was a single member plan for many years in 2021 became a plan with a rank and file employee.  Naturally due to this added employee they are required to have a full administration performed and a form 5500-SF filed electronically.  For 2021 the relationship was peachy. Come the 2022 annual administration and the client balks at the price-tag of the annual admin work performed.  A back and forth via email ensues where I explain everything.  Old emails are used to show that she was accepting of the cost, even offered to pay me more for all the back and forth questions.  Yet now she is being cheap.  Her excuse?  She thought the 2021 fee was only for that year due to the added work.  Here is the kicker, my process is to email the client the form 5500 and efile authorization form along with my invoice.  The client returns the form signed and upon payment in full I would file the return electronically and then forward on the complete bound report.  I hear nothing from this client so I file an extension since the 7/31 filing deadline was approaching.  Just now I looked at the DOL website and can see that the return was filed on 7/21.  I am guessing she took my completed form and filed the return herself.  I'm sorry, WTF!

Here is my question, the DOL site says on the form 5500 that the return was "Filed with authorized/valid electronic signature" in the signature space.  Is there a way to find out who exactly filed the return? Who's credentials?

I'm so angry.  You work your @ss off researching, helping someone, holding their hand to get everything the way they want it, you are more than fair to them and then you are taken advantage of.  I need to be more cutthroat and business strong.

And, to head off the inevitable question, no, a current contract was not executed (my bad).  This unfortunate event is making a review of all client contracts a priority. But on that subject, it is in writing that she is ok with the cost quoted and she did pay the first year setting a precedent, right? 

Anyone have a sample notice they have seen / prepared that they are willing to share?  I assume some of the big providers have put something together...

Just saw a brief article from Fred Reish on this.

I'm wondering why an employer would want to get involved in this, if approached by a recordkeeper, etc.? Seems like yet another possible fiduciary issue, yet another possible complication or item that may bring up questions, etc.

From my viewpoint, a participant has been notified about the cashout. They haven't responded, so account is rolled to IRA. Period. No further involvement - wash your hands of the whole thing. The participant then can do anything they want with the IRA.

Don't know what other thoughts folks might have? 

Where or what details can be provided by ERISA guidance that say allocations must be deposited into the investment election that the participant chose or was defaulted too? I know this is a Plan Failure but does it disqualify the Plan? 
example - company provides small catch up profit sharing contribution. It was requested for these funds to be deposited into specific accounts that do not follow the QIDA. 

We have an employer with 100% of employees in its 403b plan that is considering terminating the 403b plan in order to accomplish two things:

1. Start up with a new 403b

2. Provide access to cash for one of the employees

My understanding is that a termination results in a distributable event for employees, where they can either get the cash or rollover to another institution.

If a rollover to another 403b is possible, don't the regulations state that the employer cannot participate in another 403b for 12 months starting the date the funds are liquidated due to termination?

Meaning the funds that make it to the new 403b institution will need to just "sit there" for a year and employees will lose out on contributions that would have otherwise been sent to the initial 403(b). Is my understanding correct? 

Participant died in 2023.  He did not receive his 2023 RMD.

Who would receive the RMD.? Who pays the tax and receives the 1099?

We're planning an early retirement program, and want to make sure our 401k plan synergizes with the new program. We do currently have an early retirement provision in the plan document:

"Early Retirement Age" means the later of: (i) attainment of age 55, and (ii) the 5 anniversary of Plan participation. If a Participant terminates from service before attaining age 55, but after the 5 anniversary of Plan participation, the Participant will be entitled to elect an early retirement benefit upon attaining 55.

Our current match vesting schedule is 3 years (profit sharing is 6, but we don't do that) - I'm wondering if the vesting provision in the above is providing any additional benefit - doesn't seem like it. Is it standard to have that provision match regular vesting, or offer an accelerated vesting? If our goal is to have an attractive early retirement package, woul dit make more sense to not have a plan participation requirement?

I'd love to hear anyone's thoughts who has an ERISA early retirement program!

I am helping my former employer (TPA) do a DFVC filing for a client with several years 5500 filings due.  Rather than signing an E-signature authorization for each year, what they want to do is get a form 2848 giving me the POA to sign and file all the years.  I would have to of course get the EFAST credentials to do this.

Q:  If I have POA and e-sign all the 5500 filings on EFAST, am I opening myself to any liability? 

I have a Cash Balance Plan that is looking to buy an investment property and renovate it, hopefully as an asset of the Plan. 

The property is about $1.35 million, then they would want to spent $1.5 million to renovate it and create a multi-unit rental.

I know owning the property and generating income via rentals isn't an issue, as long as all revenue goes back into the Plan since it is a Plan asset (at least that's my understanding)?

Can they also pay for the renovation out of Plan assets?

The plan document for the ERISA 403b plan says that distributions are only allowed in lump sum payments.  However, the RK is allowing participants to take RMDs in installments or annuities (and in excess of the RMD amount, which is a separate issue).  Is there an overriding provision somewhere that allows this regardless of what may be in the plan document?  Or am I going to have to amend my document to line up with the RK (which is probably the easier solution, but I am interested in the actual answer, too!).  Thanks.

For a Form 5500... let's say the year end 2022 plan assets (snapshot as of 11:59PM on December 31, 2022) was $652,325.  

However, profit sharing contributions / contributions attributable to the 2022 PLAN YEAR are made on March 2nd of 2023 FOR the 2022 plan year.  Those assets deposited on 3/2/23 for the 2022 PLAN YEAR... SHOULD THEY be included in the "year end plan assets 2022" for the 2022 Form 5500?  I just want to double check question this with the wisdom of the crowd here.

A client sent us their census information this past week, and naturally their ADP Test failed miserably for 2022.  

I am preparing a communication explaining the owners' the option of amending the plan retroctively to provide for a 4% Safe Harbor Nonelective for 2022, or take a sizable refund of their deferrals.

Question:  We're well past March 15.  Assuming the client will elect to contribute a $12,000 Safe Harbor contribution to make this go away, is there still a requirement that they also pay the 10% excise tax on the excess deferrals, or is the concept of an "excess" gone by providing the 4% Safe Harbor?