Almost all of our clients hand sign the 5500 and a signing authorization.  Over the early years of EFAST, clients just stopped wanting use/recover their PINs.  One client just now did an electronic signature on the 5500 copy that we will attach to the filing before I e-sign.    I'm sure ths has been discussed many times but appreciate comments on this.  There is still time to get a hand signature but not much time.

Is it normal to automatically revoke beneficiary designations of a spouse upon legal divorce of a participant and the spouse? If this is not automatic would the participant have to manually update this within their elections or would there be some sort of legal designation of assets? 

The question has come up whether a plan currently using a safe harbor match can mid-year amend the plan to provide for a 4% safe harbor non-elective contribution. The request is prompted by the sponsor considering adding a DB plan for the current year realizing that the non-elective form of SH would be a better fit for a combo plan.

Notices 2016-16 and 2020-86 don't seem to address this specific situation. I think it should be allowed. Any other thoughts?

I have to amend a Schedule D attached to a large plan 5500 that was just filed for 2021.  The employer neglected to give me a new participating plan.  

Do I just attached the updated Schedule D to the 5500 for filing or do all the Schedules and original documents get refiled as well?  The 5500 Instructions are not clear.

I am new to using this forum (and to the entire industry) so I apologize if this has been addressed one or one million times. Can anyone point me to a resource that provides an exhaustive (or close) list of all ERISA fee litigation cases in, say, the past 3 years? 

Hello,  Client A, a sole proprietor, has his own 401k plan.  His wife just established her own sole proprietorship.  Client A wants to add his wife's company as a Participating Employer to his plan.  Would this be considered a Control Group with an adopting employer or a MEP with an adopting employer?

Have a December 31, 2021 cross-tested 10 participant 401(k) plan where they fund a 3% employer safe harbor contribution. The plan sponsor is an S-corporation that went on extension for 2021. In addition, they funded a profit sharing contribution of 2% of salary and there are no conditions on the contribution allocation. The employer funded the safe harbor and profit sharing contribution to all participants except one of the nonhighly compensated participants who terminated employment during 2021.

It is now past September 15 when the mistake was discovered.

I believe they have until December 31, 2022 to fund the 3% employer safe harbor.

Could they correct this with an 11g amendment or must they correct through voluntary compliance? Could they correct with self correction?

We know both the SH and PS allocation for this one participant will be deductible for the 2022 year rather than the 2021 year.

Thanks.

If a PBGC plan is terminating with a majority owner waiver with spousal consent (assume the waiver and consent meet PBGC conditions) how is Schedule EA-S completed with respect to assets and liabilities?

Assume without the a waiver the liabilities are $500K and assets are $400K.

COVID killed this business model and it has not recovered and prospects for recovery are grim. Very small Cash Balance Plan.

Regarding the PTE that permits a plan benefit to be paid from the employer's corporate account due to the plan's illiquidity as long as there's an agreement in place for an interest-free, unsecured loan, does anyone know if there are any limitations for the term of the loan or repayment frequency?  For example, can the loan be for 18 months with the entire amount repaid with one payment at maturity or sooner?  Thanks in advance.

Hello a husband and wife own two businesses, each are 50% of each company.  1 company sponsors a solok - no employees under that company other than them.  The other company wants to set up a retirement plan for (2) employees, one is a W-2, the other a 1099.  Can they open a Simple IRA or what options do they have?  Do husband and wife opt out of this plan or can they also contribute?  Can 1099 employee be included or they need to set up a SEP IRA?

Their goal is low administration on the plan for the employees, so not a regular 401k.

Thanks!

A plan merges into another plan effective on 10/1/2020.  The plan performs a short year test from 1/1/2020-9/30/2020.  It fails adp testing.  When are correction due to avoid the 10% excise tax?  12/15/2020?

Similar situation, except plan actually terminates effective 9/30/2020.  When is the deadline to correct ADP without penalty?  

We had a 6/30/2021 filing sent in without the audit report around April 15, 2022 and within 45 days the IRS had sent a penalty assessment letter (around $20,000) which appeared to us be a significant change in approach.  Can others indicate whether or not they had similar experiences?  We used to just file without the audit and amend when it was available.   But now I'm wondering if a change in approach would be to not file at all and use the DFVC.

Has anyone else had to deal with this?

If a client failed to divulge that they own multiple companies (they are unrelated, but he is the 100% owner of all of the corporations) and it's not discovered that it should've been a controlled group.  What are the ramifications?  Is there any back correction that is needed?

Plan excludes per diem employees. A per diem employee who used to be a regular employee and was eligible to contribute wants to roll money over into the plan. Is she allowed to roll money into the plan since she is technically no longer an eligible employee?

Thank you!

If a participant takes a distribution but then returns it to the plan within 60 days, 

1.   Can they do this?
2.   Would a 1099-R need to be generated for the original payout?  or can it be considered a wash?

I recall that if someone takes a payout and never cashes the check then deposits the check into an IRA then it's an IRA rollover.  A clean transaction.  Am I mistaken, can they cash the check and then eventually roll the total amount into the IRA within 60 days and still get the rollover benefit?

When drafting the Corrective Amendment for early inclusion, it is required to add the Participants specifics; DOB, DOH and date they were let into the plan ? Or can I just add the Year into which they were let in early? For example;

WHEREAS, as provided in IRS Revenue Procedure, 2021-30, the Employee Plans Compliance Resolution System (EPCRS) allows correction of Early Inclusion of an Otherwise Eligible Employee Failure through the Plan Amendment Correction Method;

 NOW THEREFORE BE IT RESOLVED, the Plan is hereby amended under the above Revenue Procedures for the 2021 Plan Year, as follows:

 The Plan is amended under the above Revenue Procedures for the 2021 Plan Year, to permit Participant Name to participate prior to the satisfaction of the Plan’s eligibility requirements.

Company has a PTO purchase program under its cafeteria plan in accordance with Proposed Regs Section 1.125-1(o)(4).  The program provides that unused elective PTO will be cashed out before the last day of the year.  If the cash-out payment satisfies the definition of "Compensation" under the Company's 401(k) plan, is there anything that would prohibit employees from deferring the cash-out into the 401(k) plan?  Would this somehow be considered a violation of the prohibition against deferred compensation under a cafeteria plan under 1.125-1(o)(4)?  I can't seem to find any guidance on this.  Thanks!

I have a 1 participant 401k/PS (sole prop.) plan that received 100% of excess assets from a terminated DB plan in 2017. Plan was amended as a QRP. The QRP has been funding the ERPS contribution beginning in 2017.   The owner/TEE opted to invest these assets as opposed to keeping them in a non-interest bearing account.  Year 7 will be 2024 and based on the MV as of today, it looks like there will still be assets remaining in the QRP.  Can someone advise me on what the excise tax will be for any remaining assets that revert back to the ER.  Is there anything else I should be advising my client on with respect to this situation?  Thank you.

Hi, 

The plan termination date is 10/07/2022, and all contribution has been completed.  Since this is a safe harbor plan will a safe harbor notice needs to be sent to the participants?  The 30 days notice. 

Thanks 

I'm sorry, I'm horrible at searching for the answer.  

If a small business (husband and wife) in Alaska bring in employees to help during the summer and those employees are leave never satisfying the eligibility requirements (1 year, 1,000 hours, last day) , can this plan still be considered owner only and file a form 5500-EZ?