A company is selling its affiliate. Currently, employees of the affiliate participate in the parent's 401(k) and Pension Plan. As of the date of sale they will no longer be plan participants. The buyer of the affiliate may or may not establish a plan to benefit the employees it acquires.  Many of the employees of the affiliate participating in the parent plan are not vested and they are claiming that given the sale they must become 100% vested. As of the date of the sale they will no longer be participants in the parent 401(k) and DB plans but I'm not aware of a rule that says pursuant to these facts, the employees of the affiliate must become 100% vested. There is no partial termination of the parent plans given the sale. 

Just trying to do some bookkeeping for a few of my new clients.  Does anyone have a list of the required annual notices? 

Just making sure that they've been compliant in the past.

Thanks in advance!

Hi

I am sure this discussed way before so my apologies.

I was asked for 2021 combo plan designs but now am told that there is a SIMPLE in existence.

As far as I remember , they cannot do any qualified plan for 2021.

Is there anything I am missing here i.e. something can be done?

Thank you

A DB plan is being terminated and I'm filing the 5310 and Form 6088 for the plan. Pursuant to the Form 6088 instructions, the plan is deemed "underfunded" since the sum of the value of benefit liabilities exceeds the value of plan assets. Given these facts, the instructions to the Form 6088 state that if the DB Plan is underfunded, columns (g) of the form have to be filed out. Column (g) references ERISA Section 4044 which provides the priority ordering allocation of plan assets based on whether participants made contributions, elected annuities, etc. It seems that based on the 6088 instructions, column (g) requested allocations must be filled out. But does this only apply to PBGC governed plans or all underfunded DB Plan?

Are any of you working with any self-insured clients who are looking to their TPAs to provide MHAPEA comparative analyses as required by the CAA only to be rebuffed in their attempts? 

I am working with one client whose TPA is one of the large BCBS providers in the area and the TPA is not providing an analysis unless and until the DOL comes calling, in which case it will provide a "cost estimate" and will only "work closely" with the client to make sure it timely responds.

I have other clients using other TPAs (including other BCBSs) who have been much more accommodating.

You may know that plans were required to have a comparative analysis by February 10, 2021.

This post is just an exercise in venting but has anyone had a similar experience?

Thanks.

Trying to design a plan for a potential new client just for their main office.  The issue is that it's a production company, and for every film they do they open subsidiary LLC that are 100% owned by the main office.  I assume, based on that, there's no way to exclude all of those additional LLC (adds hundreds of employees) from the Plan and just have it designed for the 10-15 person employees of the parent company?

Just trying to confirm my thinking is correct.  Thanks!

If the Plan Sponsor specifically names the TPA in their retirement plan's plan document as the Plan Administrator for purposes of signing Form 5500, can we entirely avoid having the Plan Sponsor sign the 5500 or any authorizations to file at all?    

My hope is 'yes' and then we can modify our 5500 process to just provide a copy of the filing with the Plan Sponsor for their records and the SAR for them to distribute to their participants.   Could this signing authority also extend to the SSA filing?

As it stands now, we file 'on behalf' of the Plan Sponsor who signs the 5500 and signs authorization for our firm to file.   I'd like to eliminate all of this back and forth, eliminate plan sponsors' signatures being out on EFAST2 and just streamline the entire process.   I'm completely comfortable with our firm signing since we very closely monitor deposits, review in detail for late deposits, review participant census ongoing and the like.

Anyone's POV on this and what they do would be greatly appreciated.    Thank you,

I have a participant who wants to take his RMD in an amount more the minimum amount. It's my understanding that a participant can request any amount as long as it's at least the minimum amount. The recordkeeper wants 2 different distribution from done. One for the actual RMD amount and one for the amount over the minimum. I've never encountered this before. The reason I was given was that the RMD is taxed one way and the overage another.

Thoughts?

Hi -  

We have a client that has failed to file Forms 5500 for several years, and for all years in question, were subject to audit requirement.  Unfortunately, prior to around 2016, information necessary for the auditors to do a complete audit is not available.  Therefore, we are unable to get the auditors to sign off on those audit reports. 

Are there any recommendations on how to proceed?  We obviously want to file under DFVCP and pay the late filer penalty, but will not be able to do so without the auditor's report.  Any suggestions on whether we should

• not file the 5500s at all (seems like a bad idea)
• file without auditor's report (again, seems like a not so great idea, but better than not filing at all)
• file with an incomplete report, with explanation of the situation 

Thanks,

My understanding is that assets under a qualified ERISA plan are protected from creditors. I also understand that benefits transferred to an IRA from an ERISA plan retain their asset protection

We are considering a change in systems.  I would appreciate any feedback on the software options that other professionals use.  Our clients have standard DC plans: 401(k) plans, 403(b) plans, 457 plans and also ESOPs.  Some of our ESOPs are very complicated. Please let me know about your experiences with your vendor.   How responsive are they about questions?  Also, what is the one thing you wish your vendor did better.  

We are also considering Pension Pro.  I would appreciate feedback about your experience with PP and how well it works with each vendor's system.  Thanks for any comments.

I know that there will probably be an increase to the contribution limits for 2022 but does anyone know if the IRS has officially released the contribution limits for 2022 yet?

Suppose a small business owner with a db scales back and works final two or three years without ees. Does this cause any 401(a)(4) or 401(a)(26) issues? Not worried about the partial termination issues. I don't think this is BRF issue for 401(a)(4)(note no early retirement subsidies). For 401(a)(26), I am thinking you can't cover employees you don't have so this should be ok as well.  Wondering if there is anything I am not considering?

Plan doc says participant can defer up to 100% of comp.  Compensation for plan purposes is 415 Comp.

But as we all know, certain taxes are taken before the 401(k) can be deferred.

So, if I make $5,000 this pay period and I want 100% of my pay deferred.  But, $350 is withheld for various taxes (like Soc Sec).  Now my check is only $4,650.  ER deposits $4,650.

But my compensation is $5,000.  My SPD says 100% of comp, which is 415(c) comp, no exclusions.

Where does it say that $350 cannot be put into the 401(k) plan?

I understand the logistics, but cannot reconcile the semantics. 

Hello,

I'm looking for clarification on whether or not there is an aggregate employer-wide coverage test that has to be applied in order to qualify as a QSLOB, in addition to passing coverage for each QSLOB separately. Much of what I've read seems to indicate this, referencing a "gateway" test for coverage.

From ASPPA DC-3 Study Guide:

"If the requirements for QSLOB are met, an employer may elect to apply the coverage tests under IRC §410(b), and, as a result, the nondiscrimination tests of IRC §401(a)(4) separately to each QSLOB. In other words, the purpose of making a QSLOB election is to perform certain testing requirements on a QSLOB-basis rather than on an employer-wide basis. In order to perform the coverage (and thereby nondiscrimination testing) separately, the plan must first satisfy the nondiscriminatory classification requirement of the coverage test under IRC §410(b) on an employer-wide basis."

IF the "employer-wide" test is needed, would a controlled group be required to do a control-group-wide coverage test in order to have QSLOBs within the controlled group?

The point of confusion is that a reason for having a QSLOB in the first place is to avoid coverage testing on a plan-wide or employer-wide basis.

What am I missing?

DC-3 Study Guide: https://asppalearningtpabenchmark.org/wp-content/uploads/2020/01/PDF-DC-3-Study-Guide-8th-Edition.pdf

Attached is an excerpt from IRS publication found here: https://www.irs.gov/pub/irs-tege/epchd103.pdf

IRS QSLOB Coverage Testing.pdf

The situation is this: Calendar year plan is sponsored by calendar year company A.  An affiliated service group member, company B, has a fiscal year end June 30, with tax return due Sept 15.  My understanding is that company B may make a contribution to the plan for, say, plan calendar year 2020 as late as Sept 15, 2021 and deduct it because part of the plan year (July 1-Dec 31, 2020) fell within company B's fiscal tax year (July 1, 2020-June 30, 2021).  Is this your understanding? Is there a specific IRS ruling to this effect? (Obviously, company A's contribution for plan calendar year 2020 would have been due by Mar 15, 2021.)

I was approached for consulting on the following - never saw this before:

Sponsor has a PS plan.

Sponsor intended to merge (or terminate the existing plan and join - not clear) with another group of plans and add 401k feature.

Sponsor, without taking any formal action, provides distributions to all participants, mostly active employees. All happened in May of 2021

Sponsor decides not to join the other group and continue with his PS plan and also amend for 2022 by adding 401k feature.

What can be done here to correct all?

Thank you

This Dr. is taking down his shingle. He was born 1/6/1951.  I've been reading and here is what I found....

The beginning date is determined as follows (from the IRS site):

• April 1 of the year following the later of the year you turn 72 (70 ½ if you reach 70 ½ before January 1, 2020) or the year you retire (if allowed by your plan). If you are a 5% owner, you must start RMDs by April 1 of the year following the year you turn 72 (70 ½ if you reach 70 ½ before January 1, 2020).

So...

first, he was not 70-1/2 before 1/1/20 so he shouldn't need to take an RMD until he is 72 but he is a 5% owner... and he is retiring.  Can he just roll his money into an IRA or does he need to take an RMD first?

Thanks

A Plan Sponsor sponsors both a DC and CB plan and as of 1/1/2021 the CB Plan is PBGC-covered. As of 1/1/2021 there are two participants, the business owner and one other participant. The other participant is paid out during 2021 and a PBGC coverage determination filing is made. The PBGC determines that as of 10/1/2021 the CB Plan is no longer covered. As a result, does the combined deduction limit (the 31% limit is not really practical for this plan, so it would be the CB contribution + 6% on the DC side) apply for 2021?

Owner only plan's spouse has terminated employment so is now a terminated vested participant.

Is it common in this situation to remove the spouse as the second trustee on the plan?