We have a new potential client that may pay most of it's employees through 1099.  I assume if the bulk (let's say 75% are paid that way), we're going to create discrimination issues?  They were pushing back against me saying someone else told them it wasn't an issue, so I just wanted to confirm

Top hat plan never filed statement with DOL so we are taking it through DFVCP.  Do we simply file the top hat statement and pay the $750, or must we also complete and file the several page application (which application does NOT indicate this as one of the items for which this is to be filed, see below): 

Transactions Corrected Check which transactions listed in the VFCP you have corrected:

Delinquent Participant Contributions and Participant Loan Repayments to Pension Plans

Delinquent Participant Contributions to Insured Welfare Plans

Delinquent Participant Contributions to Welfare Plan Trusts

Loan at Fair Market Interest Rate to a Party in Interest

Loan at Below-Market Interest Rate to a Party in Interest

Loan at Below-Market Interest Rate to a Non-Party in Interest

Loan at Below-Market Interest Rate Due to Delay in Perfecting Plan’s Security Interest

Loans Failing to Comply with Plan Provisions for Amount, Duration or Level Amortization

Default Loans

Purchase of an Asset by a Plan from a Party in Interest

Sale of an Asset by a Plan to a Party in Interest

Sale and Leaseback of Real Property to Employer

Purchase of Asset by a Plan from a Non-Party in Interest at More Than Fair Market Value

Sale of an Asset by a Plan to a Non-Party in Interest at Less Than Fair Market Value

Holding of an Illiquid Asset Previously Purchased by a Plan

Payment of Benefits Without Properly Valuing Plan Assets on Which Payment is Based

Duplicative, Excessive, or Unnecessary Compensation Paid by a Plan

Expenses Improperly Paid by a Plan

Payment of Dual Compensation to a Plan Fiduciary

Correction Amount

Does anyone know which plan-documents supplier—Relius, ASC, ftwilliam, someone else—Ascensus/FuturePlan licenses from?

Welcome any thoughts or experience on this.  Still waiting to see exactly what the specific plan document provisions say here but situation involves a partner in a partnership who leaves the partnership mid-year.  Partner continues to be entitled to a portion of revenues collected during the second half of the year, is assisting generally with collecting receivables and other transition issues, reflected as a partner in the partnership for the year, etc. but is not performing new services / generating new fees for the second half of the year.  Can the partner be considered "employed" on the last day of the plan year for purposes of profit sharing?

I have a quick question and just want to make sure I'm not overlooking anything:

Company 1
Person 1 - 100% ownership
Person 2 - 0% ownership (though they work for the company)

Company 2
Person 1 - 75% ownership
Person 2 - 25% ownership

The two people are not related.  Since Person 1 owns less than 80% of company 2, there isn't a Controlled Group issue (even though Person 2 works for both, they only have ownership in one).

Thanks in advance!

Is anyone familiar with the mandated retirement plan being instituted in New York?  The question is if a company has an existing Profit Sharing Plan, but doesn't allow for 401(k) contributions, are they exempt from participating in the mandated plan?

Reviewing takeover plan docs from prior TPA.  Document is 3  % safe harbor with cross test language.  Definition of comp excludes bonuses.  Plan passes comp discrimination test but Safe harbor was calculated on comp less bonus.  I thought you had to use a 414s definition of comp for Safe Harbor.  Am I wrong?

I have released a client from my servicing contract and he is asking me to return my files.

I know this has come up before, my files consist of paperwork the client has submitted to me (W-2s, K-1, etc),  my calculations, my copies of the investment reports I access online.

Aside from the client having all this information already, is there any basis for me to send him my file or is this just "sour grapes"?

For some reason, powers that be made this plan effective 12/1/21.

What limits am I prorating when doing the profit sharing?

And am I correct in remembering that self-employment income is "earned" on 12/31?  So in this case, the owner will be using his full $290,000 comp?  (unless the comp limit is 1/12 of course...)

A 401(k) plan has many participants making very small contributions - $4-$5 a week in some cases.  The plan sponsor records participant termination dates with the recordkeeper after each pay period.  The recordkeeper has taken it upon themselves to forfeit small balances for former employees after the plan sponsor enters their termination date.  They are forfeiting employee pre-tax and Roth salary deferrals without any direction from the plan trustees and with no apparent reason other than it's their "policy" not to cut a check for less than $25.  In one instance they forfeited $80 of an employee's pre-tax salary deferrals - about $20 at a time because the plan sponsor made 3 $20 deposits after the employee's termination date was entered.  All of the others we have found were $10 or under.

Has anyone out here come across this practice and is there anything I'm missing that would allow it?  The plan document certainly doesn't say a small balance can be forfeited vesting be damned.  I'd feel better about it if some of the experts on BenefitsLink have experience with similar approaches by recordkeepers and/or have had the IRS or DOL approve the practice.

My question involves the merger during the 410(b)(6) transition period of 2 401k safe harbor plans with the same safe harbor match but Plan A has a plan year ending 9/30 and Plan B is a 12/31 calendar year end plan. The goal is to consolidate into Plan B by 1/1/2023 since the coverage transition period ends 12/31/22. What is the best way to accomplish this? Options I see are 1. freeze plan A 9/30 and adopt Plan B on 10/1 (transition period ends but does it matter?) so participants will be in Plan B with mirror safe harbor match, and then 12/31/22 merger Plan B into Plan A, or 2. change the plan year of Plan B to a short plan year from 10/1-12/31 and maintain safe harbor status, and then since both Plan A and Plan B will be calendar year plans they can merge on 12/31/2022. This option creates 2 5500's as well,  a plan amendment and also the need for new safe harbor notices for the 10/1 short plan year, so it appears more burdensome. I do not think create a short plan year violates the transition period rule? I appreciate any comments, thoughts, help since I have not really had this issue post-transaction. Thank you!

I know many of you must have run into this.

You have a physician client who's practice sponsors a qualified plan. One problem though. The physician has a 10% interest in a Dialysis Center. Oh yes, and he is a Kidney specialist. ASG? Certainly seems like one. They would not want to consider an additional 15 employees for their plan. However, there is doubt (in this case) that his office together with the Dialysis Center provides services for the public. Even though he refers some of his patients there, he also refers some to the other center in town of which he has no ownership interest.

Has anyone run into this type of sticky situation? 

Thanks.

I'm curious to know if anyone has any language for use in a multi-employer plan QDRO that addresses how the AP's share will be affected in the event that the participant receives either a lump sum or installment payments as a result of the Plan's qualifying for funds under the recent Butch Lewis Act?

Thanks in advance! 

If a participant terminated let's say in July 2021 and made no further payments on the loan, but the loan was not reported on a 2021 1099-R, can the EMployer report under a 2022 1099-R under EPCRS?  I think yes.  The program indicates that this is an option in the event of a "deemed distribution under 72(p)."  Even though this is a loan offset when I look at 72(p) it seems sufficiently broad to conclude that what I describe is a deemed distribution under 72(p).  The terminology of course gives me pause so I'm not 100% confident in my  answer...  EPCRS Section 6.07 is the site.

So, suppose the 12/31/2021 statement was already mailed, but without the lifetime income illustration.  Can the illustration be sent now as a "stand alone" or must the EBS be re-sent with the lifetime illustration attached? I believe it is the latter -  I haven't seen anything allowing a stand-alone in this situation - wondered if I've missed anything. 

Has there been any guidance released relating to if or how the Annual Funding Notice should be modified to reflect the funding relief of the American Rescue Plan? I think the interest rate changes shouldn't be a big deal given the guidance from when MAP-21 was released, but should we attempt to demonstrate the impact on the MRC of the change from a 7-year to 15-year amortization period, along with an amortization fresh start?

Hi

Owner only DB plan. Hard frozen in 2021 before any benefit accrual. No income for 2021 and 2022. Also terminating in 2022.

Plan is slightly underfunded.

Software states fails 401a26. No PBGC coverage. Never had any employees.

As no key is benefitting, should pass 401a26 automatically, correct?

Thank you

The IRS is auditing a plan client and requesting proof that SPD's were distributed to plan participants. Further IRS is requesting specific proof that other notices were sent such as benefit statements that are required for DB plans every 3years. This is a small plan and no such proof exists since in most cases the SPD's and other disclosures were hand delivered or sent by regular mail. Participants can't recall specific SPD receipt.   I don't see any requirements under ERISA or the tax code requiring specific proof of delivery of SPD or other disclosures to participants, such as by certified mail. Further, regarding SPD's, even if the IRS claims SPD's were never distributed, becasue of lack of proof, I don't see any penalties under the tax code or ERISA. The only penalty I am aware of  is failure to provide an SPD to a plan participant upon request. No such participant SPD requests were made.

Group:

Client's ESOP is under audit. Along with a number of affiliated entities.

Due to health reasons clients' former TPA resigned in early 2021 and a new TPA was hired. 

The auditor has inquired about an alleged $22k contribution in the plan year under audit (2018).  However, the 5500 does not reflect any

contribution.

I can't seem to reconcile where the former TPA came up with the $22k of contributions.  Nor can I reconcile plan stock forfeitures.

We have already informed the auditor that a former TPA prepared the annual reports and 5500's.  and are working with the new TPA.  I'm well aware that the taxpayer/client may still be held liable for any record keeping fines/tax assessments notwithstanding errors caused by the former TPA.

Q:  Would you inform the auditor that there were no contributions and the auditor's report inadvertently stated that there was a contribution?

This does not change the participants share account values.

Also state that the taxpayer is in process with new tpa to amend the report to properly reflect no contributions.

Thoughts and comments appreciated.

If a US-based employer (with existing 401k plan) establishes a wholly owned subsidiary in Puerto Rico is there a requirement they either a) must setup a PR plan for those employees or b) if they do, is there a requirement to offer same match, PS, etc provisions.  Thank you