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?

I'm trying to better understand the potential HIPAA discount/surcharge issues where spouses and dependents are involved (setting aside ADA, GINA, etc. for the moment). 

Is it permissible to require all covered individuals (or perhaps at least spouses and adult dependent children) to be vaccinated to receive the discount (or avoid the surcharge)? I don't see the nondiscrimination regulations drawing a clear distinction, other than allowing the 30% incentive limit to be determined based on the cost of coverage including spouses/dependents where the spouse/dependent is also eligible for the incentive.

Or if the employee alone (or spouse alone) gets vaccinated, do you have to extend a partial incentive based on their individual compliance with the requirements?

Any input would be greatly appreciated.

A participant left employment for 1 day and was then rehired and is currently employed.  She wants to take her money out of the 401k  plan due to her being unemployed for that 1 day.  She cannot take it though because she is now employed again, correct?  No other in service withdrawal options would apply.

Thanks 

One of the Plan sponsor changed their Non-prototype plan to a prototype 401k plan, there also have a ESOP plan with a different record keeper.  The plan sponsor failed to amend the plan document when they changed it from Non-Prototype to Prototype.   The Plan sponsor now sent us the document stating they have amended the plan to include ESOP feature effective 07/31/2021, I believe they cannot do such an amendment on their own and it should be done by us since we are the record keeper for the 401k plan correct?  The plan sponsor states they were advised by they lawyers that when they added the Roth provision for ESOP purposes it required creating a KSOP. they were also told that this required (per government rules) both 401(k) and KSOP features be captured in a single document. They cannot be separate documents.  I've never encountered this before any thoughts how we can proceed with the termination on the 401k plan? 

Thanks

Good Morning - 

A participant took out a loan from his 401(k) plan on January 1, 2018 with repayments over a 5 year period ending on December 31, 2022. Participant was a qualified individual under the CARES Act and requested a suspension of the loan back in June 2020.  The loan was reamortized in January 2021 which extended the original repayment end date out one year to December 31, 2023. Participant is wanting to take out another loan, but the plan only allows one outstanding loan at a time.  However, the plan does permit loan refinancing and the participant is now requesting to refinance the loan.  The participant is looking to take out an additional amount and refinance to December 31, 2023.  Is there an issue since the replacement loan is technically more than 5 years from the existing loan's origination date of January 1, 2018? 

Hello, 

My company froze and canceled our CB plan. The payments are being distributed shortly, we were given a page to sign so we knew what $ we were each getting(it was the same amount for each person, 7 employees) minus the owner. But then, we were told there was “excess” funds and before distribution these excess funds would need to be figured out. 

what I don’t understand is this excess came out to $100,000 and it’s being split between all of us employees.. however, I am 27 and I am getting $300 of this 100k but someone whose 68 is getting $20,000 , someone whose 85 is getting $3,000 …. How does this make sense?? 

could I suggest they do an even split amongst all of us employees ? $300 seems ridiculous.  Seems age discriminatory.

I don’t understand all this CB stuff so bear with me, all I know is my boss put in $1k each year for EVERYONE 5% interest credit. I don’t see why the excess would be so randomly distributed 

Hi

I have almost no experience with missed funding deadlines - dealt with twice in my life time but both deposited prior to December 31st of the same year, following 9/15 deadline.

A brand new cash balance/401k-ps plan combo for 2020. Was told that 401k deferrals and safe harbor match was contributed timely.

The issues are the CB deposit and PS deposit.

I was approached for advice on the following:

• As the plan sponsor is totally broke, they can not make the 200k CB deposit (assume it is the minimum required - do not have the report to check), whatever the PS amount due (must make it to pass combo plan testing) or the 10% penalty on missed contributions. It is very unlikely that they will come up with the monies by 12/31/2021 and possibly never - business went south suddenly.
• Possibly covered by PBGC, not even sure if PBGC was alerted about missing contributions - I believe form 10?
• All participants were provided statements of benefits for both CB and PS for 2020

They want to send the IRS form 5330 with a letter explaining their situation and ask for any kind of  relief.

Based on my understanding, they may be late for filing 5330 unless they filed 5558 for a possible 6 month extension, but definitely late for 10% excise tax, correct? From what I read, IRS may impose additional late interest charges.

Not even sure if AFTAP was done and/or 101j notice was provided by 10/31/2021.

My immediate reaction was to freeze the plan asap but apparently they were told by the actuary, not doable. What???

Given that they may never be able to make any of the contributions, what can they do? If anyone has any experience, would appreciate any comments/suggestions.

What a mess.