I represent a multiemployer defined benefit plan. Employer X previously maintained a single employer defined benefit plan for its collectively bargained employees. X negotiated the merger of its plan into the multiemployer plan in 2005. However, because there were certain underfunded portions of benefits under its plan, under a merger agreemenet between the union covering X's employees and X, X agreed to make contributions for the underfunded portion to the multiemployer plan over a 10-year period with interest. Instead, X made a lump sum contribution of the underfunded portion plus interest to the multiemployer plan in 2006.  X withdraws from the plan in 2019. In assessing X for withdrawal liability, the actuary treated the lump sum contribution to the plan as an employer contribution in determining the amount of X's withdrawal liability. X has filed a request for review of the fund's assessment challenging the treatment of the lump sum contribution as an employer contribution. Does the multiemployer plan have a reasonable argument for its treatment of such amount as en employer contribution for purposes of X's withdrawal liability calculation?

I am preparing a 5500 for a large welfare benefit plan.  The agent has informed me that one of the insurance companies failed to pay them commissions for several years and when this was discovered, they made one large payment of those commissions in 2020.  Would you report the entire amount paid on the 2020 Schedule A even though a majority of the amount reported was actually for other Plan Years?  I don't see anything in the instructions that address "back" commissions. 

Thanks!  

Hi

I am no expert on 8955-SSA but was having a discussion with a TPA.

Whenever there is a termination of a participant and the participant is not paid out by the end of the plan year following termination, I file 8955-SSA, regardless of plan type. I have always known this way.

The discussion is about the "deferred benefit" which the TPA stated that is only applicable when the benefit/account balance is not due till NRA i.e. plan does not pay benefits till NRA.

Also, TPA stated that if only a 401k/safe harbor plan, does not need to file 8955-SSA (all benefits are 100% vested at all time). Is this correct per instructions "Plan administrators of plans subject to the vesting standards of section 203 of ERISA must file Form 8955-SSA."?

Are there any situations where 8955-SSA is not required to be filed for any qualified DC and/or DB plans? Let's leave 403b plans out and this is a question for DC or DB plans. Terminated participants may have partial or full vested benefits.

Does it matter if the DC plan is a money purchase plan or a profit sharing plan where the normal form is J&S?

What am I missing here?

Thank you

Company name Two River Phrenologists

On 5500 and plan docs over the years (for whatever reason) it was listed as Two Rivers Phrenology. 

The Plan has an identical naming issue.

We are correcting the plan docs going forward, and will make the change on the 2020 5500.

Will I have to complete question 4 about the name change?  Or will it not matter, that one little letter?

We have a 401(k) Plan participant with a balance in the plan, DOB in 1946, still employed, is a non-key.  

This year (2021), the company was purchased by another business.  The old company is no longer in existence and the 401k plan is being terminated (not a plan merger).  The new owner has hired most of the prior company's employees, including the above individual, and is crediting service with the prior business for all purposes in the new owner's 401k plan.  Balances from the old plan can be rolled into the new plan immediately.

Would an RMD be needed for this individual this year?  We could do the RMD before she rolls her balance into the new employer's plan or after the rollover?  And if one is required from the old plan, would it also be required from the new plan in subsequent years even though she would continue to be employed?

Thank you.

I have a new client that hadn't funded a required contribution for multiple years.  They funded those contributions, with added interest, in '21.  The question is, when are these contributions deductible on their taxes (they hadn't been taking the deduction, since the contribution had never been made).

1) Is it deductible in the year it was originally due?

2) Can they take the deduction in 2020 (it was funded in early '21, before the due date of ER contributions)?

3) Is it deductible in 2021, since that's the year it was made?

I'm not an accountant, so I'm not sure.

Thanks in advance!

We have a catch-up eligible employee who is participating in two "plans" adopted by unrelated employers. The employers are part of the same MEP, but tested separately. 

If the participant is due an ADP test refund in both plans, can we use up to $6,500 catch up to offset in each plan? 

I believe the regs allow catch up offset exceeding $6,500 across unrelated employers in SEPs, but we are wondering if the same rules apply to an MEP. 

Hi Team! Looking for a Study that defines Roles/titles as well as Compensation levels for the Employer Sponsored Retirement Plan industry.

As our team grows it's important for us to have an idea of what the industry is calling for so we stay competitive.

Hoping someone has a resource or contact.  Thanks!  

I have an individual client who's employer is stating he voluntarily terminated employment because of job abandonment.  However, he did not abandon his job but left (with the employers permission) on a Tuesday after they refused to pay him a commission on a large deal which violated his employment agreement because he was very upset.  His attorney sent the employer a demand letter the next day requesting how they were changing his prior employment agreement and indicated the employee would be taking vacation days until the employer responded.   The issue is that employer is stating he voluntarily resigned when he didn't and wanted to remain working there but couldn't get them to agree that they were changing his employment agreement.

He elected COBRA, (the employer has less than 20 employees so  it officially falls under the state continuation plan) but without knowing the monthly premium cost.  When he received the amounts($3,400/month for he and his family), he did not proceed with COBRA and didn't make any payments.  He is still within his COBRA eligibility window and therefore submitted his request for treatment as an AEI, but the employer returned it to him denying coverage due to "loss of employment was voluntary".  

The DOL/EBSA cannot assist because they don't have jurisdiction over state continuation plans and his state department of insurance is indicating they can only help with Insurance Company or Agent issues.  

Does anyone have any suggestions on how he can either get this resolved or where he can get legal assistance?  Most of the law firms he has spoken to deal with employers and not individuals so he's at a loss of where to turn.

Thanks in advance for your thoughts!

C

I have a plan that hasn't had a distribution is a few years (since 2016).  How can I find out if the Trust ID has been deactivated?

Ahoy, could someone do me a big favor and take a call from an attorney friend of mine who might be taking a plan sponsor into the PBGC mediation program that was started in 2019? He'd like to find out a little more ahead of time. It's a single-employer plan.

Feel free to post a reply here, or contact me via the "Message" button on my "profile" (click on my name). Thanks!

We have an opportunity to establish two DB plans for a municipality but our actuary does not have a plan document that can be used.  Does anyone know a good actuary or attorney who can draft these documents?  Illustrations have been done following the provisions of another municipality (we have their plan documents) and the decision-makers were happy with the results so the provisions can be copied from that municipality's plans.  We are in the finalist stage and need to get a quote together so please reach-out if you can do them or if you have a good recommendation.

I have a client where the owner sold the company, with all of the employees being hired by the new company.

The Plan itself is staying open for a few years, as the owner working as a consultant for who she sold to and getting paid through the old company.

Basically, all of the employees are terminated except the owner and her son.

The question is, in this type of situation what happens to the participant's vesting?  I know on a plan termination everyone is automatically 100% vested, but this isn't a plan termination.  But in this case, does that still apply?

Thanks in advance!

Hey, everyone - First time caller!

I have a client with a Standard Health FSA. It operates on a calendar year basis. However, the employer's payroll processes two weeks in arrears. 

Tax question as to whether the employer can deduct the final payroll from 2020 when the final payroll for 2020 is actually not paid out until the first payroll period in 2021. In other words, the work performed between December 15 and December 31 is paid on the January 15 payroll. That first payroll for 2021 is included as income for the 2021 W-2s - not 2020.

Has anyone dealt with this? The plan language is vague as to "compensation". Trying to determine whether there are different deductibility rules for cash basis versus accrual basis accounting.

Thanks!

Schedule H to the Form 14568 requires an explanation as to why the IRS should waive penalties under 4974 in the case of an employee-owner who failed to take RMDs on schedule. What are the circumstances that would qualify here? I am not sure why you need an explanation specifically for an employee owner and not anyone who doesn't take an RMD. Thanks. 

I'm hoping to get others' input on the correct standard for the future performance of substantial services under 457(f) for non-elective employer payments. Under section 1.457-12(e)(1)(ii) of the proposed regulations, "the determination of whether an amount of compensation is conditioned on the future performance of substantial services is based on the relevant facts and circumstances, such as whether the hours required to be performed during the relevant period are substantial in relation to the amount of compensation." There is no minimum vesting period in the proposed regulations or preamble.

When adding to current compensation or extending a substantial risk of forfeiture, proposed regulation 1.457-12(e)(2)(iii) requires performance of at least two years of future substantial services.

Under example 1 in proposed regulation 1.457-12(e)(3), a one-year (January to January) vesting period is implemented, which goes unmentioned as the example is aimed at an insubstantial amount of post-termination consulting services. One would think that if a two-year minimum deferral were required to begin with, the example would not need to resort to measuring the amount of work performed during the one-year period (or would use a longer duration). But the general substantial risk of forfeiture rule only looks at the amount of work performed, not the duration of the future services.

I know there has been a general rule of thumb stemming from section 83 that a minimum two-year deferral period is required to validly delay a substantial risk of forfeiture.

While it may be a matter of degree, I'm interested to hear others' takes on the following, all non-elective employer payments, all outside the short-term deferral date if the substantial risk of forfeiture is deemed not to take hold because it's less than two years:

• On July 1, 2021, employer awards employee a bonus payable on June 30, 2022, provided they remain employed full-time until the date of payment. 
• On December 1, 2021, employer awards employee a bonus payable on June 30, 2022, provided they remain employed full-time until the date of payment.
• On December 1, 2021, employer awards employee a bonus payable on June 30, 2023, provided they remain employed full-time until the date of payment.
• On December 1, 2021, employer awards employee two separate bonuses, one payable on June 30, 2022, and one payable on June 30, 2023, provided they remain employed until each separate payment date.
• On December 1, 2021, employer awards employee five separate bonuses, one payable on each succeeding June 30, provided they remain employed until each separate payment date.

Would anyone argue that some or all of these would immediately vest and be taxed on July 1, 2021, or December 1, 2021, as the case may be?

Participant dies and has no designation of beneficiary form.  The participant's spouse died 15 years ago.  The plan document provides for default beneficiaries as first spouse, if no spouse, then children equally.  There are 2 children.  I believe the 2 adult children are to both receive 50% of the participant's account.  The plan sponsors asked if this should go through probate.  It never entered my mind that this would go through probate since there are living children.  I'm not a lawyer.  I started to doubt myself.  I did a little research and it does appear that this would not go through probate.  It's not a large amount but still - need to be sure.  The plan administrator (doctor) would make the decision on this - but of course looks to us as TPA to tell them what to do.  Comments?  Thank you in advance.

I've been reading up on all of the rules regarding loan offsets and the ability to recontribute those amounts through the extended due date of their tax return following loan offset.  But what has not been made very clear anywhere is how these rules interplay with the ability to rollover the note itself following offset.  So in my example, loan offset was processed by the Plan as of April 30th based on their loan policy.  This employee was included in a group of employees that are "Spinning off" into a new entity. They want the employee to be able to roll the balance over to the new plan.  

Can I still rollover the note even after the loan offset?  That's the big question.  The final regs that came out 1.402(c)(3) seem to make no mention of this whatever.  1.401(a)(31)-16 definitely talks about rolling over notes following offset, but its not clear to me if the new regs extend the date on which that is allowable.  And even if it did, it raises other questions about the 5 year term as follows:

-What if the note is not rolled over for a year?  Presumably the loan would be reamortized as on an approved leave, but I figure someone must have written this down somewhere by now.

-What if the 5 year term is already over?  Presumably the new sponsor should not accept it (or maybe if the loan payments would exceed their paycheck).

Again it just seems like this should be addressed one way or another.  Can anyone point in the direction of what I am missing?

As many probably remember, initially it was indicated that a participant could take up to a $100,000 participant loan through the Cares Act. It was also described that the repayment could be deferred for up to a year. Then after reviewing closer, the year was to be no later than January 1, 2021. In any event, there was confusion on this. I thought I read something about how a repayment will be considered timely if it was made on or prior to February 28, 2021. Did anyone else remember this? I cannot seem to find anything on it. 

Thanks!

The plan document provides that the plan year end is the last Friday of the December. 

The plan runs from 12/28/2019 - 12/24/2020 so form 5500 and 8955 were filed on the 2019 Forms.  For 12/25/2020 - 12/31/2021 the Form 5500 and 8955 will be filed on the 2020 Forms.

My biggest concern is that 2021 form 5500 and 8955 would then be skipped because there is no plan year that starts in 2021. The next plan year is 1/1/2022-12/30/2022.  Due to the fact that the plan year starts in 2022 then the form 5500 and 8955 should be filed on the 2022 forms not the 2021 year.

 Another issue is that the year after would also be reported on the 2022 form 5500 and 8955 because the plan year is from 12/31/2022 – 12/29/2023. 

Any suggestions on how to handle this situation?