Plan sponsor would like to use PPP loan proceeds to pay a portion of the administration expense. Expenses are billed quarterly, so there would be an amount due during the 8 week period. They would like to know if it would qualify for forgiveness if they use the money that way. 

I haven't looked into it much, but I'm leaning towards it wouldn't qualify since it seems to be limited to retirement plan contributions, not expenses. But i'm hoping one of you that has done all the reading and paid attention to the SBA information can confirm, or tell me if I'm mistaken. 

I retired on 2/29/2020 after 41 years at 66 years old. The company became an ESOP 4 years before retirement.  The comptroller says I should receive a distribution this year ( 2020), after the audit is completed in September +/-.  I would prefer to defer the first distribution until January 2021 since I have already received a large deferred comp payment of $120,000, plus I have 2 month's of income and we are getting about $18,000 dollars this year from Social Security due to my wife getting her full SS and myself getting a spousal benefit while my primary grows. I am trying to stay below the IRMMA threshold for Medicare ( 174,000).   Is there a way to have the distribution deferred?   Should I ask for them to make an amendment saying that the first payout may be taken as late as April 15 of the year following retirement, similar to RMD rules? Thanks for your help.

If a plan document requires terminated participants wait 1 year before they take a distribution, would implementing the Cares Act in the plan require the plan document to be amended to shorten the time terminated participants have to wait in order to get their money sooner than 1 year? 

EDIT: I just wanted to clarify that the participant was terminated because of Covid, so they would be a qualified individual.

Group:

I did not see a specific area to post this so I've posted here.

And I may not be asking the question properly so please bear with me.

12/31 fincls/tax return reflects $400k in bank account of entity owned by ESOP.

These are funds that were just paid into account and going to be used as loans for business purpose.

I recall a discussion some time ago on a similar issue but not sure if there was a complete answer

other than "it depends".

For valuation purposes, can the appraiser make the statement and assessment that those

funds are earmarked and not part of the overall valuation?   Which will reduce the overall value.

Also, I apologize that this is off topic, but I've recently had a contractor I worked with leave

the profession and am looking for a project-based individual with experience in ERISA/ESOP

related valuations and research. I am trying the Benefits Link job posting for the first time

and thought I'd add my request here. 

Thoughts and comments appreciated.

Can anyone recommend an attorney in southern California area?  Need to correct a document flaw

Final Rule released this morning, and is scheduled to be published on 5/27/20

Happy reading!2020-10951.pdf

In recent weeks, we’ve seen many BenefitsLink discussions about ambiguities and uncertainties in what the Paycheck Protection Program pays for.

In other contexts, a businessperson might get a written opinion to show that what one did, if later found to be incorrect, relied on a reasonable interpretation.  Applied for this context, one might seek a law firm’s or accounting firm’s written opinion that a borrower’s use of PPP assistance is a reasonable interpretation of the borrower’s documents and the guidance the government had published.

Is anyone doing this? 

Came across situation where business owners have been excluding multiple employees from 401k program. Most employees (5 current employees and unknown number former)were not informed of plan.(Some for over 10 yrs) they are all eligible. I’m not even sure how to start unwrapping this barrel of worms. Most asked about 401k on hire but we’re told wasn’t available. Doesn’t mention in employee benefit package So owners feel they don’t hav to offer access

I have a client who has about 60 employees, with a small portion being classified more or less as a leased employee that they send to other corporations (roughly 10% as of today fall in this class).  I don't foresee any issues with 403(b) or any other testing, given the size of the group, but currently they are offering a 401(k) Plan with a 4% Safe Harbor Match.  What they want to do is not be required to do the match for these leased employees, but want to be able to allow them to contribute.  

My first thought is to have two separate plans setup:

1) The current plan, just amending the document to excluded these leased employees, and continue with the 401(k) + Safe Harbor Match
2) A new plan (#002), which only covers the leased employees and have a 401(k) with a discretionary contribution

I can't think of any issues that may be caused by this, but I wanted to bounce it off everyone to make sure my thinking was correct and I wasn't overlooking anything.  I don't believe I can just excluded the leased employees from the Safe Harbor Match, but allow them to participate in the 401(k).

Thanks everyone and I hope everyone is well and staying safe.

We are early in the research process but a 403(b) plan that was created in 1989 apparently has never had a plan document.  I would like to eventually get them through VCP.  Would this be acceptable since we have nothing to go on?

Thanks

Referred to a 403(b) plan that was created in 1989 and has never filed a 5500.  Well under 100 participants.  I am not sure how far back any records go and what can be obtained.  

How far back can/should we go to correct via DFVCP? Also, is the DFVCP amount capped at $750 for non-profits no matter how many late filings?

Since this is a 403(b), I know that through the 2009 plan year, the information required on the 5500 was pretty limited.  I do not believe financial data was required.  Would this make 2010 plan year an acceptable starting point?

Thank you

Because there is a higher incidence of COVID-19 positive test results for residents of a long-term care facility (i.e., a nursing home), State X mandates that all residents and staff at the facility be tested for COVID-19 by a specified date. Those individuals who test negative are required to be retested within one week to rule out a false negative on the first test. There will only be a second retest if and to the extent that the Centers for Disease Control and Prevention mandate it. My question is, in light of the no cost-sharing of COVID-19 testing imposed by the Families First Coronavirus Response Act, as applied to a self-funded plan, does this mean that the plan (or employer) is saddled with the cost of conducting the testing? Can the plan deny coverage for the retest as not medically necessary?

Just found out that client is part of a controlled group since 2018 (even though we ask this question every year).  The transition period for coverage expired 12-31-19.

Plan #1 is a very small 401(k) plan with a generous match.  Because of the controlled group status, one participant who was NHCE is now HCE due to top paid group, and we had to redo the 2019 ADP/ACP testing which now fails.  QNECs will be contributed for 2019. 

Plan #2 is an 80-person 401(k) plan that converted to safe harbor match as of 1-1-20.  2019 ADP results remain the same and refunds were already made.

Plan #1 will not pass 410(b) for 2020, although plan #2 would pass, on a controlled group basis.

Is the only solution to combine both plans for ADP/ACP current year testing for 2020?  Plan #2 won't be happy with the prospect of a failed test and refunds for another year.

Thanks.

We have a client (CA corporation) who's employees are only his wife and himself.  They are in real estate investment.

Wife owns 100% of a second company who's employees do work for the husband's company.

They were told by their accountant that in this way the employees wouldn't have to be covered by the plan.

Is this a controlled group or not?

I believe CA is community property state and therefore each would be attributed direct ownership of the other's company.  And would this also be considered an affiliated service group?

Second related question:  We have another set of clients where the husband is 100% owner of a construction company and the wife is 100% owner of a property management company.  The two companies are totally separate and unrelated to each other.  Do we have a controlled group>

Got an interesting question just now.  Can we have a policy that says if you are ever an HCE then you will always be part of the 403b and you will never go back to the 401k.  The purpose would be to avoid people flipping back and forth between the two plans.

I can't think of anything that would prevent it.  I guess the only issue would be coverage.  So if I have NHCE's not covered by the 401k plan, I need to pass a coverage test.  But if we're talking about a larger organization where the NHCEs dramatically outnumber the HCE's (as happens to be the case on the inquiring client) that should be a non-issue.

Anyone have (or know where I can get) a copy of the basic plan document for the CitiStreet Associates LLC Prototype Non-Standardized 401(k) and Profit Sharing Plan #01? The form adoption agreement (all I have) is dated 2002.

TYIA!

401k plan changed payroll providers at the beginning of 2019.  For the first three payrolls of 2019, they accidentally keyed the employee deferral amounts into the company match line (not sure why that was even set up, since there isn't a match in the plan!).  The plan sponsor "fixed" this by taking the deferrals from the first two paychecks out of the third paycheck... but never took the next step of fixing the "match" from the third paycheck.  So the net effect is that there is a February 2019 payroll where the normal deferrals were paid by the employer.  Since this was never fixed, the W-2s have the wrong amount, in the sense that they don't match the deposits, and also if you multiply the deferral election times the compensation, it's not right... but the W-2 does match what was deducted from compensation, so is it really wrong?

Most of the amounts in question are <$50 per person, though there are a couple that are about $100.

What kind of correction should be made?  It seems like something needs to be done.  In the plan, the participant is not short any money; in fact, it's the employer who is short about $2K overall.  There is a profit sharing contribution to be done, but it's a set percentage (one of those few plans remaining) - I could recommend that the excess for each participant offset their profit sharing, but I'm not sure that's OK since it was an employer error.  It would feel that the employee would be losing out on the amount they should have in their account.

I am an experience benefits attorney but I have not had much ESOP experience, and I need to develop this skill. I would welcome any opinions about the resources and webinars available through NCEO or any other organizations. Thanks!

Former client (and someone I'm still friends with)  asked me to look over the mess of the new administrators (rhymes with Daysex).  Plan is a 3% Safe Harbor Non-discretionary.  For whatever reason the 3% has only been allocated to those employees that are deferring.  Last time I checked in on the friend, that battle was still being waged.  It wasn't resolved by the end of 2019 to any extent.  The client is a sole-proprietor with 10-15 long time employees.  So, maybe 12 are still due their SHNDC and the tax return of the Sole-P has yet to be processed. 

So, how does Daysex generate a 5500 for signature when so much is still incomplete?  Does anyone prepare a 5500 before the sole-p's income is known or final contributions receivable are calculated?  It's certain to be in the $60k-$75K range.  I guess, if I'm Daysex, I can say I only report what's on the books on December 31.  Never, ever have I seen this.