Before PPA a late contribution creating a FD for a plan year was added to the plan assets for the following year funding computations.  Not clear as how  PPA changed this rule?

I have a pension plan that had a funding deficiency (FD) in 2018 plan year due to a late contribution of $30,000, which was deposited in Dec 2019. For the 2019 plan year the valuation date is changed from EOY to BOY. Under 4(A)(ii),  should the late contribution be included as a plan asset for funding purposes for 2019? SB instructions say not to include  such contributions in line 2(a) [ market value of assets] or 2(b) [Actuarial Value of plan assets]. 

OK, so this came out just now.  It is silent as to 404(a)(6) and IRAs.  Do employers automatically get til 7/15 to make and deduct their 2019 plan contributions? I think it should work for sole props and C corps whose returns are due 4/15 but get this automatic extension to 7/15.  It specifically extends the due date of the returns and 404(a)(6) references the due date of the return. 

Do IRA deposits also get an extension to 7/15? 

Quote

The relief provided in this section III is available solely with respect to Federal income tax payments (including payments of tax on self-employment income) and Federal income tax returns due on April 15, 2020, in respect of an Affected Taxpayer’s 2019 taxable year, and Federal estimated income tax payments (including payments of tax on self-employment income) due on April 15, 2020, for an Affected Taxpayer’s 2020 taxable year.

Any chance the IRS would provide relief for a plan sponsor (partnership) that filed their 2019 partnership return on 3/16/20 but was unable to fund the pension deductions reported on the return?

An extension was not filed.

Given the situation with the corona virus that has been developing over the past two weeks & the fact that they announced today that 4/15 filers have a 90-day extension to file their returns

would the IRS permit the plan sponsor to keep the pension deductions if the deposits are made as soon as possible?

Is there any recourse the plan sponsor can take to keep their deductions? VCP or SCP?

Hi, I hope everyone is/ and will be safe and healthy. I see there is talk about extension for the restatements. Is there any chance that the requirement to take the first RMD by  April 1st,  will be extended to a later date? Thank you.

https://www.winston.com/en/benefits-blast/coronavirus-tax-free-section-139-benefits-silver-lining-on-the-cloud-of-a-novel-disaster.html

Employer operates an essential business (power) and is offering to pay  (or provide reimbursement for)  to have additional employees lodged at facilities or near facilities (think either hotel or basically whatever they can come up with) along with transportation, food, child care, elder care etc... basically everything to have all hands on deck for this outbreak.

Trying to determine if these abnormal short duration benefits would be taxable, seems like the stafford act may , via a Section 139 program, to allow for the reimbursement of these expenses. Any thoughts on whether this may be permissible 

Since I know nothing about this - just curious. Thankfully, at least for now, this is an academic question. I understand the need for privacy, although in a very small employer situation, it is pretty much meaningless as everyone will be able to figure it out. Nevertheless, if I were to get the virus, I would WANT my employer to notify every employee, even if I worked at a large employer (as I did many years ago.) I would WANT everyone to know, in case they had any contact with me, or with any person who worked closely with me.

I assume it is ok for an employer to notify all employees, if the infected employee gives permission? Or are there still restrictions?

Here's hoping that none of us will ever be in a situation where we have to care about this. Hope y'all stay well and safe!!

I have a client that recently sold their business (ABC) to a private equity firm (XYZ). Before the sale the two owners Tom & John owned 50% each.

As of 10/31/19, they sold the business to the private equity firm, and the private equity firm took over as plan sponsor. How are the following affected:

1. Are the employees deemed to be terminated as of 10/31 from ABC and hired by XYZ on 11/1? Does this create an opportunity for employees to take distributions that are not 59.5?

2. For 2019 is testing based on the whole year or should it be split between 1/1-10/31 and 11/1-12/31?

3.Is anything else affected by the change?

4.Am I am overthinking this, and is it a situation where for plan purposes, it is as if nothing happend?

Was the ADP/ACP deadline this year Friday March 13 or Monday March 16? Does anyone recall the statutory cite for this?

Thanks!

This is probably a silly question - Can an employer deposit the $6,000 catch-up contribution to his account (for 2019 ) if the only source is a discretionary profit sharing?  Meaning, can his total PS contribution be $62,000?  Thanks!

Any input is appreciated for the scenario below:

Eligible employees were improperly excluded from plan participation in 2009. Plan was not SH but no ADP/ACP tests were run.

We correct in 2020:

• first we run the ADP/ACP tests for 2009
• if the tests fail, we correct the ADP/ACP
• we determine the correct contribution amounts based on EPCRS

QUESTION: do we need to re-run the ADP/ACP tests before making the corrective QNECs

Thanks

I have had no luck finding a clear answer so hopefully someone here can help.  Straight-forward stock acquisition - Company A acquired Company B on 2/1/2020 and they each maintain their own 401(k) plans.  Company A 401(k) uses the top-paid group election for the HCE definition while the Company B 401(k) does not.  I know plans within a control group must have the same HCE definition, but does the 410(b)(6)(c) transition period apply to making the HCE definitions identical?

These plans use compliance services from a mutual fund company.  The mutual fund company is telling them they must align the HCE definition in 2020 and amend one of the two plans.  I disagree and have always been very conservative when it comes to the "no significant change in the plan" part of 410(b)(6)(c).  Is there something that states the HCE definition must align immediately and am I being too conservative in my hesitation to amend plans during the transition period?

Do I have these options correct - have not done this in awhile.   Not sure if we will ever get any relief legislation in time to make any difference. 

Stop Match

      30 day notice, amend plan, subject to ADP/ACP, Fund to date of amendment, SUBJECT TO MINIMUM TOP HEAVY CONTRIBUTONS.  these may be more than the match requirement.

Terminate the Plan

     Stop Match as of date of plan determination, not subject to additional testing.

So an employer furloughs half its work force for 30 days. They are scheduled to come back in 30 days. 

They are still active correct?  And cannot take a distribution?

Similarly, they would be considered to be on a leave with respect to their loans?

Many companies are laying-off their workers temporarily to get them off their payroll and onto unemployment benefits.  Expect this will trigger lump-sum termination distributions to a lot of participants - especially at companies that extended 409A plans to lower and middle management HCEs. 

Luke - Thoughts?  Anything those employers can do?  Thanks!

Calendar year DB plan with approx. 50 participants. Covers all employees, 21 & 1 eligibility. 1000 hours required for accrual. Plan sponsor is considering freezing for 2020 but it may be that 3 or 4 participants will have worked 1000 hours by the freeze date. How will that work for 401(a)(26)? Does the fact that a few participants accrue nullify the frozen plan exemption? Note that the plan is slightly underfunded on a plan termination basis.

So one of the requirements to disconitnue Safe Harbor contributions is that the safe harbor notice had to say "the employer reserves the right to discontinue the safe harbor contribution."

Then comes the SECURE Act and says "you don;t need to send the safe harbor notice for 3% SHNEC plans,"  If we take that advice do we still get the flexibility of discontinunng the safe harbor?  Apparently there is an exception to this notice requirement if they are operating at an "economic loss" but I'm just wondering if they tricked us into eliminating an available option.

Note:  I have already discovered that this rule is essentially meaningless because we almost always include a discretionary ACP Safe Harbor Match even if we never use it.  And in this scenario a SH Notice is still required.

401k Plan Sponsor is depositing amounts to participant brokerage accounts to cover annual maintenance fees.  All participants have individual brokerage accounts.  Deposit per participant does not agree to exact Annual Account Maintenance Fee.  

I understand there is probably many potential problems with this scenario, but my question relates to whether it is "not allowed" for an employer to reimburse participant plan fees this way?  They are truly making individual deposits per person for a flat dollar amount.  

It has always been my understanding that if an Employer pays ANY money into a plan that it must be allocated as plan contributions based on the plan document.  Has anything surrounding this topic changed in the last few years?

Thanks!

I am curious how others are assisting their clients during these difficult times.

Are you providing them with advice related to Partial Plan Terms or other topics?

Thanks!

I assume with all the lay offs and business downsizing, clients will want to know if they can stop making their Discretionary Matches.   In the back of my mind, I seem to remember there can be issues changing the discretionary match mid year.   Can anyone provide guidance?

Thanks in advance!

So lots of partial plan terminations imminent or in progress,.  We all agree that in this scenario, assuming it is a calendar year plan, anyone who terminates at any time in 2020 (and for any reason) must become 100% vested.  Is that correct? 

Seems like now would be a good time for someone to challenge the IRS to repeal that dumb interpretation.  Even if they solve the problem it will be too late.