I have been monitoring both the IRS and DOL/EBSA websites to see if any special extensions will be given towards the Form 5500s. I realize that this not a natural disaster such as hurricane; never the less our situation with Covid 19 has brought many businesses to a complete stop. Has there been any hint of a special extension? 

Im curious what other smaller tpa firms (<5 ees) set up for business continuity plans? Customers are starting to ask. If looking to share thoughts more privately, dont hesitate to msg me directly. all thoughts appreciated!

Hi

Have a plan that has 4/15/2020 as the extended 5500/PBGC/SSA filing.

Unless I missed it, so far there is no extension, is that correct?

Thank you and be safe.

Has the deadline been extended for PPA Restatement of DB plans?

Hello,

If someone wants to do an IRA Conversion to Roth IRA, does that mean the taxes are paid at time of conversion for the IRA?  What federal taxes are withheld and I would assume normal state withholding would apply?  Thank you.

Does section 2202 of the CARES Act introduce a brand new in-service distribution category for 2020 coronavirus-related distributions by "qualifying individuals"?  Or does it still require employees to satisfy the existing IRS hardship safe harbors and then provide tax relief to hardship withdrawals that qualify as coronavirus-related distributions?

A plan freeze effective date is 3/15/2020.

Since participants haven’t accrued anything for 2020 yet, my understanding is the accrued benefit is based on  1-1-2020.

  In my case the 204(h) notice date was January 31, 2020 with the following information:

                   Effective for the Plan Year Beginning January 1, 2020, our company Defined Benefit Pension Plan will be amended to freeze Benefit Accruals. All prior accured benefits are not affected, and all actuarial valuation methods are the same.

If you disagree with me, how would you put it in the 204(h) notice.

Just curious if anyone has seen anything dealing with Participant enrollment disclosure and possible implications of different best interest regulations.  Thanks

Hard as this is to believe, this is the first time this has happened. Instead of "manually" signing it for us to file, the "manual" signature on the form is an electronic image of the manual signature.

I don't think this is any problem, yet I'm uncertain, and I wasn't quickly finding any guidance/FAQ's that addressed this squarely. I'm sure there is, but I wondered if anyone knew this off the top of their heads. Thanks.

CARES Act § 2202(b) revises or relieves Internal Revenue Code of 1986 § 72(p) to allow a participant loan up to 100% (instead of 50%) of a vested account.  But I see nothing that relaxes the conditions of a prohibited-transaction exemption under ERISA § 408(b)(1) or IRC § 4975(d)(1).

Both those exemptions require that a loan be “adequately secured”.  The Labor department’s rule (which governs for IRC § 4975 too) requires adequate security and provides “[n]o more than 50% of the present value of a participant’s vested accrued benefit may be considered by a plan as security for the outstanding balance of all plan loans made to that participant[.]”  29 C.F.R. § 2550.408b-1(f)(2)(i).

What should a practitioner say about whether to apply or ignore that 50% condition to a participant’s claim for a loan that otherwise would be proper?

My former employer has a pooled 401k account which issues an annual statement in early Spring. I retired at end of last year and had planned to rollover my money into an IRA in January but discovered that I could not request a distribution until the annual statements were issued. By the time I was allowed to request the distribution the market had tanked and my request was denied. Now I'm told that the company will be doing an interim valuation for all participant accounts including mine. Is this legit?

I have a Owner Only Cash Balance Pension Plan.  Plan was set up 12/28/2018 with effective date 1/1/2018.  2018 required funding was $80,486.  However contribution (made 9/13/2019) was $60,000.  So we have an minimum funding issue out of the gate.  Excise tax filed and paid (I believe).  2019 there is 0 cash flow to fund benefit and will result in another minimum funding deficiency for 2019 (this was known as of September, 2019 so is not COVID-19 related).  Have already reduced the benefit for 1/1/2020.  This Plan should have never been set up and completely fails the permanency requirement.

So my question here is whether 412 funding requirements apply to a disqualified plan?  Can I get the plan disqualified on permanency, terminate it and avoid a 2019 minimum funding excise tax on top of all the other tax?   

This is somewhat of a comment and question.  Like most of you out there in the pension community our firm has had to change our way of operating due to CO-VID 19.  We are a TPA Firm of 7 individuals.  Currently 5 individuals are trying to work remotely.  Our IT person set us up so that we can log in at home and access our work computer and our network.  We use the in house FIS/Relius system for our pension and document software.  Trying to get run Relius remotely was not working and we reached out to Relius about the issue.  They indicated that we would need to purchase a 12 month WAN license in order to run the pension system remotely.  I explained that working remotely was a temporary situation and that we only needed access for one or two months.

The Relius salesman reached back out to me and said that they could offer a 10% discount on their full 12 month license.  This would drop the annual fee from $3,000 to $2,700.  He also added that they could apply the $2,700 fee to the cost of the ASP service if we signed a new contract by May 31st.  Maybe other individuals out there feel that this is reasonable but to me this is a horrible response on the part of FIS/Relius.  We have been a client of theirs from the point that they bought our FDP.  I am seriously considering looking into other software systems  once life returns to normal.  

Does anyone have suggestions for a work around for the WAN license.  We cannot justify spending $2,700 for a one to two month fix.  

Thanks for any comments or suggestions.

Sponsor initially reported EE as hired in 07/2018, but turns out actual hire date was 06/13/18.  This means she entered plan 07/01/19 rather than 01/01/20, so we have lost opportunity to defer for 07/01/19 through 12/31/19.

Plan has only owner and this new EE, so there is no ADP for NHCEs other than her.  She probably won't be deferring, but I know that doesn't erase the lost opportunity when she might have deferred.  Plan has Deferrals and SH match.

Since we have no average deferral rate for NHCEs, it seems it would be best to assume 5% deferrals (minimum rate to get maximum SH Match), and 4% SH match.

Does this sound right?  What should QNEC be?  50% of deferrals plus all of SH match missed (total 6.5%), 50% of all contributions (total 4.5%), or what?

I know this probably sounds elementary, but it has been quite awhile since I had this situation.

Plan provides for a safe harbor match, allocated at the end of the plan year (not each payroll).  Calendar year plan, calendar year tax year for the plan sponsor.

Assuming notice requirement is met, the plan is amended to remove the safe harbor effective May 1, 2020.

Here comes the probably dumb question, but...

Am I correct that the timing for depositing the 2020 match accrued through May 1, 2020 is still the tax filing deadline for the 2020 tax year to be deductible for 2020, or 12/31/2021 if the year of deduction is not an issue for the plan sponsor?  I haven't seen anything that says the deposit deadline is accelerated, but that doesn't mean I didn't miss it somewhere.

Thanks very much.

Are new Plan loans permissible if the participant has been furloughed/laid off; and the Loan Agreement states that Payroll Deduction of the Loan Payment is required?

How is everyone handling this? I 

Had an exchange with an employee today - a client's CPA referred to a client's "Keogh" plan.   Our administrator didn't know what that term meant.  

I have a client who requested a distribution due to severance from employment. She received paperwork earlier this year stating she is entitled to $X as a distribution. She turned her paperwork in in early March. The Plan administrator is now telling her they are going to do an interim valuation on 3/31 to value her account and she will get whatever she is entitled to after that date.

The Plan includes the following language:

It is contemplated that the Trust Fund will be valued by the Trustee and
allocations made only on a Valuation Date. At any time that the Plan's valuations are not performed on a
daily basis, should it be necessary to make distributions under the provisions hereof and the Plan
Administrator in good faith determines that, because of (a) an extraordinary change in general economic
conditions, (b) the occurrence of some casualty materially affecting the value of the Trust Fund or a
substantial part thereof, or (c) a significant fluctuation in the value of the Trust Fund has occurred since the
immediately preceding Valuation Date, the Plan Administrator may, in his sole discretion, exercised in a
nondiscriminatory manner, prevent the payee from receiving a substantially greater or lesser amount than
what he would be entitled to, based on current values, and cause a re-valuation of the Trust Fund to be
made and a reallocation of the interests therein as of the date the payee's right of distribution becomes
fixed. The Plan Administrator's determination to make such special valuation and the valuation of the Trust
Fund as determined by the Trustee shall be conclusive and binding on all persons ever interested
hereunder. Such interim valuation shall not discriminate in favor of Highly Compensated Employees.

Is anyone aware of any case law or statute/regulation that interprets the language in bold? I am trying to determine when my client's right to a distribution became fixed. 

With the tax filing extension from 4.15 to 7.15, does anyone know if IRS has extended Form 5498 delivery date from 5.31 to something else?

With this date of constant market fluctuation, what is considered 50% of the balance to take a loan?  Is it the date the loan was requested, approved, or processed?  Below is what is says in code section 72(p).  I have a participant who requested a max loan on 3/9 and we are processing it today.  Of course, the balance is way less today, so his loan availability is much less today.  Would it be appropriate to process it today for the balance requested on 3/9 because it was 50% on the date he requested it?