The Secretary of the Treasury has the authority to waive the 60-day participant rollover deadline in the event of a federally declared disaster, such as, the corona virus.

Any word of this being part of any kind of relief bill? 

I'm a TPA & it's been asked if an individual could receive a 401k or IRA distribution at this time & then rollover to an IRA or qualified plan later even if after the 60-day deadline. 

This one is different.  401(k) plan was moved to a new platform.  A part of the agreement for investment advisor fees was to deduct a specified portion from the participant accounts on a quarterly basis.  This was properly disclosed to participants in timely notices.  Investment company failed to set up this fee deduction for six months.  Investment company's position on this:

"our position is to follow IRS correction principles of returning the plan to the state it would have been in if no error had occurred- in essence deducting fees from the participant’s accounts"

The investment advisors would rather forego the payment than deduct fees from participants.  I could not find anything that required a fix for something like this.  Anyone else have a similar situation?

Boy, the ramifications of this Corona Virus just keep cascading. The Dependent Care FSA's only provides reimbursement for approved day care expenses, etc. - so with most of the day cares shuttered, then participants may wish to reconsider having the deductions from their paychecks if they think they won't be able to use it all, right? I would certainly consider this an allowable situation to change an election... any thoughts on all this?

We have an outside asset company process distributions and prepare 1099-Rs. 

A lump sum distribution was processed in 2019. Federal withholding submitted. 1099-R generated. 

February 2020 - Per the participant, a stop payment was placed on the check and the funds were returned to the original plan. Withholding was not returned. 

Should we be correcting the 1099-R? What should be done with the withholding. It's a large asset provider, so I'm not sure that they will correct to return it. 

Thank you!  

Hi all-

Has anyone heard of IRS allowing or planning to allow deferments to plan loan payments or modification to plan loans in the midst of COVID-19?  We have some clients asking that we modify their loans to a lower rate and defer payments but I couldn't find anything that allowed them to do it.  

I've not seen anything regarding extending grace perionds for participant loan to prevent defaulting.  Has anyone seen anything?  I have a financial advisor telling me that defaults will not happen.

We have a new plan where the profit sharing is allocated as follows: .067% of plan compensation times number of years of service (max 15).  There are two HCE's, both with 15+ years of service. There are 103 NHCE with a varying degree of years of service. 

How would we test this? Due to the years of service variance of the nhce's the plan would easily fail gateway (if you were to cross test) but is it even subject to that? Would this be a Benefits, Rights, and Features perhaps?

Can a new collective bargaining agreement reduce benefits that have already been accrued by retired employees?  For instance if a new CBA states that the monthly pension payouts will be reduced offset by the amount of a Social Security check if the participant is drawing social security, can that be done legally if the person is vested with accrued credits and currently drawing a benefit that is not subject to a Social Security offset?  I was under the impression that both were considered earned income after the required years of service.

Can a CBA legally make this type of change to accrued benefits or would they be required to grandfather in the agreed pay at the time the CBA and Plan Document was changed?  If not what CBA/Plan Document would cover the current participant's future pay?  Does it matter if the participant is collecting disability or retirement?.

Hello, if a company is planning laying off employees due to Corona Virus, can they stop 401k contributions and would they restart when the employee resumes work?  Is there a difference between furlough and layed off for 401k deferrals start and stop? Thank you.

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?