Rather shocking. We were asked to clean up a non-compliant plan. Just submitted an uncomplicated VCP filing in mid-October for failure to timely adopt a PPA document. Received IRS Compliance Statement already! Since I'm always quick to bash the IRS for taking too long, I have to give them kudos for doing this one so fast! Never had one turn around in 4 weeks previously.

Current plan year is from 12/1/18 to 11/30/19. Compensation is defined as calendar year ending within fiscal year. for this plan year, it is 2018 w-2.

Switching the plan year to 12/1/19 to 12/31/19 i.e. a short plan year.

Assuming that will need to use the full 2019 w-2 for the short plan year, what proration is required if any, dc and db plans purposes other than hours?

Thank you

Current plan year end is 9/30/19. RMD is taken for 2019 based on 9/30/18 balance - 1.401a9-5-Q&A3

Amending the plan year to a short year from 10/1/19 to 12/31/19.

As a calendar 2019 RMD is already taken, will there a need for further allocation requirement based on 9/30/19 balance?

If there is, what is the methodology?

Thank you

Although  this is a related topic, it is not connected to a different discussion I initiated in another recent thread.

When we do our 408b-2 disclosures, we specify the amount/formula for any Revenue Sharing all in the one disclosure document. However, I believe it is acceptable under the regulations to have this in more than one document, as long as the required information/format is used.

Just curious if folks out there generally combine all in one document, or use two or more. For example, a basic 408b-2 disclosure that has everything except the Revenue Sharing formula, and then referring to an attachment prepared/published by the mutual fund company that describes the specific Revenue Sharing amounts/formula/calculation?

Plan has a pooled account. Would there be a concern with placing terminated participants into a separate pooled account that just contains say a Money Market fund?

If a plan uses first day of each payroll period as an entry, does the plan sponsor start withholding deferrals on the pay date associated with that payroll? What if there is an overlapping paycheck? Example: Employee enters plan 10/27 (first day of next payroll period) with a 11/15 paydate. Paycheck on 11/1 for 10/13-10/26 pay period.

I have a client that is selling his medical practice (5/1/2020).  The buyers do not want to maintain the existing Company SIMPLE IRA Plan.

Can it be terminated since he did not give notice to the employees as of 11/1/2019?  Does the fact that he is selling his practice weigh in? 

I don't handle 403(b) plans, but it is my understanding that the financial data must be shown on the series 5500 filing if employee contributions are being made to the plan even if the employer is not contributing to the plan.  Am I correct about that?

Thank you

There is an upcoming conversion to another 401(k) plan provider/trustee

There are quarterly auto-enrollments into the plan. A notice will go out shortly advising of the January 1st entry into the plan. This notice will be sent by the current plan provider.

Because of the ACA provision, participants must have 30 days to make an election or they will be defaulted in at 3%.

The switch to the new plan provider will occur on December 20th.

There will be a blackout period beginning December 15th, ending January 15th  

There has been a sudden realization that the enrollment window has now shortened from December 1st to December 14th. Participants will not have 30 days to make an election.

Question: Any (!!) guidance will be appreciated. For example, would it be prudent to amend the plan to provide for a one-time extension of enrollment into the plan until after January 15st.

Prior year testing.  Take over plan

Plan excludes bonus

Failed 414(s) for year end 12/31/18

They used Total Compensation for the ADP Test for 12/31/18

This year do we run ADP using Total Compensation for HCE's since the number we have for the NHCEs from last year was TC?

Also what is the rule for changing from Prior Year to Current year .. Can we change or is there a 5 year wait?

ADP has been prior year for a long time.  ACP has been Current year and just changed to prior year last year.

Can a 3(16) Admin sign discretionary amendments on behalf of a client?

Group:

Facts:

Potential Biz Owner Client says in 2018 he started process of setting up S ESOP with effective start date of June 30, 2018. For a number of personal reasons and issues with a minority owner he has not gone through the steps. 

Fast forward to Nov 2019. Clients' cpa insists he can still set up S ESOP with June '18 start date.. And merely file late 5500's, pay late penalties and fees since biz owner intent was to have retirement plan set up for 2018 tax year. 

And I have always been under impression that retirement contributions (like ESOP'S) are due by  Sept 15th of following year. 

Assume Client cpa and attorney create and memorialize all necessary ESOP docs with effective 2018 tax year. And late contribution made in Dec 2019 (two months past deadline). 

Q: Even if Biz owner intent was to set up ESOP with an effective 2018 tax year, has anyone had success arguing with an auditor of reasons for late contribution? 

Any case or IRC, Dept of Labor guidelines that biz owner can rely on?

Thoughts and comments appreciated. 

Thank you 

Joe Dadich, Esq. 

I have a lifetime defined benefit pension from a plan rated GREEN, has $3 billion in assets, and is 86% funded.

Are there any lending entities who will lend against the monthly payment, if i have it contractually designated to be deposited

in the lender's account each month, and back it with a term life policy?

Have just recently had 3 or 4 different clients who are 12/31 PYE get notices from the IRS stating that their Form 5558 for 02/28/19 has been denied.  Extensions were filed for the 12/31/18 PYE for these clients, and their respective 5500s were filed timely.  No extension was ever submitted for these clients for a 02/28/19 PYE.

Anyone else encountering this, or am I just really lucky?

A Christian School sponsored 403(b) plan filed a 5500SF.  The plan has over 100 participants.  They indicated on the form they didn't purchase a fidelity bond. 
They have determined they are a 3121(w)(3)(a) organization and should not be covered by ERISA.  What measures can they take to stop filing 5500.  In addition, are they still required to perform an audit?

I have a terminated employee who was due an employer match after termination.  The entire participant account balance was distributed prior to the match deposit and the account closed.  There has been a lot of hassle trying to get an account reopened in order for  the match to be deposited and then distributed to the participant.  The broker is saying that the plan sponsor can just write the check directly to the participant and there is no reason to reopen the account.  I have searched and searched but cannot find any guidance on how to handle this.  Any thoughts or guidance would be appreciated.

The Plan Sponsor has a DB and a 401k PS plan with individual accounts.  Husband, Wife and 1 employee participate in both plans.  The husband currently has an investment in his 401k account for a mortgage to an unrelated party.  Repayments are made to the husband's account in the plan.  The Plan Sponsor called today and would like to issue another mortgage to another unrelated party for $200,000 from both the Husband and the Wife's accounts.  The Husband has approximately $990,000 in his 401k account and his Wife has approximately $400,000 in her account.  (They originally wanted to invest in a mortgage of $1,000,000 between them but it seemed too over the top.)  They also inquired about investing in a mortgage in the DB plan.

We do not recommend real estate investments within a plan but if they wanted to proceed with this, how should they go about it?  I personally think they should get an opinion from an ERISA Attorney well versed in real estate investments within a retirement plan.  Any advice, opinions would be greatly appreciated.

A profit sharing plan terminated in 2019.

Owner took RMD beginning of 2019 based on 2018 account balance..

Now that the plan assets are to be distributed, is it necessary for

the Owner to take another RMD  (distribution is being rolled over to an IRA)?  

When is the next RMD due , and what is it based on?

The SH plan in question will be increasing their match at some point during the 2020 plan year (plan year is calendar year).  The match is calculated on a per payroll basis and that will not change.  The plan will need to apply the new matching formula back to the first day of the plan year and re-distribute an updated SH notice.

If the increase happens after the first quarter of the plan year, will the plan also need to consider providing earnings as not all of the match would be deposited on a timely basis (i.e. quarterly)?  I believe that this is the EPCRS fix for late SH contributions when they are calculated on a per payroll basis but not allocated in a timely manner.

I would greatly appreciate any commentary on this.  Thank you.

We are in the process of restating a 403(b) plan for PPA.  It is a Church plan.

Prior AA had language that read:

In order to share in non-elective and matching contribution, the Employees who normally work more than 30 hours per week are eligible for all Employer Contributions and Forfeitures

Is this allowable?  I understand that Church plans are not subject to discrimination testing, but are they allowed to exceed the 1,000 hours requirement to receive an allocation?