A small non-pbgc defined benefit plan with 12/31 year end terminates 11/30/2023. All assets are distributed by 5/31/2024.

1. Since this plan has a 12/31 plan year end, is the 2023 5500 filing date 7/31/2024 as usual? Or is it 6/30/2024 (7 months after the termination date)?

2. Or do you file 2023 by 7/31/2024 and then for the 2024 year by 12/31/2024 (7 months after all assets were distributed)? 

3. Or are there some other filing due dates?

Thank you!

If you hope for or fear tax and ERISA legislation nearing the end of the 118th Congress, watch in mid-December.

Based on Congress’s continuing resolution many expect they will enact by September 30, the next end of appropriations would be December 20. That’s the Friday before Christmas Day.

In the remaining session after 2024 elections, look for Congress to turn to the National Defense Authorization Act for fiscal year 2025, and to some effort to avoid or invoke a government shutdown.

Those efforts might include an appropriations or budget-reconciliation bill, which could include law changes the Senate could not vote on under a regular-order procedure.

My company is implementing voluntary layoffs due to short work. They are allowing us to keep our medical insurance but we are required to pay our premiums during the layoff period. Do I still receive my section 125 tax benefit for premiums paid? I want to ensure my W2 will be correct at year-end. Thank you for your help.

For all you folks who may be impacted, here's hoping you come through it with minimal effects. Best of luck!!

Prior to USERRA, please describe the stipulations on veterans' reemployment conformity and the associated impact on vesting/benefit accrual. Please provide a diachronic survey. 

We have an Employee Stock Purchase Plan (ESPP) that includes two offering periods each year, with purchase dates at the end of June and December.

My question is whether we should carry over any unused funds to the next purchase period or refund them to the employee. I would prefer to carry over the excess funds to the next period. However, what happens if an employee withdraws from the plan or chooses not to contribute in the next offering period?

Are there any potential issues with carrying over the funds in that case?

Thank you.

We have an ESOP where a participant can take a distribution after termination and they can sell the shares to the company.  Unfortunately, this is no longer sustainable, as we are having to repurchase shares at such a rate that it isn't feasible for budgetary reasons.

We want have been advised we should revise our distribution policy.  This makes sense -- if we can delay distributions, we can delay repurchases.

1. We want to do this for all non-terminated participants -- is that okay?  I found some guidance saying this works, and even some that says it might even work for terminated (non-payment status) participants, but that's unsettled.
2. I think the best option is to set a "lump-sum threshold," but I can't find any guidance regarding how to set that dollar amount.  Are there limits, or can we just set it at any amount we want?  I am aware that we are limited to five years of installments (unless over that ESOP threshold, but we don't have balances in excess of $1m), but are there any limits on how low we set the lump-sum threshold to be able to pay over the five years?

Is there anything else I'm missing?  Is there a better way to fix our repurchase obligation issues?

Employee is terminated on 11/1.  Group Health benefits terminate at the end of the month (11/30).  Employer uses a third-party administrator for COBRA and sends termination information over to COBRA administrator on 11/14.  What is the deadline for the third-party administrator to send out the COBRA election notice - 11/29 (14 days from notice) or 12/14 (14 days after benefits termination) or some other date?

I believe COBRA rules state that employers have 30 days to provide notice to plan administrator and 14 days for the plan admin to send election notices.

Employers only get 44 days to send notices if they send out their own COBRA letters directly, correct?

TIA

An individual is a sole proprietor and also is a partner in a partnership with 51% ownership and one other partner at 49%. I think this is a brother sister controlled group. Does this mean that the minority partner must be covered in the defined benefit plan of the sole proprietor to satisfy the 2 participant floor of 401(a)(26) considering the controlled group? If so, could a solution be for the  spouse to become  a W-2 employee of the sole proprietor and then cover the spouse to satisfy 401(a)(26)?

If an individual has two plans, a 401(k) and a defined benefit plan, and the defined benefit plan exceeds $250,000 in assets, but the 401(k) has not been funded, is it required to file a Form 5500-EZ for the 401(k) showing one participant and $0 in assets?

I have a small dental practice plan.  Sole owner is married with a minor child to spouse who has a sole-proprietorship business earning about $100k annually with no employees.  Both spouses participate in the plan, make employee deferrals and receive a SH match.  With the change in the rules for 2024, since the spouses no longer have to aggregate for testing purposes, I guess I now have a multiple-employer plan going forward.  Sole-proprietorship will be desirous of funding a PSP contribution on top of the match. Other than changing the employer type on the 2024 Form 5500 and adding the MEP addendum, is there anything else required on the government reporting side or the plan document side?

Hi

I have not worked on these plans well over 10 years.

Looking at a 5500-EZ that has been filed with no assets for many years. I was told that, technically these plans are not required to reflect assets, at least on 5500-EZ i.e. ok to file them blank.

I checked the 2023 EZ instructions and unless I missed it, did not find anything backing this up.

One set of instructions I found stated the do not need to file EZ unless assets are over 250k.

Am I missing anything on this?

Thanks

This is confusing and I do not have all of the facts, but hoping for some thoughts on whether this would fly

Owner has a small business and has a 401k plan.  Owner is also the exec director of a non profit.  

Exec director wants to start a 403b for the non-profit.

She also wants to move her business 401k into the new 403(b) as she wants to have her business payroll run through the non-profit.

Based on this alone, could we move the merge the 401k into the 403b and could the business employees participate in the new 403b plan?

I need to confirm if the business is being dissolved or will the owner still have the business.  And if the business is still around, the business really cannot be part of a 403b plan, correct?  But about the idea of running the business payroll through the non profit?  Is that a valid work-around to have the business employees participate in the 403b?

Thank you for any comments.  

Participant pay in 2021 means Participant is HCE in 2022.

Participant terminates 12/31/22 with pay $3,000 below HCE limit for 2022

Participant receives last paycheck in 2023 for $5,000 (ie $2,000 over HCE determination for 2022).

Pay definition is W-2 so final paycheck not included for plan purposes.

Our conclusion is to include Participant in 2023 ADP test as NHCE but wondering of other thoughts?

A lot of bigger companies use onboarding/hr systems that guide people through filling out employment paperwork. And some of them have a very low paid demographic for whom a "blind" application of auto enrollment would result in a nightmare for clients.  People making minimum wage have trouble paying for rent and groceries.  How do we feel about a form with the following options (paraphrasing)?  The point would be to get them to respond and make it easy for them to opt out.  There are often language barriers and technology challenges, etc.

By intialling here _____________,I confirm that the following statement applies to me:

I understand the automatic enrollment provisions of the Plan and I do not wish to be automatically enrolled in payroll deduction contributions, nor to have my contributions automatically increased each year. If and when I decide to contribute to the Plan I will make an affirmative payroll deduction contribution election. 

If no election is made above you will be automatically enrolled in the Plan as described in the Automatic Contribuion Arrangement Notice.

Hello! Apologies if I missed a prior conversation on this. Has the IRS issued guidance for a plan that does not timely operate in accordance with the 3% minimum auto-enroll (plus appropriate auto increase and 90 day withdrawals)? Also, what about plans with exemptions that no longer qualify mid-year since EACA has to be a full plan year?

Thanks for your thoughts!

A Plan has a short plan year running from 7/1/2022 through 12/31/2022.   For the 5500 filing, an auditor's report was not attached and the "it will be attached to the next Form 5500 pursuant to 29 CFR 2520.104-50" box is checked.    For the 1/1/2023-12/31/2023 5500, I figured that we would attach the auditor's report, which would cover the full period running from 7/1/2022-12/31/2023.    However, they also want us to file an amended 2022 short year return and attach the auditor's report.     From what I can tell, an amended return isn't necessarily required for the 2022 short year, just that you have to include the auditor's report with the 2023 return.      

Thoughts?

Some individual-account retirement plans that provide participant-directed investment lack designated investment alternatives. Instead, each participant gets a securities account with a bank or a securities broker-dealer. Trade lingo calls this a brokerage-window-only plan. According to an ERISA Advisory Council report, “BWO” is mostly with small (< 100 participants) plans, and especially plans with “fewer than 25 employees.”

A brokerage-window-only plan calls the plan’s trustee to open and maintain a securities account for each participant. Although the trustee is the account’s holder, the participant instructs the broker-dealer on what securities to buy, hold, or sell.

An automatic-contribution arrangement sometimes requires a plan’s administrator and trustee to act for a participant who does not communicate (other than by not counteracting an automatic-contribution notice).

About a broker-dealer’s account-opening forms (or anything needed to maintain an account):

Does anything require a signature from the participant?

Does anything require information about a participant that the plan’s administrator lacks?

Will a broker-dealer open an account if the individual’s profile information is incomplete?

Did some brokerage-window-only plans have, before any I.R.C. § 414A condition, an automatic-contribution arrangement? Did it work, or have there been difficulties?

If your clients include brokerage-window-only plans that have a § 401(k) arrangement (or will have one by 2025), do you expect difficulties in setting up and maintaining securities accounts for those participants who neither opt out nor affirmatively enroll?

So, I've seen various opinions on this.

One is that for purposes of DEFERRALS ONLY, (not employer contributions) the "less than 20 hour exclusion" is no longer valid at all, and therefore all employees must be allowed to defer under the universal availability rule, absent another valid exclusion category.

Another is that the "less than 20 hour" exclusion is still valid for deferrals, EXCEPT for LTPT employees. In other words, someone who works only, say,  6 hours per week could still be excluded for deferral purposes.

I'm not 100% sure which is correct. From a practical standpoint, since most plans (of ours, anyway) don't use the 20 hour exclusion anyway, it isn't a giant problem for most small plans regardless.

Thoughts?

I have a pension plan that is terminating.  A number of assets in the plan are LLC's that are near worthless, but not easily sellable.  The question is what is the best option to remove these assets from these plans before it is terminated.