Gilmore

Got it. Thanks.

I did a bit more research and found in the EOB, Ch 13A, Sec III, Pt B, 1.f.1, in which Sal describes regulations that require the DOL to issue regulations regarding the specifics of what needs to be posted, and what is considered an "intranet" site. In Sal's opinion, since regulations have not been issued, it is "presumed that no posting requirement applies until regulations are issued and become effective." It would be great if the 5500 instructions made that clearer.

Understood. What are the plan sponsor's options if the terminated participant refuses or does not act in a timely manner and needs to get the plan distributed? Thanks.

We have asked this question to the PBGC and have not received a response as of yet, so I was hoping someone may have had the same issue resolved. We have a terminating DB plan with about 60 participants. One participant was terminated earlier in the year by the plan sponsor after they determined that she was using false identification and a stolen SSN. Her estimated payout in the plan term is approximately $1200. She has not obtained a real SSN yet. What options does the plan sponsor have with respect to paying this participant her benefit? Thanks very much.

I guess it would depend on who communicates with the client. We use an outside actuary for our DB clients who almost never communicates with the client. Everything goes through us, so I would think it would be on us, and not the actuary, to inform the client. However, if I were the actuary, I would probably make it a practice to remind the TPA about the posting requirement when I send over the actuarial forms to the TPA.

Probably not relevant since there was no mention that this was a safe harbor match, but there is a timing requirement for safe harbor match allocated with each payroll.

Thank you Peter. Understood this not legal advice. We have always suggested to our clients to post both the 5500 and the SAR and have never had any push back. We have a new client (takeover), for which we just provided the 2017 SAR with our usual instructions. The client responded saying they have never in the past been instructed to post anything to their intranet, so I wanted just a bit of confirmation that we were not out of line with our instructions. Thanks for the follow up response.

Thank you for the responses. This is from the 5500-SF instructions: "Annual returns/reports filed under Title I of ERISA must be made available by plan administrators to plan participants and beneficiaries and by the DOL to the public pursuant to ERISA sections 104 and 106. Pursuant to Section 504 of the Pension Protection Act of 2006 (PPA), this availability for defined benefit pension plans must include the posting of identification and basic plan information and actuarial information (Form 5500-SF, Schedule SB or MB, and all of the Schedule SB or MB attachments) on any plan sponsor intranet website (or website maintained by the plan administrator on behalf of the plan sponsor) that is used for the purpose of communicating with employees and not the public. Section 504 also requires DOL to display such information on DOL’s website within 90 days after the filing of the plan’s annual return/report." Is the requirement to post to the intranet satisfied as CHC believes, with a summary document, or must the full 5500 be posted? Thanks.

The 5500 instructions, at least for DB plans, seem to indicate that the full form including Schedule SB or MB and attachments must be posted. I was assuming that meant the full 5500 for DC plans would need to be posted as well?

To satisfy the requirement to post 5500 information to the plan sponsor intranet, does that require the actual Form 5500 AND the SAR to be posted, just the 5500, or just the SAR? Thanks very much.

Thanks John. I think that the TPA the client was working with originally that prepared the documents he does have is still in existence, so I'm holding out some hope that we can get the letter that way, but in case not I appreciate the suggestion regarding the GUST doc.

Sole prop, one-participant plan, since inception 1/1/2005. Original document is a GUST document. Has been amended for all good faith required amendments up to EGTRRA, but was not restated for EGTRRA or PPA. Is the appropriate VCP correction to adopt retroactive EGTRRA and PPA restatements (without any PPA good faith amendments), and can this be accomplished with one "VCP Kit"? In other words, one set of forms, including Form 14568-B, checking off the appropriate boxes for the EGTRRA restatement and the PPA restatement, with one $1500 fee? Also, will the IRS disallow the application if the sole prop cannot locate the advisory letter for the GUST volume submitter? Thanks very much.

Thanks everyone. I probably should have gone to the 5500 instructions first. The instructions for Line 5: "Line 5. Enter in element (a) the total number of participants at the beginning of the plan year.", includes: For pension benefit plans, “alternate payees” entitled to benefits under a qualified domestic relations order (QDRO) are not to be counted as participants for this line.

Not sure if this is the correct forum for this question, but... Owner only 401(k), assets under $250k, has not filed 5500s. Owner in the process of divorce, anticipating a QDRO. If the plan doc allows the ex-spouse to establish an account in the plan and leave the funds in the plan, would I be correct that the plan is no longer a solo 401k and would require a 5500? What if the ex-spouse does distribute the funds, but it takes 30 or 60 days to do so. Does that period of time require that a 5500 be filed? Thanks.

Thanks Golf. I believe we are completely on the same page. Appreciate the dialogue.

I get that their problem is not our problem, but I do feel that it is our job to let the client know the consequences of the choice that they make, for example, not filing vs filing when there are late deposits. Not trying to be argumentative, I was just attempting to learn the experience of the other responding TPAs as to the frequency of a follow up from DOL when VFCP has not been filed. We may be overly conservative when advising our clients. However, I'm also in agreement with Smith, that we don't use the calculator unless the client files under VFCP.

So then the client is advised that self correcting, and listing the late deposit on the 5500 could result in a follow up from the DOL, regarding their "voluntary" correction program? Just curious. When we present that to our clients, most have opted to file the application, but it sounds like from above that others are able to self correct without further action? I certainly wouldn't mind doing fewer VFCP filings.

Thanks for the link to the prior discussion. Does anyone know of any IRS guidance/opinions on the topic. Is there a problem for the plan administrator with honoring the participant's request to stop making loan payments and at the same time following the plan's inservice distribution provisions? Can an owner or other Key Employee also request that their payments be stopped? Thanks.

If not submitting a VFCP app, are you still listing the late deposit amount on the 5500? And if so, is there an amount that, if less than, typically does not trigger the DOL follow up letter re the program? Thanks.

Thanks for the additional confirmation CJ. Not to get off on a tangent, but how far can the participant push it in a state that allows voluntary stopping of loan repayments? If the plan's loan procedures require repayments by payroll deduction, and the participant voluntarily enters into a loan note that indicates such, do they retain the right to stop those payments at any time?

I see, so where I was thinking "enforce the loan" meant enforcing the terms of the loan note, which clearly were already violated by the plan sponsor, you're saying "enforce the loan" means following the rules regarding a deemed loan with respect to the balance remaining outstanding and interest accruing. And that certainly answers my second question regarding what would the loan payments amounts be going forward. Thank you very much.

Thanks. I'm looking at a section in the EOB called, "Obligation to repay not waived because of deemed distribution". In that section Sal states, "In fact, there is still a fiduciary requirement to enforce the loan, since ERISA requires the governing documents of the plan be followed (e.g., the written loan provisions or loan policy that is part of the plan), and to protect the benefits of the plan participant." If the loan procedures require that loans must be repaid through salary deductions, would the plan sponsor be required to, or at least have the authority to, require the repayment of the loan per the loan procedures even if payments are started after the cure period due to the error?

Plan sponsor discovers in 2018 they did not start payments on a loan from June, 2017. They would have considered VCP, but with the fee going from $300 to $3000, they are going to treat the loan as a deemed distribution. The loan plus accrued earnings remains outstanding, but is the employer permitted to force the participant to begin making payments, or is that strictly voluntary on the part of the participant? If repayments are to start, is there any reason to reamortize to keep the loan within the original 5 year payback, or can the original loan payments be started without adjustment, since the loan is already defaulted? Thanks.

Thanks. It's a little confusing when the IRS makes that cross reference between errors. Also the EOB describes a "missed deferral opportunity" and seems to indicate that the missed deferral opportunity could be either the improper exclusion so the participant was not allowed to deferral at all, or the failure to implement at change, from say 3% to 5%. I guess trying to argue for 25% would be too aggressive. Appreciate your taking the time to respond.

So you are thinking that the correction QNEC should be 50% of the missed deferral amount, and the cross reference to #6 would not open the door to using 25%, regardless of the timing of the correction? Thanks.