austin3515

Client received CP283 notice. I know we can still file under DFVC Program and request abatement, my question is, has anyone done that recently and does it still generally work? I know never say never but curious if others have done it recently.

As we all know the IRS got rid of the "Flexible" match where you can just say the match is discretionary and come up with any formula operationally. The FT document has an option for a discretionary match (8a) where the options are "as a uniform percentage of Matched Employee Contributions" (which is of course the normal one) or "as a flat dollar amount for each Participant, which of course we don't really see. Here is my issue. I cannot find anywhere that, with respect to the "uniform percentage of Matched Employee Contributions", I am able to cap the Matched Employee Contributions at X%. So everyone has a match expressed as X% of the first Y% contributed (e.g., 50% of the first 6%). I cannot find anywhere in this document that I can include the Y% / 6% cap in my examples. Has anyone noticed this? People always say, "you can get to the same outcome if you use the maximum match section and cap the match at 3%" - that only works if you never change the match so it's not a great solution. To be honest, this was a real issue for me in the FT 401k plan as well, Cycle 3. I am very curious to know if they finaly figured this out for Cycle 4. As a sanity check I am just really hopeful other people have seen this too? Or maybe I'm missing something?

You’re circumventing payroll taxes is the bigger issue than retirement plans (both are big but the IRS wants its money. Employers are less of a credit risk than individuals

if they had 1099 income they should be able to do a Roth IRA. So maybe everyone gets what they want? We know clients are usually wrong when they code people as 1099-MISC employees but its not our problem. I'll bet all of our service agreements specify it's not our responsibility to make that determination.

That's what I do most of the time, with all of the same explanations, but some executives still want it. I've even had business owners want themselves to be the trustees of the trust to give the program more credibility (what do they care, they were never going to take it away anyway). But for sure 8 or 9 out of 10 I am just doing corporate brokerage accounts. It's the last 2 where I figure there must be a solution. It's not that complicated.

There is no lack of trust here, no one is worried about this, they just want to know what the right answer is.

Truth be told this was a question from an auditor I am friends with, so I don't even know the identity! This is what I can tell you. I have been a TPA for about a million years. Partners fund their contributions at any time through the date of their 1040 due date (or partnership return if earlier) and the words "late deposit" never left my lips in those conversations. And I don't think I missed anything by not mentioning it. Tell me I'm wrong :).

Anyone know of a brokerage account solution, no advisor attached, for these types of plans? I need a solution where we can have it registered to the trustee of a rabbi trust. In my experience advisors do not like working on these because the opportunity for accumulation is retty low. So I'm looking for a Fidelity/Charles Schwab type retail account where we can just fill out an application and open the account, no advisor comp. Anyone know of a solution?

https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/resource-center/advisory-opinions/1999-04a I saw this but I cannot figure out where the relevant part is. Anyone? Also this is the 100% owner of the business. I see the point of course about PriceWaterhouseCoopers (just to use an example that makes sense to all of us) withholding partners money and holding onto for it for 6 months... But this is definitely that.

The Applicable DOL Reg: Partners ARE the employer so they have no wages. You can't withhold something from yourself. So pretty clear that they are not subject to this. My question is this: Why can't find anything that says this, like a DOL Notice or an IRS FAQ or an article by a big law firm? Does anyone have anything to point to? I know the reg is pretty clear but this can't be the first time the topic has come up as an interesting question.

I mean I am pretty sure I have done this. The alternative is just not filing the one with <$250K but then you run the risk of getting the letter from the IRS looking for the missing filing. I guess option 3 is to assume "once required to file always required to file" but that hardly seems like a good option. Curious what others have done. I don't have 5500 software in my new position so not sure if its a warning or a filing error. if a filing error than obviously my suggestion would not work (unless filing a paper form).

My understanding is that when a 5500-EZ has less than 250,000 you can mark it as a final 5500, which is what tells the IRS that no filing is due for the following year. I don't see anything in the instructions about this but I think it is better to do this then just not file one in the following year.

BG150 I think I would: 1) File a 5500-SF for the final year that included a non-owner for any portion of the year (i.e., if the non-owner closed their account in 2025, then file an SF for 2025). 2) File a 5500-EZ in 2026, even if under $250K but mark it as a final 5500 (unless assets go over 250K by year end). 3) If a non-owner becomes eligible during 2026 then obviously keep filing SF.

John made me think of a scenario that could stink to high heaven. Owners and family are only employees on 7/1/2026. They are about to hire 10 more employees because they bought another location or something. They amend the plan to add a vesting schedule for everyone eligible on 7/1/2026. OK that would be a problem. I don't think that is normal though, usually there's a one or two HCE's per 20 people or so, and if you did the amendment on that date, as of that date this is a broadly available benefit, and to me you are covered. Again in all my years no one has ever suggested that different vesting schedules is something that has to be BRF tested in a way that the results deteriorate as time goes by.

I feel like it is a pretty normal thing to grandfther everyone in at 100% vesting and then add a vesting schedule for new hires. you can;t amend the old vesting schedule due to cutback rules. Could you forever be required to have immediate vesting (for example if all current employees are HCE's)? That hardly seems fair. Not saying it's not a BRF only that I've never heard of that as an issue for adding a vesting schedule prospectively to new participants. I've only ever heard of a problem going in the other direction (Cutbacks).

What was it the Citgo Doctrine? Or was it the Valero Doctrine? Oh right Chevron 🤣

I can see for sure how including it as a single holding within a CIT is feasible, FWIW. Thanks for posting this though!

I'll be curious to hear Empower and Fidelity's response. If they say this is a no go, then that's the end of that. Have they said anything? This is not a new topic of course.

🙄 Well I can't seem to find a way to rule this out...

“Our goal is to deliver on President Trump’s promise for a new golden age by fostering a retirement system that allows more Americans to retire with dignity,” said U.S. Secretary of Labor Lori Chavez-DeRemer. “This proposed rule will show how plans can consider products that better reflect the investment landscape as it exists today. This greater diversity will drive innovation and result in a major win for American workers, retirees, and their families.” https://www.dol.gov/newsroom/releases/ebsa/ebsa20260330 What I do not understand is, if you make private equity funds available to the public, that would make the private equity funds publicly traded. Wouldn’t that mean we need all of the protections that public investors receive through SEC filings, etc.? Imagine the disclosures needed for liquidity restrictions. I can see the place for this in a pooled, trustee directed plan (especially defined benefit), but not a participant directed one. I don’t get it.

Well on its face it is a true statement. Once you adopt the plan, simply not adopting it again is not enough to end your participation. With that being said I think you just do a new one today and have them execute it. All of their original information regarding the effective date of their participation is unchanged. Then you will have a participation agreement that more perfectly aligns with the new format of the plan document.

"Asymmetry" is much kinder than Bazaaro 🤣 Truthfully the word I wanted to use was probably not appropriate for a public forum!

New Jersey does not allow you to exclude from wages amounts you contribute to deferred compensation and retirement plans, other than 401(k) Plans. Specific plans that New Jersey does not allow taxpayers to exclude contributions to include, but are not limited to, plans under I.R.C. § 403(b), I.R.C. § 457, 409A, I.R.C. § 414(h), SEP, Federal Thrift Savings Funds, or Individual Retirement Accounts. Employer contributions to these plans receive tax-deferred treatment. In addition, both employee and employer contributions to SIMPLE IRAs, SEP, and SARSEP plans are included in taxable wages (neither receive tax-deferred treatment). https://www.nj.gov/treasury/taxation/njit5.shtml I came to learn of this through work on 457b plans. I had no idea how extensive their bizzarness was, including employer contributions to SIMPLE IRA's and SEPs. I am posting here because they do not even allow deductions for 403(b) Plans. This is really insane. Are people aware of this??

NOTE: If "Special schedule" is selected, the schedule must describe a formula from the options already available or a combination thereof (e.g., single rate formula applies to Group A; two rate formula applies to Group B), be objectively determinable and may not be specified in a manner that is subject to Employer discretion. Regardless I think your solution is the best possible option and that is what I will be doing... Thanks! The FT document is new form me...

I agree but that section is moot unless your using the YOS match. Are we in agreement that that has to be an oversight on their part right? Just makes no sense that that option is not there?