Brob69

Yes, supposed to have a 401(k) that's cross-tested.

Responding to Gina (and THANK YOU), yea the Trust was never funded. No monies were ever funded into a Plan. Nothing was ever sent to employees because they never had an implementation call. Only ones that know about anything is the TPA, Advisor and Owner. Doesn't seem that the TPA ever approached them about funding the Cash Balance prior to the minimum funding deadline for 2021. Just can't figure out whey they're bringing this up now.

Appreciate all the comments. We talked to the Administrator for the National TPA. Learned that they outsource the Actuarial work. The Administrator was under the impression that a 5500 wasn't needed until the assets got to $250k. Again, the client, a law firm, has employees. The Administrator checked back with his team and responded to us via email. Please take a look at his reply below in bolded italics and let me know your thoughts: Our firm is required to file a form called "Volume Submitted Defined Benefit Plan" with a list of plans on an annual basis to the IRS. This form includes a list of DB plans that our firm has assisted with during the year. Since this plan was adopted in 2021, it would have been reported to the IRS on our Volume Submitted in 2021. Ultimately, the decision on how to proceed rests with the plan sponsor. However, to properly address the situation, we recommend the following steps: Obtain a restoration quote to bring the plan into compliance for all plan years since 2021. Make the necessary minimum required contribution and address any penalties for unpaid minimum required contributions. Amend the plan to declare plan termination and distribute the plan assets. Please let me know if you would like us to provide a restoration quote or if you prefer that we proceed with our firms resignation. Our firm will be unable to continue with the plan administration unless the plan sponsor is willing to bring it up to compliance. I think he's a little confused (or maybe I am)? I talked to an Actuary friend with 30 years experience and he's not aware of a list of plans needing to be sent to the IRS. He also heard an ERISA Attorney one time say that there was a precedent that said "Plan was never funded, so the trust didn't exist, so the Plan never existed." Yea, I've heard of Volume Submitter Defined Benefit Plan, but he's saying Volume SUBMITTED Defined Benefit Plan?

I appreciate the comments. We talked to the TPA firm today. The Cash Balance Plan documents were signed on 4/13/22 and the Plan was initially supposed to be effective for the 2021 Plan Year. The TPA firm never billed them and the Plan never got through implementation. Since that point, there has been little communication from the TPA about the Cash Balance Plan. One would think that they would've picked up the phone on or before the 2021 minimum funding deadline and had a conversation with them about things, but they didn't. Not sure why they are bringing this up now?

Correction, I"m now finding that the Cash Balance was intended to be set up for the 2022 Plan Year, and all of the other facts remain the same. Wanting to also wish a Happy Thanksgiving to everyone out there in our retirement plan community, and thank everyone in advance for reviewing and possibly commenting.

A National TPA firm, which has a lot of turnover, is handling a Combo Plan for a Law Firm handling criminal law. The Law Firm thought they were going to implement a Cash Balance Plan in 2021 (yes, 2021) and apparently the message didn't get across, but they signed paperwork to start it. TPA firm is talking to them about penalties and have sent them an email on this. The plan has never been funded. Can they just pretend that it never happened? They don't want it opened. What are their options? I previously worked for a TPA firm and we set up a Safe Harbor 401(k) Plan for a 20 person construction company in November 2022 to start on 1/1/23. They never sent out notices about the Plan being started and no contributions ever came in. We checked with them and they decided they didn't want to do it, so we just allowed them to get out of it as though the Plan never existed. Can the Law Firm treat this the same way? Apparently, the TPA has set up a meeting and bringing their ERISA Attorney in.