drakecohen

I greatly appreciate the feedback but past dealings with post-billing have been overwhelmingly positive especially with small plans with recurring annual work. This particular TPA was a reasonably good payer for 10 years and contacts at the TPA were diligent and compentent. Assuming they had business issues that I eventually picked up on but don't regret doing the work, if only for the experience. CCA is having an ethics webinar tomorrow where I hope to be able to bring this up.

Have been the EA for about 25 DB plans (mostly stand alone) for a TPA where we billed the TPA after we did the valuation which was a mutual understanding though nothing in writing. For 10 years payments came but early 2024 they stopped and have been sporadic since though valuation work done and forms submitted through 2024 plan year. Last partial payment was in July and outstanding fees are up to $30k, most for 2 plan years. What would be ethical ways to proceed to get paid (assuming will not be doing any further work for this TPA and not suing based on past experience): a) contact plan sponsors directly regarding the situation, b) provide names of plans to another TPA with the expectation they would contact the plan sponsors, c) amend 5500 fililngs for unpaid years (since we have filing authorizations) removing the SB, d) 1099 the TPA for the $30k, e) publicly name the TPA (like on this message board) as a warning to others? Are none, some, or all of these worth a try or are there better options?

Numbes look fine in you want to maximize A, B, and C though the plans I have typically only look to maximize A. The cost of maximizing in additional money going to NHCEs is 6.24% - 1.72% and since C is relatively young new compararability might not work better if a prime objective is maximizing C.

Is it possible that the DOL could hire the old TPA to do clean up work that would be easier for them to farm out? Does this happen and does anyone know how well DOL pays?

It will cost $1,000 in user fee but DFVCP has worked several times for me in the past. https://www.irs.gov/retirement-plans/penalty-relief-program-for-form-5500-ez-late-filers

I would do DFVCP first. Probably as $2,000 large plan but wondering if $750 small plan would be accepted. In any case, it would be a minor expense compared to the cost of an accountant's opinion.

Can anyone out there share their experiences with a 211 whistleblower filing regarding Employee Plans, specifically the timeline. Process described in 5251: https://www.irs.gov/pub/irs-pdf/p5251.pdf Case number has been assigned. What can be expected these days?

irs.gov still has 4.86: https://www.irs.gov/retirement-plans/pension-plan-funding-segment-rates but they do not have the January, 2024 rates up yet so maybe it will go to 4.97% when this link is updated.

15 looks like IRS is fishiing for non-amenders. 14a I left blank since answer no has two meanings: 1) Only one plan sponsored so no permissive aggregation; or 2) Used permissive aggregation but did not pass the test. For those who do not use the test would it be safer to leave question blank or answer no? ftwilliam does not give you an error either way.

Asked the same question on another board and answer was that the "PRI-2012 went to 5 decimal places."

We got one recently and also have an ACK number and the filing was listed as FILING RECEIVED on www.efast.dol.gov though in blue. In our case it was the SB attachment missing and we supplied that in response to the penalty notice and hoping for the best.

Company A with a 401(k) plan with a nondiscretionary SH is being acquired in a stock sale this coming week by company B which wants A to terminate their 401(k) plan B's lawyer insists that the plan can be terminated right away before the sale date but according to this IRS webpage on Participant Notices: https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-notices There is this that says 60 to 90 days notice of plan termination is required: Notice that the employer is terminating the plan When a plan is to be terminated, participants should receive a written notice of the company's intention to terminate the plan and a notice of plan benefits. See Terminating a Retirement Plan. Notice of intent to terminate: The Notice of Intent to Terminate should contain sufficient information to notify the participant of the termination of the plan. The notice might include identifying information such as: the plan name and number; the proposed termination date; a statement concerning the cessation of accruals (benefit accruals are ceasing); and a statement that there are sufficient plan assets to meet the accruals provided under the plan. The notice must be provided to all affected plan participants and/or beneficiaries at least 60 days and no more than 90 days before the proposed date of termination. I have had another situation where an actuary for a DB plan not covered by the PBGC and where benefit accruals had already been frozen did a retroactive termination (ie. doing the termination paperwork in February, 2023 with a date of termination of June 30, 2022) believing that the 60-90 day notice rule only applied to PBGC-covered plans since that was in the PBGCs website instructions for terminating a DB plan. Their argument was that since the DB plan here was not subject to PBGC coverage it was not subject to the 60-90 notice requirement.

Following up on this issue on the irs.gov page on Participant Notices (not separating DB and DC): https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-notices There is this that says 60 to 90 days notice of plan termination is required: Notice that the employer is terminating the plan When a plan is to be terminated, participants should receive a written notice of the company's intention to terminate the plan and a notice of plan benefits. See Terminating a Retirement Plan. Notice of intent to terminate: The Notice of Intent to Terminate should contain sufficient information to notify the participant of the termination of the plan. The notice might include identifying information such as: the plan name and number; the proposed termination date; a statement concerning the cessation of accruals (benefit accruals are ceasing); and a statement that there are sufficient plan assets to meet the accruals provided under the plan. The notice must be provided to all affected plan participants and/or beneficiaries at least 60 days and no more than 90 days before the proposed date of termination.

If the rank and file employee terminates and gets paid out during 2022 leaving only the owner/sponsor as a plan participant as of 12/31/22 would the filing for 2022 be a 5500-SF or 5500-EZ? Would it matter if the terminated participant got a contribution for 2022 thus benefiting under the plan for 2022?

We are setting up a plan effective 1/1/23. Only HCEs in the plan (doctors). About 25 participants, 15 of whom are partners. Issue is with an employee for 10 years who terminated in April, 2022, making a salary of under $135,000 for 2022. That employee was rehired mid-January 2023 and would need to be classified as NHCE for 2023 if eligible since not a partner. To get around including them can we have a single entry date (January 1) with a six-month wait? Since the rehire was not employed as of 1/1/23 then would they come in as of 1/1/24 or is there an issue with service spanning?

For 2022 a participant (age 50 spouse of owner) has W-2 salary of $27,500 with 401(k) deferrals of $27,000 and $1,100 in SH Match that has been deposited over the year. Is this possible?

A TPA friend of mine who still does a lot of ADP testing mentioned that this section of SECURE 2.0 could sink a lot of plans: Section 603, Elective deferrals generally limited to regular contribution limit. Under current law, catch-up contributions to a qualified retirement plan can be made on a pre-tax or Roth basis (if permitted by the plan sponsor). Section 603 provides all catch-up contributions to qualified retirement plans are subject to Roth tax treatment, effective for taxable years beginning after December 31, 2023. An exception is provided for employees with compensation of $145,000 or less (indexed). This is for 2024 so there is time to provide guidance but a lot of plans get around having to return excess deferrals to HCEs after a failed ADP test by recharacterizing deferrals for some HCEs as catch-up. Would this no longer be possible if the deferrals were all regular 401(k) as catch-ups would need to have been Roth?

Looking to confirm what date for plan termination can be for a qualified plan. For DC plans and non-PBGC-covered DB plans is it at least 15 days prior to the date of termination when notices need to be provided to participants? For PBGC-covered DB plans is it 60 - 90 days before date of termination when notice have to be provided?

If enacted in 2022 would it mean that 401(k) plans could be set up for sole proprietors in 2023 for 2022 on account of this: Section 317, Retroactive first year elective deferrals for sole proprietors. Under the SECURE Act, an employer may establish a new 401(k) plan after the end of the taxable year, but before the employer’s tax filing date and treat the plan as having been established on the last day of the taxable year. Such plans may be funded by employer contributions up to the employer’s tax filing date. Section 317 allows these plans, when they are sponsored by sole proprietors or singlemember LLCs, to receive employee contributions up to the date of the employee’s tax return filing date for the initial year. Section 317 is effective for plan years beginning after the date of enactment of this Act.

Thinking about working with Nationwide as a TPA for 401(k) plans. Does anybody have comments on pros and cons of working with them versus other platforms.

It's time. 500 clients - 280 being DB/CB plans, mostly small. Clients across the country but mostly NJ. EA would come to shepherd cases as necessary plus maybe one administrator. Any interest can contact directly: john@burypensions.com

Small company (4 HCEs of whom one is Key and 3 NHCEs) has had a SH match plan for years.They recently got very successful and want to add a Cash Balance for 2021 with Key EE getting $200,000 pay credit and as little as possible to others. Question is on one of the HCEs who has no balance in the current 401(k) since not making any deferrals and the client wants to continue to give him nothing though plan is top-heavy and will be even more top-heavy with the CB in place. Can this HCE be excluded from the Cash Balance plan and get nothing under the DC plan too even though profit sharing contributions will need to be made to NHCEs to meet the gateway? My thought is that he would need to get 5% of pay in the DC plan to cover TH minimum but I can see an argument to give him nothing or 3% of pay in DC since that HCE would be a participant in only one plan. Any consensus on this?

A client is looking to set up a Defined Benefit plan to maximize benefits for two partners. There would be 8 eligible employees - 4 HCEs (two 50% owners and two by attribution) and 4 NHCEs (two of whom are on average 10 years older than the owners) and the formula would be something like 60% of pay less the TRA offset. The proposal the client is looking for is to have the DB plan covering only the two owners (excluding the other HCEs) and the two younger NHCEs (though they would obviously eliminate the two older NHCEs by job description rather than age). 410 and 401(a)(26) look like they pass but would appreciate any feedback on other possible issues. Also, would there be other issues if they had an ongoing 401(k) with the 3%-of-pay nondiscretionary safe-harbor with all 8 participating? Would nondiscrimination testing be necessary? Thank you.

Thanks in advance for any feedback. This is a multi-part question about setting up a DB plan with unrelated business income. 50/50 partner with his son in an accounting firm gets unrelated income paid directly to him on a 1099-R. Let's say from serving on a Board of Directors. The Accounting firm has rank-and-file employees and a 401(k) plan that the partners maximize. 1) Can the senior partner set up a Defined Benefit plan using only the 1099-R income or is that precluded by controlled group rules? 2) If precluded, can the senior partner lower his ownership percentage or even give up ownership to be able to set up that DB plan? 3) If so, are there a number of years that need to go by of not being a partner (or less than 50% partner)? 4) Do ownership attribution rules apply here with the father/son partners?

A doctor, partner in a Medical Practice, covered by a 401k has separate Schedule C income for a separate location apart from the practice. Can the doctor set up a one-participant DB plan using only that Schedule C income? If not, can a separate DB plan be set up if the Schedule C income was not related to doctoring (ie. from writing articles or getting trustee fees)?