Effen

Thank you for your dedication David. Hopefully someone will pick up the torch.

Sorry, I was primarily meaning that you need to craft your language carefully to avoid unintended consequences.

Not all that uncommon, especially in hourly based plans. You should check your current definition of service and make sure it isn't already counted. Assuming it is not discriminatory, they could always amend the plan to include additional service credits from a fixed time period for certain group of employees. Be careful about including/excluding participants who didn't return to work. Maybe something like, all participants who were actively employed on 1/1/2020 and also actively employed on 1/1/21 will be granted 1 year of credited service notwithstanding the actual hours worked during that period. Probably need to defined "active", but you get the idea. We have also seen sponsors wanting to boost benefits to make up for COVID related pay cuts.

I assume the plan is still active and you are earning new benefits annually? The "fairness" is that your ultimate benefit is probably based on ALL of your service. Those initial years when you were married still count in the determination of your ultimate benefit. If the benefit formula is X% of your final average compensation, times years of service, those initial years are multiplied by your final compensation. Therefore, the value of the benefit you earned in those initial years is based on your final average compensation. Since you were married during that period, the AP is entitled to a share of the value of the benefit earned during that period. This is a very common provision in QDROs.

Also don't forget about discrimination testing. If you are granting more than 5 years, you need to demonstrate that it is not discriminatory.

Not true. It is required. It is just not required to be filed.

Are you contemplating doing something you have never done, or are you trying to confirm if you employees are taking too long? A lot depends on how serious you take them to start with. Are they something you want to be 100% accurate and completed in accordance with the instructions, or is it "government work" that just needs to be completed so that it won't bounce back? Will you charge the client if they get bounced or will you eat that time? There are people who make their living explaining how to do 5500s. They can suck a lot of time if you want them to be perfect. Are you doing full 5500 w/ audits, or EZs and SFs? Big difference in cost and auditor interaction. Are you counting time for the SB, including verification of contributions, obtaining sponsor elections, maintenance of FPB/COB? A lot depends on how you classify the time. I think your timing is reasonable for an EZ or SF, but would double or triple for full 5500 w/ audit requirements. In general, they take about 2X the amount you are able to bill for them. Also, consider posting on the 5500 board - you may get better responses.

Our policy is to create and sign the SB before the due date, then send it to the sponsor and tell them to keep it in their file. We also keep a copy in our files.

Due to the COVID extension, I think if they wait until 1/4/2021 to make the deposit, it could be counted for 2019, 2020, or 2021. You would need to amend the 2019 SB, but I think it would work. If they deposit it during 2020, I don't think it can be considered as a 2021 contribution.

Yes, as long as you do it for everyone else. In essence, you are just increasing the accrued benefit. As long as the increase can satisfy the applicable non-discrimination rules, you can do it. IOW, yes, but you can't do it if only HCEs would be eligible.

There is more to it, but generally a plan that doesn't benefit any HCEs is exempt from (a)(26). Also, .5% is not found in any Code or Regulation. There is nothing "official" saying it is required. The word "benefiting" is never defined in the Code. Paul Schultz released a memo to IRS field agents many many years ago stating they should challenge any "benefit" of < .5%. The theory is that anything less than a .5% DB accrual is not a material "benefit". The IRS took this position because they knew it would cost sponsor less than the cost of litigation and therefore no one would ever challenge them. Since no one has, it has become the standard definition of "benefiting". (b)Exceptions to section 401(a)(26) (1)Plans that do not benefit any highly compensated employees.— A plan, other than a frozen defined benefit plan as defined in § 1.401(a)(26)-2(b), satisfies section 401(a)(26) for a plan year if the plan is not a top-heavy plan under section 416 and the plan meets the following requirements:

can you be more specific Mr. Johnson.

I think we need more information. Was the merger a stock sale, or asset sale? Did NewCo purchase Company A's stock, or just the assets? I assume stock sale since if you are doing a short year tax filing, Company A ceased to exist on 2/1? If that is true, than Company A's cash balance plan now belongs to NewCo. for YE 12/31/20, so the deduction is theirs?

Allocation from the suspense account is not constrained by the 25% deduction limit. It is only constrained by the 415 limit, which is min ($57,000,100% of comp). The client may need to forgo cash contributions until the XS is allocated, but in your situation you could allocate at least $114,000/year and easily absorb it within 7 years. If they are over 50, they would be able to make catch up contributions.

I don't think I have an issue with the form of payment, assuming it is permitted by the plan document, but how does this solve his excess assets problem or allow him to terminate the plan?

PBGC issues guidance related to delayed contributions. https://www.pbgc.gov/prac/single-employer-plan-sponsors-and-administrators-questions-and-answers

Do you mean can you hire someone to be the Trustee? Most large banks and financial institutions will provide this service, but it generally isn't cost effective, or desired, with smaller pension plans.

Search button is your friend.

I don't think the rule is as black/white as you think. Personal experience is that most view this as a change in actuarial firms. The instructions state "Complete Part III if there was a termination in the appointment of an accountant or enrolled actuary". An "accountant" has never been interpreted as an individual as accounting firms often change the entire audit team each year and I think the same argument can be made for the actuary. I have seen some firms report internal changes, but I don't think it is very common. 1) No issue because the filing is not incorrect 2) No liability on your part. The service agreement is with the firm, not the individual actuary. Once you left the firm, you are no longer responsible. 3) If you retained the work at a different firm, I would show that as a change. However, this brings up an interesting question for small plan land. TPAs that outsource actuarial work and hire independent people to review their work. I guess I feel a little differently if the TPA changes from basement actuary A to spare bedroom actuary B. That feels more like a change of actuary even though both might have signed using TPA's address and firm name. I was assuming you left one actuarial firm for another, but if you are an independent signing stuff for a TPA, I might have a different opinion. Probably matters what your engagement letters say.

July 15 deadline won’t be postponed. The IRS has announced that the July 15 filing and payment deadline won’t be postponed. Individuals unable to meet the July 15 filing deadline can request an automatic extension of time to file. However, tax payments are due on July 15. Automatic extensions of time to file a return. Taxpayers who need more time to file their federal income tax return can get an extension until October 15 by filing Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return, before the July 15 deadline. Taxpayers should estimate their tax liability on Form 4868 and pay any amount due when filing the form.

yes, but dancing partners are very difficult to find.

I suggest that you respond that you will provide the requested information, but will only provide the final SB after all outstanding fees have been paid. (Unless you already gave it to him.) Keep in mind, once he has what he needs from you, he has no incentive to pay the remaining 50%. You may want to increase that upfront piece to something closer to 100%. He has already demonstrated he doesn't want to pay you for the work you already did.

I don't think anyone "loves" time tracking software, but we used Time Slips for years and found it acceptable. You are able to have different billing rates and time codes that would make it easy to track billable and non-billable separately. We had a small office and only needed one local license. We all used Excel to actually track our activity, then we had one person dump our excel output into Time Slips once a week. You can also have multiple licenses and a cloud based setup where everyone enters their own, but we never needed it. Also, if you use PensionPro, they have a time tracking tool that can be added in. We played around with it for a few months but decided to stick with Time Slips, mostly because change is hard.

Are you saying the plan terminated in 2018 but still hasn't distributed assets? Yes, you are permitted to fund the plan in connection with a plan termination. However, due to the delay, the IRS might take the position the plan never actually terminated. Did you submit for a determination letter? I would need to research it, but for some reason I was thinking there was a time limit between termination and distribution. I think one year, but someone else will likely confirm.

I agree. That seems to be the building consensus of practitioners on other boards as well. That would also mean it should not be considered part of the assets as of 1/1/20. Therefore deferring past the original due date would increase the amount of the 2020 MRC and potentially increase the 2020 PBGC premium. Hopefully, we will have more guidance before the actual payments are due.