Effen

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.

I assume your question is about a traditional DB and not a cash balance plan? Assuming so, it would be a very poor/impossible design to use a one month stability period. I hope this is a hypothetical question and you really don't have such a creature. Your election package should state the relative value of the optional forms, and explain how interest rates impact the value of the lump sum. We always quote a lump sum amount, and a date of payment, with a comment that if the lump sum is paid after that date it is subject to change. If a participant delays returning the paperwork, or if there is a delay for some other reason beyond that stated date, we ask then to sign a new election form, especially if the lump sum goes down. Others maybe more lax, but that is our procedure. If the PA caused the delay and the lump sum declined, I am more sympathetic to the participant and recommend they receive the higher amount.

I was reading it differently. this statement implies he did not receive the payment by the date illustrated on the election form. Maybe he returned the paperwork late, maybe the PA issued the check late, but either way, it was issued after the date illustrated.

I think some of the "long story short" might be relevant. Did the PA tell him he needed to respond by a certain date? Did he submit the paperwork timely? Did the election package contain information about the impact of delaying the election? Whose "fault" was it that the distribution wasn't paid the first time? Once the timing became impossible on the first payment, I don't think the PA can just issue a check for a lower amount. They had no participant election to pay the smaller amount and therefore no authority to pay it.. They should have sent a new election package with updated amounts. Then the participant could have decided if they wanted the lower payment, or continued to defer the election. You might be able to argue that not cashing the check was the only avenue available to the participant. Now that rates are lower, he should re-submit his application and request an updated election package.

Not sure how the IRS could make that argument. What authority would they use to support it?

Always a good idea to review the COPC: The highlights were added by me. Precept 10: An Actuary shall perform Actuarial Services with courtesy and professional respect and shall cooperate with others in the Principal’s interest. ANNOTATION 10-4. An Actuary may be requested to advise a Principal for whom the Actuary knows or has reasonable grounds to believe that another actuary has provided, or is providing, Actuarial Services with respect to the same matter. In such event, the Actuary may choose to consult with such other actuary both to prepare adequately for the assignment and to make an informed judgment as to whether there are circumstances involving a potential violation of the Code that might affect acceptance of the assignment. The Actuary should request the Principal’s consent prior to such consultation. ANNOTATION 10-5. When a Principal has given consent for a new or additional actuary to consult with an Actuary with respect to a matter for which the Actuary is providing or has provided Actuarial Services, the Actuary shall cooperate in furnishing relevant information, subject to receiving reasonable compensation for the work required to assemble and transmit pertinent data and documents. The Actuary shall not refuse to consult or cooperate with the prospective new or additional actuary based upon unresolved compensation issues with the Principal unless such refusal is in accordance with a pre-existing agreement with the Principal. The Actuary need not provide any items of a proprietary nature, such as internal communications or computer programs. Maybe I need to edit my response. A strict reading of this would say if you don't have a service agreement, you cannot hold back your cooperation, but you are entitled to payment for work related to assembling and transmitting.

What does your service agreement say? Yes, the COPC states you need to provide the information, but you are also entitled to reasonable payment. You don't need to provide support for work he never paid for.

I agree with Jeff, but in those instances there is no reason for the sponsor to start a new corporation with a new EIN doing similar work.

Agree. The article does a nice job explaining the issues and solutions. I am including a link to the referenced article. https://www.asppa.org/news/browse-topics/defined-benefit-plan-termination-funding-deficiency

1. We don't really know yet how to complete the 2019 SB. We don't know if delaying the deposit until 1/1/2021 is treated as an unpaid 2019 contribution, or if there will be an extension on the 5500 due date, or if there will be a way to apply it to 2019. Personally, I think treating it as an unpaid minimum is the most logical. Either way, it is definitely not $0. The due date has been delayed, but the amount due isn't $0. 2. First question, why is the 2020 MRC =$0? You are not permitted to recognize the benefits waiver to determine the MRC. At the very least the 2020 MRC will exist because they never paid 2019. The unpaid amount from 2019 becomes part of the MRC in 2020. One way to handle this is if he doesn't make either the 2019 or 2020 MRC, both would eventually be subject to 10% excise tax. Once the plan is terminated and the assets are distributed, you are no longer required to file 5500s. Therefore, the sponsor can probably get out of the MRC, but they would owe a 10% excise tax on the unpaid amounts. The IRS might try to force him to pay the full MRC, but I don't think they would waste the effort for a one life plan, assuming there weren't other issues. If he is bankrupt, maybe he gets out of the 10% excise tax as well, but the IRS will fight harder for that. Also, just as an aside, the "majority owner waiver" is a PBGC thing, not an IRS thing. One life plans are generally not covered by PBGC. The plan document should already contain language related to the distribution of assets upon termination, included provisions for excess assets, and insufficient assets.

The rule is: "A private-sector qualified defined benefit plan is exempt from PBGC coverage if: It has not covered more than 25 active participants at any time since ERISA was enacted (September 2, 1974), and. It is established and maintained by a “professional service employer.”". Your plan document defines who is an active participant. If at any point you had more than 25, you are covered by PBGC. It doesn't really matter how many you have at the beginning of the year, or the end of the year. It is an "any day" test. Can you provide more detail around, "By some definitions there are 26 actives, 24 actives, and 22 actives"?

I have had one that requested that I not certify a range AFTAP. Plan is deemed to be < 80% and we sent notices that lump sums were restricted. Restrictions probably get lifted once I certify the final AFTAP. I actually have the opposite question, what if they want to use the prior year's AFTAP to avoid a suspension? If the sponsor elects to use the prior, do we still need to certify the current year's AFTAP, or is there just no current year's AFTAP?

I don't know, you have years of him representing himself as "married", and now he is saying he was never married. If I am the PA, I think I would want more information. He could just be lying again because he doesn't want to get spousal consent. Not sure what else you can ask him to do, but I would continue to reach out to PNHS and get her side of the story. Maybe you just pay him a J&S pending resolution? If he really was never married, and has signed that affidavit, you should inform him that you will be suing him and PNHS for fraud to recover years of excess medical coverage. Unfortunately, you probably can't hold his pension benefit as payment for the medical fraud, but I am sure those damages will be significant and he admitted he committed fraud. You need to talk to an attorney and file suit against both parties.

I definitely agree with Mike that the NOIT should have contained the language to begin with, but since it didn't, and some elected a lump sum, you can argue they don't need to know. I suppose someone could argue that they might have selected an annuity if they knew who you were buying it from, but that is probably a stretch. Unless you are going to give them the option of revising their election, not sure what the purpose would be served by waiting the 45 days to pay them, but waiting would be the conservative answer. Regarding Cathyw - the allocation of the excess assets just needs to be non-discriminatory. You don't have to give it to everyone, you just can't discriminate in favor of HCEs. There are an infinite number of acceptable solutions. Assuming the two you mentioned would not be discriminatory, they both seem viable.

No, they can pay the lump sums, but they can't purchase the annuity until 45 days after the participants are notified. if you are allocating excess assets, I suggest you wait until you purchase the annuity before paying lump sums. You won't know what your excess is until the annuity is purchased.

That is what some believe. You should let the sponsor's attorney make the call. I have done a few plan terminations that way, but in general, we typically use the 1-yr break rule, assuming the plan has deemed distribution language.

I assume you are asking who s/b treated at 100% vested on a plan termination? The answer is probably in the plan document, so you will need to read those sections you typically just skim. You will likely get several answers, and therefore, you should consult with an ERISA attorney to provide a recommendation to the sponsor. Definitely, anyone who has not had a one year break in service s/b 100% vested. That means, anyone who worked at least 500 hours in the prior plan year, but check document at the break in service language may be different. Many will argue that you need to vest anyone who hasn't had 5 break years - again, check your document. Some argue that any partially vested deferred vested should be 100% vested, but you should check your document to see if it has "deemed cash out" language. Deemed cash out language would say something like any non-vested participant is deemed to have been paid. If it is a bigger plan, with a lot of terminated participants, you will want to discuss it with the sponsor and the attorney. The PBGC will look at this if they audit, so you will want to document whatever you decide.