Bird

Original fact pattern above implies it is a C corp, but not clear. mmm

Sounds to me like you can either take the position that: too much was put in based on what actually happened with payroll, and you can take it out (probably by shifting it over to profit sharing). But then you have a problem of not following deferral elections, or they didn't follow the deferral elections and it was fixed by...well, by what happened, effectively giving everyone 100% of what they had elected. It's a more generous fix than EPCRS would call for, but I'm not sure anyone would object (certainly not the participants) by calling it fixed and moving on. I'm inclined to go with the latter...unless they want to take the time, trouble and expense of fixing it precisely as would be required by EPCRS, AND then dealing with the "extra" money that wasn't really needed for the precise fix. All of that might add up to...oh, $2000.

I see the 5/13 FAQs referenced in this thread but haven't seen anyone saying that that guidance clarifies the amount of employer contributions that are allowable. We have an accountant citing the following: "Any retirement plan contributions paid during the 8-week covered period...count toward forgiveness, without regard to the period to which they relate or when they were earned." It's from an unknown source and we have asked for that source. But they are saying the FAQs essentially state that, and I don't think they do. Any other thoughts?

PLR 8721083. No I didn't know off the top of my head but found it...referenced in ASPPA/IRS Q&As from 1999, with guess-who as a presenter.

I don't think 408b2 is an annual disclosure.

I learned, or maybe re-learned something today, thanks. I guess the issue is insurance coverage after retirement; our FTW language (my emphasis) is: Conversion of Policies. If an insured Participant does not die prior to retirement, the Plan Administrator may direct the Trustee to: (1) convert the entire value of any such life insurance contract at or before retirement into cash to provide the retirement benefits set forth in Article 7 so that no portion of such value may be used to continue life insurance protection beyond retirement; or (2) distribute any such contract to the Participant.

Bingo, I am impressed!

I agree it's extreme and don't see any reason to consider that action. Absolutely not. I think it exists simply for those loans that aren't being paid. It doesn't exist to encourage or offer payment suspensions

(Apparently) it was the reference to Notice 2018-58. (I'm not sayin' I knew it, but I found that explanation.)

Agree it should be code 4. Hard to believe this isn't a problem with the account setup and registration - does it include "BENE" or "BENE PAYOUT" or something similar? Is the DOB correct in the system (not that it should matter)?

I gave you a "like" - since that's what I've been saying from the beginning...

No worries. You quickly learn that Larry is very knowledgeable but also crotchety at times. So, we can do math here, and we know that you are earning well above $120,000, which is the threshold for being a Highly Compensated Employee. HCEs can be discriminated against, to the point of excluding them from a plan (or just excluding them from SH, although there may be reasons that doesn't work). I think I'd turn this around and ask you - would you rather 1) just get your calculated salary based on whatever formula, and not be in the plan at all, or 2) have your salary reduced as it is now and have that money go into the plan? The way they approached this is a little "off" but I think, bottom line, it is probably ok, especially since you apparently agreed to it. I'm not in the habit of telling lawyers how to approach legal issues but it doesn't seem like it's worth it.

Best wishes to you!

Not many, if any, of ours. I was taught that you make 'em wait because you don't want a participant taking the money out and opening a competing business. I always thought that was a bit paranoid but we have a few hugely generous plans where that might in fact be a problem, so yeah. In general, I prefer to "let the dust settle" on that type of plan and would be reluctant to change to immediate distributions. For one thing, if you are on your game, knowing of a pending distribution after the end of the year lets you advise the trustee to raise cash so you're not chasing your tail when stuff happens like it did this year. Is there some other provision you could add, like early retirement with age and service, that might not be quite so loose?

I don't disagree with what you are saying, but I think it is a big "if" they are doing it as described. I think it boils down to the employment agreement and how it defines compensation. If it is unclear, the fact that the poster agreed to it might indicate that it is ok but that's above my pay grade. Also interesting that $500 X 26 = $13,000. More than 3% of maximum comp. Curious Employee, what are your actual total employer contributions? The fact pattern, plus the phrase "small law firm" has my radar up a bit that there might be other problems lurking.

ok I guess that is the bone of contention. I say it is the same.

Well we agree on that. I don't understand the "otherwise" part. I'm not sure what to call where it was held but the original posting was about a $100K contribution that was put in a plan but not immediately put in participant self-directed accounts, and earned $5000. I objected to the position that $105K was allocated for 415 purposes. Then things went off the rails. I get that there is an argument that you can't do it, but if you do it, it is effectively just a pooled account.

I agree with that. I don't think that means you have to ask if you're not sure though. I have to ask, why are businesses that are not affected adopting Covid provisions? Except for loan suspensions, which are fairly harmless, we are generally discouraging CRDs and CRLs.

#1 definitely a contribution. #2 I would call it a contribution...but moving it to the forfeiture account does not make it a forfeiture, eligible to pay expenses. The right thing to do is allocate it as an additional contribution, to all participants, according to the terms of the plan, preferably as additional match. If the match is fixed then it would be profit sharing. If the plan doesn't allow PS...mmm. Is it tempting to use it to pay fees and can you get away with it? Definitely/probably.

There was a fair amount of discussion about pre-funding to use up PPP money and one solution was to open a separate plan checking account to hold it. Are those of you saying you can't have a plan holding account saying you can't open a separate checking account? Also waiting for an explanation of how you contribute $100K and presumably deduct $100K but allocate, for 415, $105K.

no They did. I will freely admit the error of my ways when that guidance confirms that repayments must begin Jan 1 2021. Until then, I'm thinking that the provisions of KETRA and CARES are not substantially similar with respect to the suspension dates. "The Treasury Department and the IRS anticipate that the guidance on the CARES Act will apply the principles of Notice 2005-92 to the extent the provisions of section 2202 of the CARES Act are substantially similar to the provisions of KETRA that are addressed in that notice."

I'd like to agree to disagree but I can't fathom what you are saying. If a pooled account has $1 deposited in January, you can tell me the allocation the minute it goes in?

And just for the record, if anyone hasn't been following, those of us who think that all repayments are pushed back think so because, well, the law seems to say that. "Any subsequent repayments...shall be appropriately adjusted." I'm not looking for a discussion but anyone who walked in from the wilderness ought to understand that we don't have guidance yet.

Actually you can't. See what Larry said, below; my emphasis. Definitely determinable is a red herring. What about the deduction/allocation issue I raised?

But that's exactly how a pooled account works. Are you saying the employer would deduct $100K and allocate $105K as a contribution? Isn't that problematic? I'm having a really hard time wrapping my head around this. Take the inverse where they lost money - deduct $100K and allocate $95K?