Santo Gold

Thanks for those replies.

Lets say a plan you used to be the TPA (TPA #1) for goes to another TPA firm (TPA #2) 5 years ago. You the sold your TPA business 2 years ago to a different firm (TPA #3). That plan now gets audited and it turns out something was done incorrectly with the plan document you drafted for them over 5 years ago and IRS fines and penalties are assessed. TPA #2 did not draft the document being questioned. Is TPA #1 still responsible/liable for that old document, or does TPA #3 have that responsibility? I assume there is language somewhere in the sales agreement about past clients, but I was curious whether that normally transfers old client responsibility to TPA #3 or does it stay with TPA #1. I suppose TPA #2 could also be responsible for not catching and advising on fixing the error.

This is a long way off for us, but when the time comes to see a TPA business, how are terminated plans/clients or plans that moved on to another TPA typically handled? For example, we have clients that have been gone for 3, 5 even 10 years. If we were to sell the TPA business, who maintains responsibility for any out-of-the-blue questions or follow ups on those old clients, the new TPA or the one that is selling? I assume that gets worked into the sales agreement, but in general, does the new TPA take that on? Thanks

The save--the-file-then-open-it trick worked!!! I did not know about that. Thanks so much Lois.

Is software needed to file a small plan form 8955-SSA, even if it is a paper form? The IRS website has a pdf file but clicking on it the message comes up stating that my pdf viewer may not be able to display this type of document. It then gives a link for the latest adobe, which I did and downloaded, and still will not display. Any thoughts or solutions are appreciated.

We have had a 403(b) plan that has been inactive for well over 10 years. It is a hospital plan that was previously bought out and taken over by a new medical organization. No new contributions going into the plan past 10 years, just withdrawals. The plan has never had more than 100 participants and currently have around 50 accounts in it. Since the plan data is easy to obtain, the new organization has chosen to file 5500s each year even though I do not believe they have been required to. The deadline for a new 403(b) document is almost here (June 30th). Even though the plan is frozen and allows no new participants, a new document is still required, is that correct? Thank you

Just curious if you were able to use a current document, submit that with any attachments and all of the caveats and explanations about nothing previously having been available. Was that enough to get it through?

Is there really no statute of limitations? Would the IRS or DOL ever randomly go back 7+ years to audit a 5500? I thought there was a 3 or 6 year period that they would not go beyond that for a 5500 or plan audit?

It has employer contributions for all years.

It is an ERISA plan. I am just not sure what records are available going back 30 years. If records are incomplete, would you file a best estimate as to assets and participant counts? Is that acceptable?

We are early in the research process but a 403(b) plan that was created in 1989 apparently has never had a plan document. I would like to eventually get them through VCP. Would this be acceptable since we have nothing to go on? Thanks

Referred to a 403(b) plan that was created in 1989 and has never filed a 5500. Well under 100 participants. I am not sure how far back any records go and what can be obtained. How far back can/should we go to correct via DFVCP? Also, is the DFVCP amount capped at $750 for non-profits no matter how many late filings? Since this is a 403(b), I know that through the 2009 plan year, the information required on the 5500 was pretty limited. I do not believe financial data was required. Would this make 2010 plan year an acceptable starting point? Thank you

Thank you Larry. That helps to clarify this for me.

I wanted to confirm that I researched this correctly. in 401k plans, self-employed individuals can make employee contributions up to the due date of their personal tax return, including extensions, which could mean a 2019 calendar year 401k contribution can be deposited as late as 10/15/20. But if the same employee/employer has a SIMPLE IRA, the employee contribution deadline is 30 days after PYE? From the IRS website is below. So my conclusion is that different timing deadlines apply whether a SIMPLE or not? Also, does the coronavirus relief change anything for SIMPLE IRA employee contributions? Thank you When must I deposit the salary reduction contributions? You must deposit employees’ salary reduction contributions to their SIMPLE IRAs within 30 days after the end of the month in which the amounts would otherwise have been payable to the employees in cash, according to IRS rules (IRC section 408(p)(5)(A)(i)). For self-employed persons with no common-law employees, the latest date for depositing salary reduction contributions for a calendar year is 30 days after the end of the year, or January 30th. The Department of Labor rule for deposit of the salary reduction contributions may be stricter. They do have a 7 business day safe harbor rule.

This would be the Plan sponsor paying the fees, not the plan. Advisor is an RIA so what you stated seems very practical. Thanks to all

We are a non-producing TPA firm strictly fee based with the clients. We have an existing financial advisor who is inquiring whether he could bundle his fees with ours, we get paid annually both our fees and his fee, and then cut him a check for his portion at year end. We would 1099 him for the amount. This is what he is proposing. Does this sound A-OK for both us as the TPA as well as for him?

Unfortunately there is nothing in the plan document or loan procedures that address this specific situation.

Since the plan only allows for payroll deduction repayments, would credit worthiness, or questioning the ability to repay really play a factor? Once the loan is established, the participant cannot stop making repayments, since they are coming out of the participant's payroll automatically. The participant would have to stop drawing paycheck for the repayments to stop.

A 401k plan allows for plan loans for any reason. However, a participant who is requesting a loan recently declared bankruptcy, which the company is aware of because they receive a court order to terminate his wage attachment for child support. Can or should a Plan Administrator deny the request for the loan since they have reason to believe (bankruptcy) that the plan loan would not be paid back? Thanks

Pretty cut and dry. Thanks very much.

We are looking at an employer who terminated a plan earlier this year and recently paid everyone out. He wanted to start a new one but he's got to wait at least 12 months. But he also owns 2 subsidiary companies. If either or both of the subsidiaries were not participating in the original 401k plan, could they start a plan up immediately, even though the owner of the main company and the 2 subsidiaries had sponsored the original plan? Thanks for any replies.

We TPA for a small 401k plan whose parent company is actually from the UK. The plan only covers the US employees. We had three trustees for the plan, 2 of which were not US citizens while 1 was a based in the US and was a US citizens. The US trustee left the company a few days ago. He will be removed as a plan trustee. Is there a problem if there are no US trustees for this plan? Thank you

Do employees with balances under $5,000 have to be given distribution options or can they simply be forced out? One of my plan sponsors wants to go hyper-streamlining in the distribution process and the day that an individual terminates employment, if they have under $5,000, send them a check and inform them they have 60 days to do something with it. Assuming only lump sum distributions are permitted, could they do this? Doesn't the plan sponsor at least have to give them their options and maybe a 30 day window to decide before taking the force out route? Plus, if over $1,000, the only force out option is an IRA. Thanks

I have a similar situation. Our loan policy language in the plan document does not directly state that defaulting on a loan prohibits the individual from taking a second loan. Given that, if the loan is in default (has been for several years), the currently employed participant has been 1099'd on the loan balance, is under age 59-1/2, the plan allows for more than 1 loan at a time, and a second loan would not exceed the $50,000 threshold (factoring the outstanding balance from the 1st loan), could he take a second loan? Thanks

That's an interesting thought. But he did have 100% vesting in his 401k and safe harbor and did not take those out. I've seen language as you described that seemed to apply more to the participant's entire account balance, but not to just a portion of their overall account balance.