John Feldt ERPA CPC QPA

My understanding is that amendment, as you described, would end the transition period. If your client is a serial acquirer, this is certainly one on the problems they face if they are relying on using the transition period.

Sure, you can amend to change the trustees and to change the plan name, things of that nature.

My understanding is that only if it’s under $200 that you can just give them the check and the 402(f) notice with no advance period or election.

Operational failure. After reviewing the document and the amounts involved, if it’s really 15 years, negotiating a solution under VCP would probably be the recommendation.

That’s right, cash for minimum funding. Above that you may have other options, but you really never should do it in a small plan. https://www.chicagotribune.com/news/ct-xpm-1994-05-11-9405120061-story,amp.html

If they ask the Treasury Secretary, they may be able to get it allowed, however that is very expensive to try and very unlikely to get approved. Was GM able to do something like that?

Is the plan document a “standardized” prototype plan document?

You could have imputed disparity using 100% of the taxable wage base, but my understanding is the 100% TWB is the only level available for imputing.

See IRS Notice 2016-16

But you may be able to use the OEE rule to avoid gateway for those under 21/1.

No. And, You should be able to use a formula that is not based on current compensation, if your document will allow.

And if you filed without the report and still don't have it within the 45 days after the letter, the plan sponsor should be prepared to pay the $50,000 penalty or pay the cost to get an attorney involved, either of these are more costly than using the DFVCP option. If you don't file at all, the DOL generally allows the IRS to contact you first so that you still have time to use DFVCP. I agree with MoJo's comment above that filing anyway, without the audit completed, can be a dangerous practice.

Yes, that can be done if the 70% ratio percent test is used to pass coverage.

We posed a number of questions to our major investment platforms and have a handful of responses back. You are correct that the IP's capability (or lack thereof) will greatly affect a TPA. If, as the document sponsor/practitioner, you intend to adopt an interim amendment in late 2019 or whenever it's finally required, with a retroactive effect to 1-1-2019, you will likely have a bunch of employers that will need to adopt their own provisions to override your interim amendment defaults. Are you setting up tracking mechanisms now to internally monitor exactly which employers will not use your defaults and exactly which provisions they will need to manually adopt? Do you even know what you intend to do administratively for your own defaults? if not, you just might want to get started on that.

Corporation

Husband/wife own 96% of the company and are eligible for the plan. No other employees. Their adult kids own the other 4%, but the kids are not employees, not eligible for the plan. Eligible for EZ, or must they file SF?

IRA? It’s my understanding that housing allowance treatment does not apply to an individual IRA, so it seems more likely the question is regarding a 403(b) or qualified plan.

DC plan has a last day requirement for nonelective allocations. DC plan gives a SH match, not a 3% SH nonelective. The DB and DC Plans are top-heavy. The plans are written to say that employees in both plans receive 5% top-heavy minimum in the DC plan. Plans are combined for coverage and 401(a)(4) testing. Assume coverage and 401a26 are not problems, even is a handful of employees terminate. No one has under one year, so OEE is not in play here. 1. Suppose one non-key HCE is excluded by name or job class from the cash balance plan, eligible for the 401(k)/PS plan, but not deferring. That HCE terminates after working 1,000 hours. As an HCE, the gateway minimum does not apply. But, as a non-key employee, because they are not employed on the last day, no top-heavy allocation is required even though the plans are aggregated? 2. Now suppose a NHCE (also non-key) is excluded by name or job class from the cash balance plan, eligible for the 401(k)/PS plan, but not deferring. This NHCE also terminates after working 1,000 hours. As a non-key employee, because they are not employed on the last day, no top-heavy allocation is required? If that is true, then as an NHCE, they must receive the minimum gateway, but since the are not receiving any nonelective allocation, the gateway minimum is not triggered, so no allocation? Please confirm or please set me straight on this. Thanks!

The Notice of Intent to Terminate is a requirement strictly applicable to plans covered by the PBGC. Yes, you can submit to the IRS prior to the date of plan termination. Don’t forget to include Form 6088.

If a plan sponsor with a calendar year DB plan is located in a covered disaster area for Hurricane Florence, their 5500 filing deadline is January 31, 2019. Is the minimum funding deadline also extended past September 15, 2018?

If they cannot produce the information for 2005-2007, I would just file all the returns through the late filing programs for all the years you have information available. If that means you only go back to 2008, then that’s all you can do. Will the IRS really look at the late filed 2008 5500-EZ and wonder where 2007 is, or will the stack of late-filed returns simply go into some filing system never to come up again?

My understanding is that an open MEP is actually a string of single employer plans. In 2012 Adam Pozek posed several optional names, such as “faux MEP”, “Not a MEP” and so forth. If the employers do not share enough common economic interests, other than combining their plans, then it is not a MEP. Read through the DOL’s response to Robert J. Toth, Jr. in 2012 regarding the TAG Resources 401(k) Advantage “Plan” under Advisoty Opinion 2012-04A. https://www.dol.gov/agencies/ebsa/employers-and-advisers/guidance/advisory-opinions/2012-04a I don’t see where that same exception for a MEWA would apply to a retirement plan, unless perhaps if the “MEP” is a fully insured plan?

Have you considered the retirement-exit strategy? Would that cause PTs? Would the tax situation be worse or better if it had been invested without using any plan funds? Capital gains vs. regular income tax?

For the cost of just a few pennies per day for each $1,000 that is late, use the payroll date. If you're investigated by the DOL, they now can't question the choice regarding the loss date. Using the pay date eliminates that scrutiny.

So if they defer (or don’t defer), and thus get the match as pw (or they get no match), that deferral election can also affects their wages that are required to be paid, not just their match. So the match and the wages can both be contingent upon the election to defer. For example, a pw contract requires $42 per hour. The plan does a pw match equal to a dollar for dollar match of 5% of pay. Gilligan’s pay is normally $40 per hour. He chooses to defer nothing. That election gets him $2 more per hour in wages. Next time, Gilligan elects to defer $2, and that election gets him $2 of match but no extra wages. Finally, on the next job Gilligan defers $1 per hour. This deferral election turns into both $1 of match and $1 of extra pay. IRC 401(k)(4)(A): Benefits (other than matching contributions) must not be contingent on election to defer. The amount of extra wages required to satisfy the contract, are contingent upon deferrals. Does that violate 401(k)(4)? It’s not a problem with the pw contract, certainly any type of employer contribution can be used to satisfy that. To me it’s a tax qualification question. IMO, the most solid ground here would be to have a document that has IRS approval for using prevailing wage as a match. Maybe that’s too cautious?