BG5150

What is the cite for that?

There is no arguing. Those eligible but not contributing are still "covered" by the plan.

It goes in the "special extension (enter description)" line just underneath the Form 5558 line.

We are taking RBGs advice for the two plans we have that are taking advantage of this.

But I wouldn't make a habit out of it.

SOME. But there is plenty that still applies.

First, the plan document must allow for involuntary rollovers; not all of them do. One place I worked, put the cap at $1,000 so they did not have to worry about forced rollovers. Second, will someone please show me the exception to providing the 402(f) notice if the distribution will be less than $1,000 or $200? It doesn't matter whether, or how much, taxes will be taken. If the distribution is eligible for rollover at all, the notice MUST be given, in my opinion. The special tax notice explains a lot of things other than the 20% withholding. It mentions withdraws under age 50 1/2. They types of accounts that may accept a rollover. It explains direct and indirect rollovers. It explains treatment of loans, Roth, company stock. I see nothing in 402(f) that mentions any thresholds. (OK, I probably wouldn't send one for a distribution under $10, as no 1099 is generated for that.)

They do: https://www.pbgc.gov/prac/missing-participants-program

I think the PBGC will take the funds...

To be clear, you can still mail the return. From the instrux: The 2020 Form 5500-EZ can also be electronically filed using the EFAST2 filing system or filed on paper with the IRS.

In the Who Must File section: Sponsors and administrators of government, church, and other plans that are not subject to the vesting standards of section 203 of ERISA (including plans that cover only owners and their spouses or cover only partners and their spouses) may elect to file Form 8955-SSA voluntarily. See the instructions for Part I, line A.

And what if you 'amend' w/in 45 days and don't attach the audit again? Do you get another 45 days? Are they smart enough to figure it out?

When you do these, do you attach a page that says 'audit coming' or just leave the required attachments left out?

There was no late deposit, because there was nothing withheld.

See EPCRS: (5) Failure to implement an employee election. (a) Missed opportunity for elective deferrals. For eligible employees who filed elections to make elective deferrals Page 88 of 140 under the Plan which the Plan Sponsor failed to implement on a timely basis, the Plan Sponsor must make a QNEC to the plan on behalf of the employee to replace the “missed deferral opportunity.” The missed deferral opportunity is equal to 50 percent of the employee’s “missed deferral.” The missed deferral is determined by multiplying the employee’s elected deferral percentage by the employee’s compensation. If the employee elected a dollar amount for an elective deferral, the missed deferral would be the specified dollar amount. The employee’s missed deferral amount is reduced further to the extent necessary to ensure that the missed deferral does not exceed applicable plan limits, including the annual deferral limit under § 402(g) for the calendar year in which the failure occurred. The QNEC must be adjusted for Earnings to the date the corrective QNEC is made on behalf of the affected employee.

50% QNEC for missed amount. Earnings. Plus full match on missed amount, if any.

I agree, RBG. I don't think I've ever had a 'repeat customer' when it came to a late audit. Just one-timers. Mostly they are either first year audits where the engagement only entered into in like September, or off-calendar plans where the audits were supposed to be done during income tax season.

It says right in the reg: An annual report which is rejected under section 104(a)(4) for a failure to provide material information [the audit] shall be treated as a failure to file an annual report when a revised report satisfactory to the Department is not filed within 45 days of the date of the Department's notice of rejection.

But why not file the EZ electronically, too, this year instead of mailing it?

We may do one, maybe two "the audit is pending" filings a year. And over the past 5 years, maybe two have gone even into November.

And remember, you get 45 days after the letter from the IRS or DOL (I forget which) is issued. So in practice, it's more than 45 days after 10/15...

Yes.

Why not continue to file? To me, it's easier to prepare an EZ than to sit around and await the inevitable letter from the IRS looking for the filing, then taking the time to respond.

I find it odd that there wasn't an IRS letter somewhere. Maybe they didn't pick it up b/c the first and only filing was under DFVCP?

Keep in mind what Bill said: If the plan was filing as a small plan (either on an SF or Schedule I), they can continue to do so until the participant count is MORE THAN 120 on the first day of the Plan Year. Still, I would send letters to those affected gently reminding them they can move their money. Include either the paper form and the Special Tax Notice, or explain in the letter who to contact the provider to begin the withdrawal (a lot of platforms are going electronic-only, or at least electronic-preferred).