BG5150

Only if 100% of the assets are in qualifying vehicles. Otherwise a 5500 with Schedule I will be needed. That will also drive the bond coverage.

It CAN stay in the account, but doesn't HAVE to. I'd just correct it.

If the husband and/or wife own the business, the daughter is also considered an owner and thus an HCE, too. If there no NHCE employees, then testing is not needed. The only thing they need to consider are the 402(g), 415 and deduction rules (if they plan on giving a generous match or profit sharing. Amend the plan to allow all Employees hired on X date are automatically in the plan. Any future employees still have to satisfy the requirements. Do they have any other employees? Plan to? Keep in mind, the compensation they pay the daughter must be reasonable for the work she performs.

If someone is a participant by the sole reason of the long time/part-time rules, then they are excluded from testing. (I don't know if you CAN include them if you want...) But this can get onerous for a big company with lots of PT workers. Think a restaurant group.

From 4975(f)(5) The term “correct” means, with respect to a transaction— (I) to undo the transaction to the extent possible and in any case to make good to the plan or affected account any losses resulting from the transaction, and (II) to restore to the plan or affected account any profits made through the use of assets of the plan. So: in the fist case, there are no losses to the plan or accounts if the assets would have lost value had they been deposited timely. In the second case, you would need to look at the employer's bank account to see what the "profit" was.

I thought the correction was to add "lost earnings" to the late deposit. Not earnings gained by the employer's bank account. What is the exact reg that details the correction of late deposits? I only found 2510.3-102 which is the definition of participant contributions as plan assets and the timing of them. Where does it say lost earnings must be applied?

That's sometimes good. I rarely put fail safe language in my docs.

Keep in mind the long-term part time employee rules that will take effect next year.

If the "amount involved" is zero, I don't file a 5330. The participants didn't lose out on any investment experience. If anything, they got a (small) windfall in the case the principal is greater than what would have been has the deposits been made timely.

I wouldn't either. If there is a loss, I just allocate the principal with zero earnings.

I've know people to do this, but why? What if the accounts lost money? Would you still give the participants a 3.5% per annum interest? Now the correction is merely punitive instead of compensatory.

Plan fails coverage and does not have fail safe language. What happens if the coverage failure is not discovered until November the next year. It's now too late to do an -11(g) amendment. How does it get corrected?

Does the plan have fail safe language?

What kind of retroactive amendment are you doing? If the plan has fail safe language for coverage, you need to follow the rules in the plan document for corrections.

Participation is not a protected benefit. Amend away...

In the case of models and such, doesn't the company usually pay the modelling agency or the company making the commercial/ad instead of compensating the model directly?

I doubt he's going to fire himself....

Filing and signing are two different things. And may be done by two separate entities. Are you signing the 5500, too?

Again. It all depends on what the 3(16) Agreement says. Often, the 3(16) agreement does call for the 3(16) administrator to sign and file the 5500. Who did the testing in the past? Same responsibility I would guess. (Other responsibilities MAY include implementing deferral changes, furnishing notices, approving distributions incl. hardships)

They should consult the service agreement they have with the service. And/or they should consult with their attorney how to accomplish the severance of service.

Plan offers loans that are paid back via payroll deduction. Is there any reason how/why loan repayments can stop? Can the participant ask the plan administrator to stop loan repayments citing they can't afford it?

And, having a 3(16) agreement in place does not absolve the plan sponsor of his or her fiduciary responsibilities to the plan. The buck starts and stops with them even if the 3(16) administrator is tasked with some responsibility to run the plan.

One-PERSON option. Just sayin'

We were just talking about this int he office. I just file full-year forms. I've had two plans (over 25 years in the business) that were audited post-termination and in neither case was it mentioned. Side note: I do try to get them done within the 7 months after the last assets leave. But sometimes you just don't know until way late. I had a plan on a record-keeper who was also the document provider. So, the sponsor does amendments with them. A few years ago, they did an amendment to terminate the plan, and all the assets were out by February. We did not get the census request back until April of the next year. That is the time we go out and download the reports. So, we did not know the plan terminated and was liquidated until 14 months after the fact. We just filed a full year 5500-sf and moved on.

What is a 3(15) service? Was that a typo for 3(16) services? if so, what responsibilities were given tot he 3(16) administrator? You need to look at the agreement.