Peter Gulia

I have not considered this question, and have not read the relevant law. But: Absent a provision of applicable law or in the plan’s governing document, perhaps a plan’s administrator should apply or interpret a plan’s definition of compensation so that pay for a leave required under the Families First Coronavirus Response Act is compensation to the same extent that pay for a somewhat similar leave not required under that Act is compensation. An administrator might be reluctant to treat a payment of wages as a fringe benefit within the meaning of the plan’s compensation definition if the benefit is not of a kind described in Internal Revenue Code of 1986 § 132 or some analogous fringe benefit.

But a cash-balance defined-benefit plan might provide a single-sum distribution?

It is not yet final because the Senate-passed bill now needs action in the House of Representatives. That H.R. 748 includes: a participant loan up to 100% or $100,000, for 180 days from enactment [§ 2202(b)]; a repayment delay for one year for a loan with a due date from enactment to December 31, 2020 [§ 2202(b)]; a coronavirus-related distribution, with a choice to spread income over three years, and a three-year opportunity for a recontribution or rollover [§ 2202(a)]; no direction for a change in the Treasury department’s hardship rule; a waiver of a 2020 minimum distribution from an individual-account (defined-contribution) retirement plan [§ 2203(a)] an update of IRC § 402(c)(4): “If all or any portion of a distribution during 2020 is treated as an eligible rollover distribution but would not be so treated if the minimum distribution requirements under section 401(a)(9) had applied during 2020, such distribution shall not be treated as an eligible rollover distribution for purposes of section 401(a)(31) or 3405(c) or subsection (f) of this section.” [§ 2203(b)] As with most law changes, a plan may (but need not) provide relaxed provisions. For tax law, the legislation would set delayed remedial-amendment periods [§ 2202(c); § 2203(c)]. ERISA § 518 grants the Secretary of Labor some authority to delay a due date by up to one year. CARES § 3607 would allow this not only for “a terroristic or military action” but also for “a public health emergency[.]” For a minimum required contribution under ERISA § 303(a) and IRC § 430(a) that otherwise would be due in 2020, the due date would be January 1, 2021, and the amount would be increased with interest. [§ 3608(a)] For ERISA § 206(g) and IRC § 436, a plan sponsor may treat the plan’s adjusted funding target attainment percentage for the last plan year ending before January 1, 2020 as the AFTAP for plan years that include calendar 2020. [§ 3608(b)] What’s not in the bill? The bill does not change pension funding requirements (for most employers), Pension Benefit Guaranty Corporation premiums, or anything about multiemployer pension plans. There is no Federal provision about remote notarial acts. (This might matter if a participant’s election against a survivor annuity requires the spouse’s consent. For some States’ efforts, see https://benefitslink.com/boards/index.php?/topic/65731-spousal-consent-in-the-time-of-social-distancing/&tab=comments#comment-301951)

Last year's tax legislation too had some minimum-distribution changes that apply only for an individual-account (defined-contribution) retirement plan. Do the legislative drafters assume a defined-benefit plan lacks non-annuity payments?

Further, there might be opposition from a Member of the House of Representatives.

Whether a plan’s administrator relies on or refuses a qualified election, spouse’s consent, and notarial act is in the administrator’s discretion. About whether someone tries creative means to do a notarial act: National S. 3533 A bill to authorize and establish minimum standards for electronic and remote notarizations that occur in or affect interstate commerce, to require any Federal court located in a State to recognize notarizations performed by a notary public commissioned by another State when the notarization occurs in or affects interstate commerce, and to require any State to recognize notarizations performed by a notary public commissioned by another State when the notarization occurs in or affects interstate commerce or when the notarization was performed under or relates to a public act, record, or judicial proceeding of the State in which the notary public was commissioned. As of 03/25/2020 text has not been received for S. 3533. https://www.congress.gov/bill/116th-congress/senate-bill/3533/text This idea is not in the pending coronavirus bill. States Executive orders: Connecticut https://portal.ct.gov/-/media/Office-of-the-Governor/Executive-Orders/Lamont-Executive-Orders/Executive-Order-No-7K.pdf New York https://www.governor.ny.gov/sites/governor.ny.gov/files/atoms/files/EO%20202.7.pdf No one knows whether anyone would rely on such a notarial act. Proposed legislation: New Jersey https://ils-content.s3.amazonaws.com/COVID-19/NJ+bill+for+remote+notary.pdf

Here's a text of the draft bill. But there is still haggling over some provisions. Coronavirus-Stimulus-Bill.pdf

Let me give an example: My client has a service agreement with a recordkeeper. The agreement obligates the recordkeeper to provide a specified number of workers at the client’s location. That location is not one under any government-ordered shutdown. It’s not strictly impossible for the recordkeeper to perform its service obligation. The recordkeeper requested my client’s assent to provide the workers by technology presence, rather than face-to-face presence. The assent made it unnecessary for either party to consider impracticability or force majeure issues.

You're right; it's no more than an indirect sense. But the list of 6,271 plans and the list of trust or insurance companies that have taken on a QTA administration, including many that are big recordkeepers, affiliates of them, or directed trustees arranged with them, suggests that many are willing for at least some of the abandoned plans.

Yes, it's about the public-health emergency. My observation, so far, is that service providers and service recipients are cooperating nicely, making it unnecessary to evaluate questions of law.

Two hours in, they're still speechifying.

I'll answer my own question: https://www.askebsa.dol.gov/abandonedplansearch/

The Senate now is readying to act on H.R. 748, into which the coronavirus stimulus legislation would go.

Will anyone please share information on which recordkeepers and directed trustees are willing to serve as an abandoned plan’s qualified termination administrator, and which are unwilling?

If you're willing to begin work with a few-days-old placeholder rather than the legislation likelier to emerge, here's a link to the McConnell bill. https://www.congress.gov/bill/116th-congress/senate-bill/3548/text

Is anyone aware of a retirement-services provider using impossibility or a contract’s force majeure clause as a reason not to do something that otherwise would be a service obligation?

And the IRC § 404(a)(6) time for a deductible contribution: A20. Yes, because these employers are Affected Taxpayers under Notice 2020-18 for whom the due date for filing Federal income tax returns and making Federal income tax payments that would be due April 15, 2020, is now July 15, 2020, the end of the grace period for these employers is also July 15, 2020 under this relief. So, for example, if an employer is a corporation with an April 15, 2020 due date for filing the Form 1120, then the grace period under section 404(a)(6) for the employer to make contributions to its workplace-based retirement plan that are treated as made on account of 2019 ends on July 15, 2020.

There also might be a related ambiguity about the meaning of a half-month or two and a half months. If a relevant year ends with November, which day in February would mark the end of two and a half months from the end of November? Does it matter whether that February has 28 or 29 days? For the point inquired about, is there a Treasury rule or subregulatory guidance that pegs the 15th of a month as the convention without regard to the number of days in a particular month?

For one version of the several proposals, see in this attachment page 1166. Pelosi_bill_COVIDSUPP3_xml.pdf

The pending legislation includes a defined term for a coronavirus distribution, and for it includes a recontribution/rollover provision similar to other disasters' provisions in recent years.

For questions about whether an employer gets a 2019 deduction for a contribution made after April 15, 2020: I.R.C. § 404(a)(6) Time When Contributions Deemed Made — For purposes of paragraphs (1), (2), and (3), a taxpayer shall be deemed to have made a payment on the last day of the preceding taxable year if the payment is on account of such taxable year and is made not later than the time prescribed by law for filing the return for such taxable year (including extensions thereof).

Some lobbying groups presented ideas of this kind to Congress. From what I read in the news, one doubts Congress will act in this business week.

Yes, elective deferrals count. But many business owners have not yet made any for 2020. Some do no elective deferral until December 31. Some defer on a quarter-yearly draw, which might be determined or declared to be zero. If an elective deferral was made regarding an advance payment (grounded on a then reasonable estimate of an owner’s earned income for the year), one might consider how such a payment might be adjusted if the owner gets negative income for the year and has compensation of zero.

Some business owners might not fear an obligation for a top-heavy minimum contribution. Along with other reasons, they anticipate every owner (and every other key employee, if any) will have no contribution for 2020. I.R.C. § 416(c)(2)(B)(i): The percentage referred to in subparagraph (A) for any year shall not exceed the percentage at which contributions are made (or required to be made) under the plan for the year for the key employee for whom such percentage is the highest for the year.

If my client asks for my advice, I can explain everything. That might include warning an administrator that its interests, fiduciary and personal, might conflict with the employer’s interests. And it might include inviting my client to evaluate soberly whether it has the resources and the appetite to fight a government agency. Everything is fact-sensitive. Some clients are comfortable with decision-making, including risk decisions. Others ask “what would you decide?” Even with them, I’m mindful that the client enjoys and suffers the consequences.