Trekker

Ah, the light bulb came on, thanks to you, Belgarath. We were trying to create an issue that does not exist. Happy Holidays!

A corporation failed to apply for extension for the 2015 year but made the $100,000 contribution anyway in August 2016 (thinking the administrator had filed for extension). So none of the $100K is deductible for 2015 year. When computing Sec. 4972 excise tax - is the tax on the entire $100K or just what would have exceeded the amount allowed under Sec. 404 if the contribution had been made timely? In this case, the $100K was under the 404 dollar limit. I think I know the answer but hope someone will change my mind. Just concerned with excise tax in this post. We are carrying the $100K to 2016. Thanks.

Thanks one and all for your input. Very helpful!

May a 401(k)/PSP force participants to self-direct the investment of their account? The plan currently has a menu/platform but the sponsor wants to get rid of that and have each participant get their own broker and direct their own investments. I'm concerned about participants who either are not that savvy or do not want to self-direct. If it is permissible, is it correct to say that a blackout notice be required when eliminating the menu? Thanks.

We decided to list the two interim amendments and would contend that there were some optional provisions. We would also argue that the restatement itself is an amendment with discretionary provisions. I doubt the IRS will make an issue of this, but the form's instructions do not make sense.

Agree. I am not an attorney, but I believe you will find your answer in IRS Notice 2007-69: "Section 1.411(d)-4, Q&A-12, of the 2007 regulations provides an exception to the anti-cutback rules of Section 411(d)(6) for conforming amendments....This relief from the anti-cutback rules is limited to the elimination - as a result of an amendment that raises the plan's NRA from one that is inappropriately low to one that satisfies the requirements of Sec 1.401(a)-1(b)(2) - of a participant's right to an in-service distribution at the earlier age." Hope this helps.

We are submitting a Form 5307 for a plan that has slight variations from our Volume Submitter Specimen Plan. Since the last Determination Letter (2009), there have been two amendments to the Plan (Good Faith PPA and Good Faith Final 415). We would consider these "interim" and not "discretionary." Line 3f of the form asks if there have been any discretionary amendments not covered by the latest DL. The answer is NO since the two amendments are interim. The instructions say that if the answer is NO, then STOP - Form 5307 may not be used and a 5300 should be used. Does this make sense to anyone? We have submitted 5307 applications many times, but there has always been at least one discretionary amendment that we could report. Should we consider the restated Plan itself a discretionary amendment, or should we consider the choices in the interim amendments to be discretionary (e.g., the choice to use the first few weeks rule in the 415 interim amendment). Sorry this is so long. Thanks for any suggestions.

Thank you, Lou, for the very helpful information.

We have a Cash Balance Plan that has a hypothetical allocation group for shareholders and another group for non-shareholders. A non-shareholder became a shareholder in October. So he is described in one group for 9 months of the year and another group for 3 months. The Plan does not specify at what point in the year the groups are determined. Has anyone had this come up? How is it handled? Thanks for any information.

Correction - I just spoke to the person in our office who had the unofficial conversation with the DOL. The DOL did not say terminate and start a new plan. They stopped at terminate. Period. We will consider QDROphile's and MoJo's responses, which seem to be spot on. Thanks everyone.

We did look at VCP but did not see this situation. Do you happen to know the section in RP 2013-12 that addresses this or a comparable situation? Thank you.

A 401(k) plan has audit issues going back several years. DOL suggested terminating current plan and starting clean with a new 401(k). We feel the successor plan rules would require deferrals to be transferred/merged into new 401(k) and not distributed. Would the problems associated with the old plan also transfer/merge to the new plan? These are not problems with the deferrals themselves but rather other plan issues. Thanks.

Participants have been making Roth deferrals for several years, but document provider was never advised to add the provision. Is there any way to correct? Thank you for any thoughts.

A non-safe harbor 401(k) plan has a September 30 year end. Employees who should have been given the opportunity to defer on October 1, 2014, were not. Employer wants to correct now and be done with it. EPCRS says the missed deferral is determined by multiplying the ADP for year of exclusion by the employee's compensation. The ADP for 9/30/15 will not be known for some time. Any suggestions on how to correct now and not wait until end of year? Thank you.

Carol Calhoun just issued her annual updates and wonderful chart. However, I have not seen the numbers anywhere else.