PensionPro

TPA firms (and possibly even some law firms) are starting to offer ERISA §3(16) fiduciary services and assume the responsibility of administrator from the plan sponsor. Maybe this type of arrangement will serve your client's purpose.

All mistakes are not mistakes of fact. A mistake of fact is an unconscious ignorance of a fact that is material to the transaction. PA has to follow participant's written election not what may have been on participant's mind.

a business income from an S-corp is not compensation for plan purposes

An SMM is only required I believe if it is modifying info in the SPD. Arguably if info is material it would be on the SPD. However, communicating the change to the participant is important so you do not get questions later on about why there is no true-up this year.

Also pg 12 of pub 4220, "While Your Application is Pending"

You are correct. From the IRS web site: When the IRS approves a timely filed exemption application, exempt status is recognized back to the date the organization was created. Thus, while an application is pending, the organization can treat itself as exempt from federal income tax under section 501©(3). For example, it must file Form 990 (instead of an income tax return) while its application is pending. However, if the org ultimately does not qualify for exemption you run the risk of having an employer eligibility failure.

Are they paying her for attending the meeting? Off the top of my head I can not think of an ERISA violation.

http://benefitslink.com/boards/index.php?/topic/32034-unsigned-plan-document-or-amendments/

How about amending the 1099-R to show that a portion of the distribution was ineligible to be rolled over?

As per ASPPA letter sent to IRS in June 2012 amending a SH plan's allocation formula for non elective contributions is questionable and risky with respect to the plan's safe harbor status. From page 2: "When asked at various forums over the last few years about the ability to make mid-year changes other than those listed in Announcement 2007-59, the IRS has responded by referring to Announcement 2007-59 and the specific amendments allowed as the only changes that can be made to a safe harbor 401(k) plan mid-year." From page 3: "Plan modifications that should be permitted to be made mid-year because they will not affect a plan's safe harbour include ... (3) altering the allocation method for nonelective contributions other than the safe harbour contributions (while protecting benefits already accrued) ..." Theory aside, until IRS issues specific guidance are we not stuck with the risk of IRS enforcement based on its interpretation? As far as OP's question it would be okay to amend the plan's allocation formula AFTER giving a supplemental notice stating the plan is not safe harbor IMO. ASPPA.pdf

I would go with the software and not treat them as active employees in 2012 because they could not have deferred or received a PS.

Did you include them on the 2012 ADP test?

Under California Civil Code Section 1798.85-1798.89 companies may not publicly display or post SSNs or mail anything to customers containing SSNs. Here is the state statute that permits use of the last four digits in certain instances: "Unless otherwise required to do so by state or federal law, no person, entity, or governmental agency shall present for recording or filing with a county recorder a document that is required by any provision of law to be open to the public if that record displays more than the last four digits of a social security number. Unless otherwise authorized by state or federal law, a document containing more than the last four digits of a social security number is not entitled for recording."

For current employees writing a letter may not be sufficient.

Employee was improperly excluded in 2013 but to calculate missed deferral opportunity, 2013 ADP results are not available. Does employer have to wait till after 2013 to determine the ADP and then correct? Thanks. PS: they do not qualify for the special rule for brief exclusion.

Are the plan assets being reported on an accrual or cash basis?

If you have employees excluded from the 403(b) who are not eligible to defer under another plan, yes you have found a problem. The regs say you can exclude employees who are eligible to make a cash or deferred election (as defined at §1.401(k)-1(a)(3)) under a section 401(k) plan of the employer.

Only eligible rollover distributions can be transferred between a 403(b) plan and a qualified plan.

Was that in the context of key employee officer definition or management functions?

EOB states: The law does not provide a definition of management functions. The term should be interpreted under common business practices. Activities that involve daily business operations, hiring or firing personnel, business planning, setting employee compensation, and supervisory roles would be examples of management functions. However, see attached, starting with the last section of page 1 ... Mgt Functions.pdf

You may want to check if there is a PTCE, perhaps PTE 77-3 or 79-13 ...

Yes I agree that ERISA 403(b) plans are not subject to 4975. In the last step the plan has the option to file under VFCP as you noted.

ERISA 502(i) provides for the imposition of a civil penalty. It is not a mandatory excise tax.

A 5330 (or the information that would be on the 5330) is only required to be submitted to DOL if you are seeking exemption from providing the Notice to Interested Parties where excise tax is less than $100. Otherwise it is not required.

I don't see the point of sending a 5330 showing an excise tax due and no check attached.