chc93

try this recent thread... https://benefitslink.com/boards/index.php?/topic/60263-changing-eligibilty-nondiscriminatory/&tab=comments#comment-267860

Yes, I agree. But for less than $100, it seems like transferring to an outside trust company is "overkill". I guess I'm too simple (comes with age).

We have seen recent plan documents that provide for forfeiture of terminated participant accounts provided that (1) reasonable efforts were made to find the lost participant, (2) the account is less than $1,000, (3) search effort for at least 12 months, and (4) if the participant subsequently makes a claim, the plan administrator will reinstate the account. For a plan termination, I would guess this means that the plan administrator would pay the participant from company funds. I don't know what would be done if there is no company left. But for less than $100 for each of 4 participants, I would think forfeiting back to the company is reasonable in this case of plan termination.

We recently had somewhat of a similar issue. Can someone at the subsidiary "say" that this employee "generally" worked full-time, or near full-time? Or is this employee very part-time, or essentially on-call. Then give the most generous vesting from what can be gleaned. If employment goes back to 2004, someone must have known this person through most, if not, all years.

We had this exact situation many years ago. I forget the details of the plan document, but the client thought she was doing it correctly... as soon as 1000 hours worked, they enter on the next monthly entry date. We amended the plan to conform to her operation.

When it is a "simple" matter to look at the overall rate of return for the plan, we've done this. But with all of the funds usually involved, this is not "simple" enough for us... so we just use the DOL Online Calculator.

What's also interesting to me is the EPCRS (Rev Proc 2016-51) in Section 6.02(5)(a) under "Reasonable Estimates" says... ********** For this purpose, the interest rate used by the Department of Labor’s Voluntary Fiduciary Correction Program Online Calculator (“VFCP Online Calculator”) is deemed to be a reasonable interest rate. The VFCP Online Calculator can be found on the internet at http://www.dol.gov/ebsa/calculator. ********** So the IRS thinks the online calculator is "sufficient"...

FWIW... in the list of EFAST2 Attachment Types (Section 5.10 in the IFILE User's Guide), there is an attachment type "Reasonable Cause for late filing" and an attachment type "Reasonable Cause for late or missing IQPA Report". I've never used either of these, and not sure what should be in the attachment, but find it interesting...

From the OP... only mentions sufficient allocation percentage to pass a4. I assume coverage for the statutory group passed 70% ratio?

Curious... how did the independent auditor file the amended audit report... without the Form 5500?

I got this from reg 1.401(a)(4)-2... (2) Safe harbor for plans with uniform allocation formula—(i) General rule. A defined contribution plan satisfies the safe harbor in this paragraph (b)(2) for a plan year if the plan allocates all amounts taken into account under paragraph (c)(2)(ii) of this section for the plan year under an allocation formula that allocates to each employee the same percentage of plan year compensation, the same dollar amount, or the same dollar amount for each uniform unit of service (not to exceed one week) performed by the employee during the plan year. So your allocation should be OK. Maybe there's testing options/parameters in your software such that the general test passes? Since the allocation is a safe harbor formula, general test is not required. In fact, a uniform percentage of compensation often fails the general test. For safe harbor allocation formulas, we never include general test results (we don't even look at the general test in such cases, actually).

If the 5500-SF is filed as a single participant plan (to mimic a 5500-EZ) the 5500-SF is not on the EFAST public website and it not open to the public.... just like the 5500-EZ.

I agree with you. When in doubt, we have reported D's. But we had at least one big client that knows he reported the D participants, but some of these participants got that SSA letter anyway. He insisted that the SSA reporting wasn't working, and therefore not necessary.

I remembered thinking about this years ago... reporting a participant as a "D" without ever having that participant reported as an "A" would raise a flag and possible penalties for not reporting an "A" when required But I guess with manpower shortage, this kind of audit will probably never be done.

In the limited cases we've seen, the trailing dividends were small, and since the investment from which the trailing dividend was rolled over in-kind to the IRA, we assumed the trailing dividend actually belonged to the IRA, just posted to the wrong investment holder account. Maybe the key here was an in-kind distribution to the IRA...

When we terminated a DB plan a few years ago, the plan's attorney amended the plan to allow auto rollovers for non-responsive terminated participants with PVAB under $1,000 ($300 to $600). Benefits were sent to Penchecks.

Also, I think the top-25 applies to all plans of the employer, and all plans must have the top-25 provision elected consistently.

OP says " Normal benefit is regular single life, with 50% JS for married participants. ". Does this mean that if single, single life annuity is $100... and if married, J&50%S annuity is also $100. Or is the J&50%S annuity the actuarial equivalent of the single life annuity. If the former, should not be an issue. If the latter, then yes, what would the RMD be without knowing marital status and SDOB if applicable. My first thought was to assume married with SDOB equal to PDOB. Isn't this what PBGC assumes for their missing participant program if information is not available?

Regarding no time limit... most plans require a loan to be paid up on termination. So that may be a "time limit"?

Juan... just curious. What "two sets of entries" are you referring to...

Since the list of assets held for investment has always been a supplemental schedule in the audit report (from various auditors), we've always simply attach that supplemental schedule from the audit report as a separate attachment to the Sch H. Never had a problem over the years.

I do agree... and we also try to file all code D's...

However... we have had situations where we *knew* that a code D was filed, but that the participant got a SSA letter anyway. Makes folks wonder if the code D "works"...

A few years ago, I did this. Was filing a Form 5500-SF for sole prop plus 1 employee. Employee terminated, so in the following year (and future years), the Form 5500-SF was checked as a one-participant plan. Haven't had any questions. Option was to switch to a 5500-EZ, but thought that continuing with electronic filing using 5500-SF as one-participant plan would minimize/eliminate any questions. And as a confirmation with respect to public disclosure, I went to look on DOL/EFAST for the filing, and the one-participant 5500-SF did not show up... while prior years 5500-SF's continued to show up. All future one-participant 5500-SF's also do not show up.

CONGRATULATIONS, MIke. Well deserved.