chc93

Wow... I just noticed that I had a type too... 238 instead of 328. 🤪 Otherwise, my only comment is to call the IRS. From the IRS website... call 877-829-5500. Is this the number on the notice?

For me, the issue has always been, and will always be, that the "title" of 1.401(a)(4)-11(g) is "Corrective Amendments". This implies the amendment is correcting a failure... but this was not the intent of this section (never the intent? - I rely on Mike for this).

Looks like the Notice 328 is for late Federal tax deposit penalties. Is that what's happening?

I would report the fidelity bond on the 5500 for the Plan Year in which the bond was purchased and made effective.

This is how we've always done it....

Interesting... I don't know what kind of communication to participants were provided by the company. In our case, Company 401k Plan was renamed to Company 401k Plan I (001) and the new plan was named Company 401k Plan II (002). I don't recall any feedback from the company that they had questions from participants.

We have a current plan that is contemplating splitting a plan into two smaller plans by last name. Nice to know that Larry Starr recently suggested as such.

I think the business criteria had to do with different divisions/departments within the company, but I wasn't involved with the details of what/how the company selected the different participants to move.

We actually had a situation years ago with a company that had 3 mirror plans for that reason. When the “main” plan grew too much, a fourth mirror plan was created, and some participants were moved to the new plan… note that the company did have a real business criteria for which participants were moved.

I haven't seen such emails... but maybe a hint is that it was an EZ electronic filing? I hope so... First year jitters?

You mention "File a correction with the IRS". Do you mean that nothing was filed for the 3 years the plan was in existence? And no actuarial reports were provided for the 3 years?

And hopefully, all excess will be allocated before the plan is terminated, and therefore no reversion, and consequently no excise tax. Is this correct?

Were 5500's and SB's filed? Were benefit restrictions notices distributed to participants? May have a lot of issues...

For this reason, sometimes I think it's better to just keep filing the 5500-SF... even if it's on the DOL public website. Clients don't generally like letters from the IRS, and neither do I. And while easily explainable, still gotta do that... What I don't understand is right under the "year" in the upper right corner of the EZ, are the words "This Form is Open to Public Inspection". As far as I thought, anyone could get a copy of an EZ from the DOL Public Disclosure Room. Of course, not as easy to get as online, but still available.

Many thanks, CuseFan. Where it says "consistent manner from year to year", do you think that means that a plan should stick to one or the other for all years? Or that in any given year, it only has to be consistent for all participants in that year. Also, can you tell me what C&NDT stands for?

I don't recall much discussion on this. We have always used age nearest for 401(a)(4) testing. Any comments or thoughts on using either attained age or age nearest in 401(a)(4) testing? And for DB/DC combo testing, does different definitions of "age" matter (for example, DB is age nearest month, DC is age nearest or attained age), since testing is usually not a plan document provision. Thanks...

Try looking at DOL FAB 2006-01. Pages 8 and 9... DOL says "it might be appropriate for a plan fiduciary to not accept the settlement distribution". We had this situation a few years ago. They sent the checks back... interestingly 4 checks for about $1,400. Never heard anything after that. fab2006-1.pdf

We got the same request from a large platform recordkeeper, for which the platform company also serves as the plan's trustee. We told them essentially what Belgarath is saying, and asked them what they were looking for. They sent back a list of about 6 specific items that they would be looking for when reviewing the plan documents. I'm not sure how we will handle this yet...

One plan that we have has payroll twice per month, but only deducts 401k deferrals on the second payroll of the month, so monthly 401k deposits. Small plan... about 5 participants with 401k deferrals.... all doctors. Haven't had a problem with deposits. Don't know why they do it this way.

I skimmed through a few attorney-drafted plan documents we work with, and all of them require attainment of normal retirement age, death, or disability while still an Employee for 100% vesting.

Thanks for your comments. We have essentially done what you suggest. Sometimes "reading between the lines" can give differing ideas. We then just march along with our best guess, discuss with the plan administrator, and make sure they understand the issues and they agree. Thanks again to you and Lou for your comments.

Thanks for your comments. Unfortunately, we have a bunch of plan documents that are not clear at all as to what happens in these kinds of strange situations.

I hope I'm not too confused. If he works 1000 hours but is not employed on the last day of the plan year, what is the top heavy, and where is it paid. Since not employed on the last day, no 3% DC minimum. But has to get the DB minimum. Can he still get 5% in the DC plan? Or the only option is to now get the DB 2% accrual minimum.

You may be able to continue to use the prior recordkeeper plan document, if they allow it. But even if they do allow it, they will probably not maintain it for your plan... amendments (required or otherwise), restatements, etc. You will probably have to go looking for a new plan document, especially since restatements are now in "cycle".

I have a couple of these... but fortunately the rate groups passed on 70% so didn't need the ABPT. (hmm... so many options...)