chc93

Bankruptcy trustee might be the guiding light.

This is nice to know... thanks. I will be doing a 2018 Form 5500 filing in the near future, and will be using the 2020 (or even the 2021 form if really late).

I think you can still use an -11(g) amendment to give contributions with a lower hours threshold, even with the fail-safe language. As has been said many times over the years here and other places, -11(g) does not require any failure before it can be used, even if the section title is "corrective amendments".

As Lou and David say, your interpretation seems reasonable. As far as the plan document, it is interesting that the IRS also never defines "retirement" in the code and regulations too.

I also agree. When we had this situation where 401k deferrals started mid-year, the ERISA attorney who did all plan documents and amendments made clear that SH contributions were based on compensation after 401k deferrals started.

I recall a discussion where these "trailing dividends" are for investments that were already transferred out of the plan and is now "owned" by the rollover. So these trailing dividends really belongs to the rollover and not to the plan. So not plan assets.

We had one client that used his daughter once, who was a real estate agent in the area. We told him that there may be conflict of interest concerns, and that he should really get a 3rd party appraisal/opinion. He subsequently engaged a 3rd party...

Not only that... with 90% deferral, net check would be essentially zero. That's gotta be noticeable.

In our experience, we've seen certified real estate third party appraisals, and also seen real estate agents provide "comparables" market value information provided on their letterhead (for whatever that's worth). But as far as I remember, never used tax assessment.

Maybe a possibility is that there is an option in FDP for the 2-digit year swicth from 1900 to 2000... but I would think this could cause other issues such as current age if a participant was born in, say, 1935 (85 years old), which we are seeing more of these days....

Probably FDP issue, not DOS. Looks like FDP was programmed such that they didn't expect the software to be used past 2019 (seems reasonable to me as pmacduff mentions above). So "19" translates to "2019". And then "20" translates to "1920". If so, you are "out of luck".

Interestingly in our case, I don't think the plan sponsor got penalty letters from the IRS for non-filing... or last we weren't told. Also, we never heard from the IRS or DOL after filing all late 5500's and DFVCP in 2015. Plan terminated at the end of 2016, and the final Form 5500 was filed in 2017. Still no communication from the IRS and DOL...

A few years ago, we filed Form 5500's for 2007 through 2014 in Oct 2015. Process was to file all Form 5500's through EFAST first, then use the DFVCP Penalty Calculator online to file the DFVCP fee. The penalty calculator asked for the date that the late Form 5500's were filed through EFAST.

Luke... thank you very much for your research and detailed response. In the recent case that I had (sole prop, W-2 c-corp compensation, no employees) I calculated the profit sharing contribution separately for each source, then added the contributions for the total. Also, others have indicated that there didn't seem to be specific rules for such situations.

This might help. HKSUN suggested treating each source of income as two different entities, then combine the resulting contributions for each entity. Mike Preston agreed... So if I understand this correctly, $100K for s-corp with corresponding contribution, and $5K loss for sole prop and no contribution.

In my limited experience, I've never seen the plan sponsor as a "service provider" receiving direct payment. Usually, the revenue credit account is used to pay fees "outside" of the plan (legal, CPA, TPA, etc), or if not, allocated to participants accounts as additional gains. Was if over $5,000?

We've had situations where the employee just calls the employer one day and says that he is "quitting"... and never shows up again. Others just don't show up for work... with no contact with the employer. No valid addresses in either case. And, terminated employees that "move on" with no current addresses and become "lost" is a major problem if and when the plan terminates.

I've seen accrual-to-cash or cash-to-accrual from one year to the next. My only thought is that such a change should be done once, and stay consistent for a "few" years... however long "few" is. Said another way, this should not be changed every year.

I agree with Mike. We had a plan where the recordkeeper called it a "Pre-funded Account"... that plan also had a *true* Forfeiture account. Money in the Pre-funded Account was invested in money market or guaranteed interest fund, so the dollars contributed were available at the end of the year for allocation. Interest gains were allocated to all participants. Question we had was if the interest should be allocated only to participants who eventually get a share of the contributions, or all participants in the plan. But as others have said with pre-funding contributions, this practice was ended a couple of years ago... actually recordkeeper eventually didn't like the arrangement.

We had somewhat of an issue with one daily platform provider. After a few years, they (and their auditors, I think) did not like the idea of holding plan assets (over $200K) that were not allocated to participants... even if for a few months (participant was a Mr. Prefunded Account). The client was going to set up an external bank account, but then decided to not pre-fund their plan year contributions, but hold it somewhere else within their corporate finances, and pay a single contribution deposit after the end of the year.

We had this situation a year or two ago. Sponsor closed one site, so partial termination and full vesting resulted... no disagreement. But this IRS "Issue Snapshot" was troubling... https://www.irs.gov/retirement-plans/partial-termination-of-plan *************************** Analysis IRC section 411(d)(3) specifies that a plan will not be qualified unless it provides that, upon its partial termination, the rights of all “affected employees” to benefits accrued to the date of such partial termination, to the extent funded on that date, or the amounts credited to their accounts, are nonforfeitable. The facts and circumstances determine whether or not a partial termination occurred under IRC section 411(d)(3). If a partial termination occurs, all participating employees who had a severance from employment during the applicable period must be fully vested in their account balance or their accrued benefit, to the extent funded. Under Rev. Rul. 2007-43, the IRS established that a 20% or greater turnover rate in the applicable period creates a rebuttable presumption that a partial termination occurred. *************************** and... *************************** Affected Employee IRC section 411(d)(3) and Treas. Reg. section 1.411(d)-2(a) require that upon a plan’s termination or partial termination the benefits accrued to the date of such termination or partial termination, to the extent funded, are fully vested for each affected employee. “Affected employee” is not defined in the Code or Regulations. *************************** Sponsor said participants who terminated earlier in the year, without knowing of the site closing or being affected by the closing, will not be fully vested. We gave him all of this info, but he was adamant... rule is "dumb", and he'll fight it if he has to.

Pet peeve of mine... as Larry says, employee's fault... had many opportunities to check that deductions were taken correctly. No room to complain, and have to accept the correction even if not what is expected.

This is Block 8 on the Form 4419... 8. Check the box(es) next to the form type(s) for which you are requesting an additional TCC Note: The IRS encourages transmitters who file for multiple payers to submit one application and use the assigned TCC for all payers. Forms 1097, 1098, 1099, 3921, 3922, 5498 and W-2G (See Publication 1220) Form 1042-S, Foreign Person’s U.S. Source Income Subject to Withholding (See Publication 1187) Form 8027, Employer’s Annual Information Return of Tip Income and Allocated Tips (See Publication 1239) Form 8955-SSA, Annual Registration Statement Identifying Separated Participants with Deferred Vested Benefits (See Publication 4810) This is from the Form 4419 instructions... Block 8 - Only check the box next to the form types for which you are requesting an additional TCC. A separate TCC will be assigned for each box checked in Block 8. Required. (emphasis is mine) So looks like you get different TCC's for each form. We have separate TCC's.

My thoughts are that you either leave all eligible participants in, or "remove" all eligible participants who did not meet the new eligibility... whether the have a balance or not. But, maybe hopefully those with a balance will eventually meet the new eligibility and therefore can then continue participation at that time... but there may be a gap between the amendment and the new eligibility. (my <2 cents on this).

Prior discussion on changing eligibility from immediate to 1 year.. See RatherBeGolfing replies... It is allowed to "un-participate" a previously eligible participant. From the linked thread... reply by RatherBeGolfing... ************************* There was absolutely a clear answer at Annual but some in the audience did not want to accept the answer. The answer is that if you have immediate eligibility and later change that eligibility to something else, those who have not met the new eligibility are now not eligible to participate. There are no cutback issues here (which is what Brian was saying in his session and Sal confirmed during the general session the next day). But wait there is more... If you want the people who are in the plan to stay in, simply make your amendment prospective and you won't have any issues. As for discrimination issues, you should be fine changing the eligibility within the statutory limits. *************************