My 2 cents

As the instructions previously read, wouldn't "answer yes if the plan did not have enough money to pay all benefits when due" have been a reasonable interpretation in deciding whether to answer yes or no?

This is what I see in Section 4044 concerning mandatory employee contributions and excess assets (paragraph (1) being the paragraph about when excess assets may be distributed to the employer): "Before any distribution from a plan pursuant to paragraph (1), if any assets of the plan attributable to employee contributions remain after satisfaction of all liabilities described in subsection (a) of this section, such remaining assets shall be equitably distributed to the participants who made such contributions or their beneficiaries (including alternate payees, within the meaning of section 1056(d)(3)(K) of this title)." As I see it, first you determine if any assets attributable to employee contributions remain after satisfaction of liabilities, then you distribute them in an equitable fashion to those who made such contributions, THEN you can look at distributing what remains to the employer. So before you deal with the excess attributable to employer contributions, you deal with the excess attributable to employee contributions. Having an actual employer reversion is not the first step in allocating assets to the contributing employees.

I don't see how a transfer to a qualified replacement plan could be seen as an employer reversion. They get nothing back, right? Equity pretty much demands that those who had made employee contributions, which helped foster the surplus, should get a share of the surplus over and above reallocations. ERISA 4044(d) is law. Why would there have to be other provisions in the law addressing this? If 4044 says a proportionate share goes to those with accumulated employee contributions, do it. The remainder can be transferred to a qualified replacement plan.

Assuming that the original post meant that the father, who had been a 100% owner, had gifted or sold the ownership to the son ("inheritance" requiring, or at least very strongly implying, that someone had died), do the constructive ownership rules assign ownership to parents of the owner? Just wondering if the father waiving benefits owed by the plan sponsored by the son, relieving the company from having to make the plan sufficient, could be considered a taxable event with respect to the son, the father, or the company?

Based on the instructions as revised, wouldn't a large majority of plan filings need an answer of "yes"? How would that be quantified? If a plan has 25 terminated participants over normal retirement age due payments who have not start receiving them because their whereabouts are not known, with 8 of them over age 70 1/2, how much should be shown? Given the lack of specificity in the prior instructions, if the question had always been answered "no", should there be amounts from previous years?

...2,476,514, 2,476,515, 2,476,516...

If it looks like a duck and quacks like a duck...

To the extent that the situation is not actually hypothetical, my vote is that everyone who was ever adversely affected (at least since the Norris decision) must be made whole, even if the person died 30 years ago. This was really common knowledge then and every day since. No excuses, no time limits, no whining about the cost of fixing it. Make everyone whole. This is over and above (although probably a necessary part of) any action needed to deal with plan qualification issues.

I read on the internet that the Antichrist was supposed to be revealed on that day. Don't believe me? Try googling the date. One of the clues was that that day was the 666th day after the end of the Mayan calendar. Is that even true? Did I miss it? How would such a thing even be revealed?

My recollection is that to perform a general non-discrimination test, you have to set up a rate group for each HCE in the test (normal and most valuable percentages). The average benefit test is performed on a controlled group basis unless you qualify for carving some portions out (i.e., separate lines of business, union plans, etc.). You pass the average benefit test or you don't. If you don't, all rate groups must pass based on the ratio test. If you do, you get to assess the rate groups based on the safe/unsafe harbor percentages applicable when the average benefit test is passed. The safe harbor test is always more favorable than the ratio test, but the average benefits test must be passed to use the more favorable passing percentages. There is no such thing, to the best of my recollection, as determining if a rate group passes the average benefits test on a stand alone basis.

Are they able to demonstrate that it is non-discriminatory relative to current compensation? Even if they can, sounds unlikely.

in 1978, in Los Angeles Water and Power versus Manhart (a governmental plan case where longer female longevity was used to justify higher costs being charged to female employees), the U. S. Supreme Court ruled, 6-2, that it was illegal to take into account the differences in mortality between men as a group and females as a group with respect to any aspect of employee compensation or benefits. Consequently, no employment-related benefits can use different factors for males and females. This is a matter of the Civil Rights Act and the 14th amendment to the constitution. Subsequently (i.e., for nearly 40 years), no employee benefit plan has been permitted to apply different factors in determining such things as early or late retirement benefits or conversion to an optional form of benefits. Defined contribution plans have not been permitted to divide account balances by sex-distinct factors to calculate the amount of annuity payments that can be provided by an account balance. Sex-distinct annuities can be purchased from insurance companies, so long as the actual benefits payable are independent of the differential the insurance companies may be charging. Speaking as a non-lawyer: This is not an issue of an ERISA or IRC violation where a corrective filing can fix things. It is outright sex discrimination. This probably should be resolved under a class action lawsuit. If the sponsor has availed itself of legal advice, one presumes that this practice could not have been brought to the attention of the legal advisor. This practice could not possibly have been condoned by a competent legal advisor. As for the plan, if it defines actuarial equivalence using the 1951 Group Annuity Table for males, that would be fine if applied on a unisex basis.

Assuming that one eschews leading 0's

Sure, the rest of us have never encountered that! You could always amend last year's filing!

Line 6b = terminated participants receiving benefits (i.e., retirees), line 6c = terminated participants not yet receiving benefits (i.e., terminated participants with deferred vested benefits). This is exactly the same for DB and DC plans.

There is no reason, since all non-frozen plans perforce allow new participants in on the first day of the plan year, for 5500 software to just assume that the end of last year count is correct for the start of this year. If the 5500 software prepopulates this year's starting counting with last year's ending count, give serious thought to finding a new 5500 software provider.

1,715,233, 1,715,234, 1,715,235, 1,715,236,...

If the estate is below $X million, is there any tax on the estate at all? Is it not true that no taxes are owed by the heirs on inheritances from the estate? If the money is paid directly to the beneficiary from the plan, when would the estate owe taxes? When would the beneficiary owe taxes? If the estate were worth $700,000 prior to the plan distribution, what would be the difference in tax consequences between a $200,000 plan distribution to the estate (with all of the estate after taxes going to the son) and the son receiving $700,000 from the estate (less applicable taxes) plus a $200,000 plan distribution? Just trying to get a better handle on the reason for the son trying to "disclaim" his rights as plan beneficiary.

I am not a lawyer and don't work on defined contribution plans, but if the spouse predeceased the participant (as noted in the original post), then nothing would ever be payable to the spouse's estate. To be entitled to any plan benefits, the spouse must survive the participant. I don't work on tax matters, either. Is there some kind of tax advantage to having the plan benefits paid to the estate and inherited by the son from the estate as opposed to the son being paid the plan benefits directly? If so, would avoiding having to deal with the tax consequences of the son receiving the plan benefits directly be considered legitimate or a tax avoidance scheme? One presumes that the plan itself does not give the beneficiary a choice of that sort, and just says "figure out who the beneficiary is and pay the benefits to the beneficiary".

My take on this: If there were more than 100 participants at the beginning of the plan year, you have to file a Form 5500. Unless you qualify for an exemption, you will need an accountant's report. Note: This plan, being new, could not possibly fall under the 80-120 participant rule. You only get out of filing a full 5500 this year if you actually filed a short form last year. With an effective date of 1/1/15, there is no "last year".

If it is a scam, it would not be a matter of anyone gaining inappropriate access to plan assets. If it were an attempt to gain confidential information under false circumstances, that could be a problem, but aren't such pieces of information as the the employer cost a matter of public record (i.e., Form 5500 filings can be accessed by anyone online). It may be bogus, but what would anyone stand to gain if it were? That's the part I don't understand. I go back to the idea of telling your client that you don't know what the request is for, and that if they want you to help them respond to it, you will need more information. If they are as uncooperative as you have indicated, that will be the end of it. It's hard enough, with such clients, to do the things you know are required. Let slide those things that you don't know why they are needed.

I don't work on DC plans, but it seems to me that if the plan has terminated, whether the employer continues or not, all plan benefits/account balances have to be distributed, even for those remaining in active service. Why would there be a problem for allowing in-service distributions for a plan that has terminated if you can do that while the plan is still ongoing?

I may be wrong, but it couldn't have anything to do with ACA. There is no interaction between ACA and defined benefit or defined contribution plans (or at least none that I know of). Not to say that there is no information ever requested for census purposes with respect to defined benefit or defined contribution employer costs, but I had never heard of any such need. Is your client so difficult that they would not give you any information with respect to something they asked you to do for them? Not that it is easy to get to that point, but a good term for such a client is "ex-client".

You don't say what kind of plan, but I know that if a defined benefit plan terminates, the final distribution can include in-service payments to active participants. Is this not also true for terminating defined contributions (especially if the plan allowed in-service distributions outside of the plan termination context)?

People who really love their work (assuming that there are such people) might disagree with you!