Bill Presson

I would correct the things for the period you were hired to work on. And give them a letter advising them of the issues and your concerns. Since you haven't reviewed the prior years, you don't really "know" there's an issue. Our engagement says we're under no obligation to audit or review prior years. If they want to fix it, they can hire you to do so. If not, it's not on you. Don't make their problem your problem.

And then hire a professional TPA to do all your 401(k) compliance work.

Well, there is that.

Why would someone use Roth money in a plan to pay life insurance premiums?

Most flexible benefit (or cafeteria) plans have "cash-in-lieu" options which it appears you've elected. That means that you technically elected cash rather than a healthcare plan. Their plan also appears to then require that "cash" to be contributed to the 401(k). So, that's how they're handling it. Since 401(k) contributions don't enjoy the exact same tax benefits as a cafeteria plan, running it through payroll ensures the appropriate taxes are paid (ie FICA).

Agreed.

We call them consultants instead of administrator to avoid the confusion over the official PA. And, generally, (but not in stone) a person is eligible to be a Senior Consultant with 10 years experience. Doesn't have to all be with our firm.

Just be careful with this because the employer has to monitor EACH employee separately and ensure they know when they hit 1000 hours. The larger the number of employees, the harder that is.

Generally those things are covered in the representations and warranties in the acquisition agreement. In almost all cases, the transaction will be asset based and the prior owners will retain all lingering liability. Often the sellers will obtain some kind of tail coverage (much like a physician) to cover ongoing liability. The acquiring firm will have 0 liability assuming they have a decent attorney. ETA: if it's still a client, TPA #3 will probably have some responsibility to repair the issue, but any excess fines/legal costs generally is deducted from the payout to the sellers.

Why would you have any responsibility to a client that has been gone for 10 years?

100% to 15% match?? Nice.

I think this is kinda what we were hoping for. https://www.asppa-net.org/news/irs-issues-guidance-mid-year-amendments-certain-safe-harbor-plans?utm_source=MagnetMail&utm_medium=email&utm_term=bpresson@egps.com&utm_content=COM_APPA_eNews_06.29.2020_MON&utm_campaign=BREAKING NEWS%3A IRS Issues Guidance on Mid-Year Amendments to Certain Safe Harbor Plans

Agree with the others. But I'm also betting y'all have already provided the items above.

When I get something this tangentially weird, I have always said "it looks like it might be able to be done. But I'm not an attorney. If you want to do this, you need an ERISA attorney's blessing and guidance. If you won't do that, then we will have to resign." If I don't do that, then I've allowed the client's problem to become my problem.

Thanks but how would amending retroactively to the beginning of the year solve the math?

I say no. A participant that elected to defer all their 401(k) in the first 3 months would be hurt by this change without any way to fix it.

I know this is mostly an old thread. BUT, if you're going to switch DC document software, now is the time to do it.

Advice from Steve Martin: You can be a millionaire...and never pay taxes! You can be a millionaire, and never pay taxes!" You say, "Steve, how can I be a millionaire, and never pay taxes?" First, get a million dollars. Now, you say, "Steve what do I say to the tax man when he comes to my door and says, 'You have never paid taxes'? Two simple words. Two simple words in the English language: "I forgot!" How many times do we let ourselves get into terrible situations because we don't say "I forgot"? Let's say you're on trial for armed robbery. You say to the judge, "I forgot armed robbery was illegal." Let's suppose he says back to you, "You have committed a foul crime. You have stolen hundreds and thousands of dollars from people at random, and you say, 'I forgot'?" Two simple words: "Excuuuuuse me!!"

Assuming by "adult" you mean 21 or over, you don't attribute stock to the parent or child unless they already own more than 50% of the business. I don't see this meeting the criteria for a CG. WCP

If it was already given to the client, then the actuary can get it from the client. I can't believe anyone would let a client go 4 years without paying. And I wouldn't take on a client that hadn't paid the prior provider for 4 years.

This from Ms Ilene Ferenczy might be helpful: https://ferenczylaw.com/article-defined-benefit-plans-determining-professional-status-of-plan-sponsors-for-pbgc-coverage/

Thanks BG. I'm hearing that this is still under consideration. But nothing official yet.

You can do it, but if the plan is top heavy, the otherwise excludable group will likely have to get a top heavy minimum contribution.

DJ, my gut tells me there will be some pressure for flexibility and I haven't seen anything that would prohibit it. However, one of the "advantages" of a PEP is supposed to be lower costs that will make it easier for small employers to start plans. I don't see where that's really going to happen. While there is a single 5500, the TPA still has to get census from and test each employer. The RK still has to track each employer and provide reports. The advisor still has to meet with each employer and, theoretically, have employee meetings for each employer. The only place I see saving money is on the fund share class. So, flexibility is an increased cost (or at least little difference) for the plans. I'm still not sold on the advantages of a PEP.