Bill Presson

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.

Concur

If I remember correctly Mid Atlantic used to do something like this in conjunction with TPA firms that did in house daily val.

We've got offices in Orange County and in San Diego. Any preference? I'll ask them when I know.

Back in the days when I worked with a couple of firms that did inhouse daily valuation recordkeeping, we filed all our plans on a cash basis. It's very common. WCP

We use the FTW volume submitter document that is in an AA and BPD format. Section 7.08 in the BPD outlines what needs to happen if there is a missing payee. You can also enlist the services of Penchecks or Millennium Trust or others is missing participant searches.

Sounds vaguely familiar... ?

I believe it to be technically possible, but not recommended. Depends on whether the TPA is performing the "recordkeeping." As I said, I don't recommend it.

Luke, I agree with the conclusions, but don't agree that there isn't guidance. There is. It's in the document. It says exactly what to allocate, how to allocate, and when to allocate.

Correct.

Correct.

I avoided even opening this thread because the title looked boring. Then it kept showing up with new posts so I just now opened and read through this. I'm actually quite stunned with some of the positions taken here. My votes, FWIW: 1. If $100k is deposited to a pooled account early in a plan year, it's not allocated as a contribution until the plan says it's allocated. Generally that's the last day of the year. 2. If the $100k earns $5k, that $5k is allocated as earnings and not as additional contributions. (Occasionally, we'll have clients park this $100k in a business account outside the plan. If the $100k earns $5k in that situation AND then $105k is contributed to the plan, THEN the $105k is allocated as contributions). 3. If the $100k loses $5k, the $100k still has to be allocated as a contribution, and the loss is allocated as a loss of earnings. This is generally considered a bad thing. WCP

If it's a former employee, why isn't the former employee eligible for a distribution? Doesn't have to be called an RMD.

Typing out loud here: what if the entity that wanted to revoke safe harbor elected to spin off their portion in the plan to create a new plan and then revoked safe harbor? I assume that's possible? Then each would have to satisfy coverage testing on their own?