thepensionmaven

This is what happens when most (we used to call them "insurance companies") report - cash basis. The "excess" was the contribution made for 2020 not credited until 2021. I think I will do all my plans on a cash basis, much simpler, and saves a whole lot of time this time of year.

Have not had this situation. Client, through payroll error contributed more than $26,000 for 2021; but took the deduction for only $26,000 and that is what the W-2 shows. Error most probably made with the last payroll in December, but all deposits for 2021 were made in 2021. Just because it does not make sense to take the excess out of the plan then put it back in one week later I don't think negates the fact that there was an excess, but it was cured in less than a week. Still need a 5330 and payment of the excise tax? Of course the accountant told the client not to worry about it, leave it alone because it was not an over-deduction, count the contriubtion for 2022, and hope they don't get audited.

Here's a goodie. Client filed late, is it beyond the realm of possibility to amend and go through DFVC?

Client filed 10/20, did not check box DFVC. If he gets IRS Notice, Letter, whatever, can he file as an amended and go DFVC, or did he need to initially file under DFVC? Next, is there a time limit between the filing under DFVC and actually submitting the filing and paying the fee.

This is a defined benefit plan effective 1/1/20. For 2020 filed SF with Schedule SB because this was not a one participant plan. The participant terminated 3rd week in January, 2021, not vested. Plan had less than $250K at the beginning of 2021 and ended 2021 with greater than 2021 I assume that 2021 can not be filed as a one participant plan and must also include an SB since the plan is a defined benefit? One day late, client not returned signed 5500. Have sponsors started receiving IRS invoices for $250 per day? Clearly for 2022, this is a one participant plan and must use EZ, which we know is not filed with Schedule SB. Won't IRS question if we submit with no SB?

2020 filed Form 5500-SF with Schedule SB as the owner had an employee; employee terminated in 2021, not vested. Participant count at 12/31/2021 therefore is 1, the owner. Do we file 5500-SF or 5500-EZ as a 1 participant plan??

Oh, this one's great! Thank you.

I'm almost afraid to ask, but was the letter from IRS or DOL? If from the IRS, oh no, here we go again.

Was form 5558 filed? I believe the Ida extension applied to plans that were due after 9/1 - if an extension was not filed, you're out of luck.

I assume you are in NewYork. This was covered in other posts, but was regarding DOL emails to clients, claiming they can not find Form 5500 for 2020 Basically use the same procedure, copy Form 5500 for them, note the "special " extension wording, mail your reply certified, return receipt and keep your fingers crossed. Good luck.

I have never dismissed a client - I am lost as to how to commit this to writing. I took over a DB plan I never should have, I should have known from my conversations with, and then an in-person meeting, this guy was totally clueless as to what plans he had - but always expected someone else to do the job. I'm sure a few TPAs have fired clients - any "sample" wording? The only thing I can think of would be totally unprofessional unprofessional, but ha been a total waste of my time. TX.

The safe harbor 3% has been used to satisfy the ACP test.

OK, elective contributions have been tested ADP and it passes. Another TPA informed me with SECURE 2.0, a QNEC (in this case, let's say 3% what we're using as 3% safe harbor with all the restrictions of the safe harbor as far as in-service and hardships) can be used to pass ACP. Is this not the case?

We have a SHNE no PS. Client (with "help" from broker) decided to add voluntary contributions up to the 415 limit. Three owners, two are doing the max up to $62K between elective, SH and voluntary. To play it safe, ran both ADP and ACP tests, apparently plan passes both on the basis that the unused portion of the employee deferrals were moved over to pass ACP. Does this make any sense?

I just received a copy of the signature page to the PPA adoption agreement, and it IS dated 8/1. Does anyone see a real problem here?

This one seems to be so off the wall, but very imaginative. One of my clients told me his investment advisor mentioned that deadline to restate his document for Post PPA is August 1st because July 31 is a Sunday.

Thanks for the quick response. After doing some more digging, there is a "maybe" safe harbor non-elective. An ADP test was done and passed. Apparently, the HCEs wanted voluntary contributions, and the NHCEs have elected not to ( hardly surprising) which obviously necessitates ACP. Plan passed ACP with a flat QMAC of 3%. Never heard this one before.

Client sponsors a safe harbor non elective and wants to add voluntary contribution to their accounts but no NHCEs will be making voluntary contribs. Plan ill need ADP testing, that is a given. With voluntary contribution made only for HCEs, will need ACP test which obviously will fail w/o QMAC. If 3% QMAC for all employees will pass ACP, is a flat % of comp allowed? Client understands the elective contributions will be subject to ADP testing. Can plan have ADP as well as ACP testing each year??

We took over a DB plan a few years ago and obtaining the last Valuation Report as well as SB was like pulling teeth (and we are not oral surgeons). The participant in question has terminated and client looking for me to calculate the amount due, through a current date. Upon his review, he's telling me the prior actuary counted a part-time employee as full time (1,000 hrs) for two years. Of course employers always complain the participant is getting too much money, but according to these new facts (and he supplied the hours worked for each year) the participant's place on the vesting schedule is lower than reported by prior actuarial firm. Instead of being 60% vested per the actuarial report, she is actually 20% vested. My dilema - should I redo the calculations with the correct information (my actuary's opinion) or "what's done is done" as per my ERISA attorney. Regardless of what the client "wants", if the plan is audited by IRS, they will consider this an operation failure and sanction the client.

I agree with you, but accountant and attorney insist as one of the trustees may have acted imprudently.

OK, but not to beat a dead horse, shouldn't the new plans be dated in 2022, not 2021? Not sure. TX.

Do you realize that by making these transactions (that the clients' accountant should be doing) you've become a plan fiduciary??

CuseFan, that was my first impression, thanks.

Yes, it IS possible, but per the attached, an extension either for the business or the plan (Form 5558) needed to be filed prior to the due-date. IRS announces tax relief for New York victims of remnants of Hurrican_ - www.irs.gov.pdf

Plan sponsor name changed from XYZ PC to ABC PC, one is a continuation of the other, same EIN. Original plan terminated, three new plans set up, one for each owner, one for employees. Would these be considered "new plans" and thereby following the above-mentioned cite from the EOB.