TPApril

So things are different and you no longer file Form 5558 to file extension on Form 5330. Unclear to me that if you don't yet know the amount of lost earnings, how do you enter an amount to pay with Form 8868? Seems it does not accept zero.

We always file Form 5558 if extending a plan's 5500. However, sometimes, for a variety of reasons, a 5558 is missed, but it is confirmed that they meet the requirements for filing late under an Automatic Extension. I was curious if there is a trend to not file a 5558 if it is know the Plan Sponsor has filed an Automatic Extension and their fiscal year matches the plan year?

Company has 3 employees: owner and one other work full time. other works part time (under 1000 hrs/yr). All participant are in the PS (no 401k) plan and part timer receives PS every year (eligibility is simply last day worked) Owner wants to convert part time employee to independent contractor status and not allocate additional PS to part timer. Part timer is 40% vested due to initial years of employment, so I'm curious if there is a partial termination situation here that would result in him becoming fully vested.

Paul - thanks, and i do recognize this is a message board, not formally legal advice. my other idea up top was to put it right into forfeiture account to reflect formally going into the plan.

It's a standard recordkeeper, not a brokerage account. Ultimately, participant will never get that $35 due to distribution fees which will end up going to the recordkeeper themselves.

Upon review, it was determined a participant's 401(k) that was withheld from his paycheck in the amount of $35 was not deposited. Participant has since terminated over a year ago and took a full distribution. Recordkeeper refuses to reopen the account without new enrollment paperwork. Thinking to have the amount deposited to the Forfeiture account and be done with it. By the way, in terms of delinquent contributions, this is the only amount.

Very small TPA firm - a SOC Report has been requested. I'm curious if other small TPA firms have audits or documentation of their processes/systems prepared for them?

I'm curious: Plan reports on an accrued basis for contributions deposited after eoy. For delinquent contributions that are discovered at a later date in the following year and deposited prior to completion of Form 5500 for relevant year, I believe those contributions are accrued in as well. Howabout the related lost earnings? This is for 5500 reporting.

Your timeline is correct. You bring up a great question, but are you sure about that? To me the question wasn't so much about plan year of forfeiting and forfeiture use, so much as the situation of using one's own forfeiture to fund one's own top heavy contribution.

Yes the vested balance is under the force out limit, when considered by itself. However, intent is to do a final rollover of vested balance of top heavy contribution since we are still within 180 days of Special Tax Notice.

Indeed, if the terminated participant had not taken their vested distribution, the forfeited amounts would not be available and the Plan Sponsor would need to make the actual cotnribution.

Is it common to send COBRA participants as of prior eoy who no longer have COBRA a copy of the prior year SAR? One client is resistant.

She quit, was not laid off or terminated by employer.

Terminated participant took final distribution. Nonvested portion has been forfeited. As this was the only non-key participant, the full forfeiture account balance is from this participant. Plan has since decided to make a PS contribution for the prior plan year, and this participant is due a top heavy min 3% contribution. Plan doc allows forfeitures to be used towards top heavy minimum contributions. Doesn't seem to feel right, but any reason the top heavy minimum contribution cannot come from participant's own forfeitures?

The recordkeeper has put the money back into the plan in an Unallocated Account that we are now reconciling in addition to the plan's regular accounts. Preference is to get the participant out of the plan entirely.