TPApril

Yes - we are doing DFVC. We are going to be conservative and report them as it would have been. Austin - My understanding on that is that once you have filed your late 5500's and filed the DFVC, you have 30 days to file the related 8955-SSA's by paper(!) and they qualify under the DFVC.

Plan has one HCE who is not an owner. ADP test failed and HCE received $15,000 in excess contributions. ADP test was rerun and determined that too much in excess contributions were distributed earlier this year (ie no 1099-R issued yet) and refund should have only been $10,000. HCE is happy to return the $5,000 to the plan in order to reduce tax liability. Earnings that were added on to the refund will be prorated and returned as well. Ultimately the 1099-R will reflect the lower amount.. I believe this is an acceptable correction, but not sure if we need to calculate earnings on that amount since it was refunded to include with the repayment..

Company never filed Forms 5500 and 8955-SSA since plan inception 5 years ago. Normally with 8955-SSA, a terminated participant from the prior plan year does not need to be reported if they took their full distribution before the 8955-SSA is filed (Ex, DOT=7/31/24; Distribution on 7/31/26; 2025 Form 8955-SSA filed on 9/10/26 w/out them). When filling out these prior 8955-SSA's, do we list terms as it would have been filed at correct time, or for anyone who has taken a distribution, can we leave them off entirely, rather than reporting them both as an A and then a D in a later year?

Last minute request to set up a retroactive plan. Upon requesting the Trust EIN, the site wouldn't process online so it will be done old school and they will mail out the EIN. Assuming the EIN does not arrive prior to contribution deposit deadline (10/15), if the actual trust account cannot be formally set up, can the deposit still be formally made?

But this is not necessarily the Plan's responsibility as they have no control over rolled over money. I believe the Plan needs to send a letter to the participant explaining that they must request such a distribution (in addition to explaining the situation and pending 1099-R's etc).

Upon review, an ADP test from a few years back (> 2) was determined to have failed. (Prior TPA never ran the ADP test). Both of the two HCE's have since taken full distributions as Rollovers, and both would have had excess contributions distributed. Earnings have been calculated on those excess contributions through actual distribution date. The sum of excess contributions plus earnings would not have been eligible for Rollover. So we are thinking there would be 2 sets of 1099-R's issued for that prior year: Amended 1099-R to reflect the lower amount that was eligible for Rollover New 1099-R to reflect the excess con + earnings that would have been taxable Just thought I'd see if there were any thoughts on this.

Ok, so, trying to do this the right way. Money with earnings has finally been restored to the plan. As a reminder this was a prohibited rollover distribution to an ira by an active key participant who was not eligible to take a distribution. 1. Transaction is reported on Schedule I 2. Schedule I has to check off yes to 4d for nonexempt transaction to a party in interest 3. issue a (first) 1099-R for prior year showing this as a taxable transaction, even though it was formally rolled over to an IRA 4. Prepare a VCP Here's the sad part, it seems this is taxable for prior year, I can't figure out how to get out of that since the employee is key. The amount taken out was over $1 million.

If I understand correctly, an existing plan established prior to SECURE 2.0 that moves to a PEP, and in the process terminates its original plan, still gets to grandfather in not requiring auto enrollment, assuming the PEP allows some plans to carry forward this grandfathered arrangement. On the same topic of auto enrollment and PEPs, a new small plan that would normally get a waiver from auto enrollment can still get that waiver in the PEP, again assuming the PEP allows for such flexibility.

One-person plan, employees are in a separate MEP. Owner withholds the max 401(k) once a year on his 12/31 paycheck which is cut every year on 1/5. The pay is included in wages for year ending 12/31. Turns out owner forgot to deposit the 401k for 6 months. Lost earnings was calculated and deposited Perhaps this is a longshot but if the 401k is not going to be deposited until the next calendar year no matter what, for Form 5330 purposes can it be considered late for the next year, or more likely since it is included in taxes for prior year filing, does it have to be in that year's 5330?

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.

Intent is to avoid politics here. The situation goes back to 2018. Missing participant who was not cashing RMD checks has been found and turns out was never missing, just doesn't want to cash a check for fear of being located by the government. Unknown whether participant is legal or illegal but there is an SSNO (Sorry I don't know details about all that). Yes 1099-R's are sent annually. Just trying to be creative here on how to get them their money. One idea - has anyone ever managed to get cash from a Plan to give out the RMD rather than in check form? Total account balance is < $20,000. Total outstanding uncashed RMD's < $1,000.