TPApril

Thanks - there's no business or contractual relationship between them, just they have completely different roles within a certain industry and so they encounter each other.

I don't think there's a conflict of interest issue here, but just curious for anyone's thoughts - Turns out that my spouse knows professionally a business owner that has been referred to me. Is that something that would typically be disclosed up front?

MP Plan, so 'individual rate groups' are not currently an option, nor do they seem to be an option in the current restatements. So plan uses 'Defined Groups' wherein all regular staff receive the same percent contribution. Owners, HCE's and other senior positions receive different defined percents which are defined by group. Question - aside from what the regular staff receives, does the SPD need to disclose what percent the owners and other groups receive? I think no, but curious for another opinion. Furthermore, can a Defined Group be an individual person, in the way 'individual rate groups' are? Reason for the question - there is one defined group that the ER is hiring a new employee in, but they would like to grant that person a higher percent than the other person currently in that defined group, but they have the same public title.

Getting back to you, somewhat belatedly. Upon review, I feel like the H&W safe harbor is actually easier than the updated retirement plan electronic distribution regulations.

I'm outta breath from running... What happens to a troubled plan when there is no TPA to take them on?

401(k) Plan is in awful shape, so owner, whose business is in just as bad shape, has asked to terminate it. As far as I can tell he is simply not going to resolve everything and just wants to give the participants whatever balance they can. He also has no intent of paying fees related to VCP and VFCP corrections. So I've basically been asked for help so that participants can get balances paid out. I know the typical response is run, run for your life but I've never believed that is truly a solution, nor does that benefit the non-owner participants. Apparently, he has not paid at least 2 years worth of safe harbor contributions. This is a pooled account and the owner has proposed the following: He has no intent of making those safe harbor contributions, but he would be willing to give equivalent balances (contributions + lost earnings) out of his account balance to help make those participants 'whole'. I"m just curious of any thoughts about this.

Alas - not following the rules and getting the fidelity bond late, or not following the rules and reporting it even though it was not effective at the date of the 5500? I know, obviously both.....

I'm curious when most new (small) plans tend to acquire their first fidelity bond and how that affects reporting on Form 5500-SF. New plan didn't manage to purchase their bond during first year plan in effect (2020), and only purchased upon review in early 2021. My approach is to report no fidelity bond on 5500-SF but just wondering if it's legitimate to report the bond since it's in effect at time of filing 5500-SF, even though not in effect during that plan year.

As of 1/1, a company changes its name and as well as the plan's name. FIling 5500 for the prior 12/31 pye before such changes take effect. I'm thinking 5500 is filed with original plan name, but with new plan sponsor name. Then the following year the plan name is updated on the 5500. I could be off base here.

I have pushed back against this, asking them to focus on 'intent' fwiw of their deposits and that while a cpa may thrive on creative accounting, their tpa cannot defend this approach.

follow up to my last post - cpa has advised plan sponsor to adjust the prior year contribution and treat a portion of that as making up the loan payments on a timely basis. The outstanding contribution will be made up timely. Not happy about this though.

Professional firm of partners. One Partner, a key employee, never started loan payments and now that we are passed the correction period, he would like to be up front and correct the loan by repaying missed payments with interest, reamortizating and submitting under VCP so as not to default. Similar to above posts, and Form 14568-E (rev 6-2018) Section IIB, he cannot use this form to file. So is a VCP not possible in this case? Best or only solution is to default the loan?

true, but the dates were changed from the actual case to be a more generic question, in this case it does matter actually. I just found it interesting to contemplate the event happening around 12/31.

They are set up as part of payroll which happens on the 15th, 30th of the month, although pay/deposit is actually made the following week. So the amortization schedule shows a payment due 12/31 that would have been deposited 1/5. It was missed and no further payments made so just trying to clarify if default date is 3/31 (based on 12/31 in amortization schedule) or 6/30 (based on when deposits were routinely made).

Thanks Bill! Yes of course, 3/31 & 6/30, not sure what I was thinking but I actually do know that ;).

Say payroll date is 12/31. Paychecks are not typically issued until the following week, ie in the following month. Loan payments were stopped. Would the loan default day (at end of 2nd quarter following first missed payment) be 6/30 or 9/30?

Makes sense for this particular business actually, but question has more to do with how a prior TPA completed the 5500, reporting the lower amount of $500,000 rather than actual bond amount.

For sponsors who have bond coverage greater than statutory limit of $500,000, I'm curious if 5500's are generally prepared with the actual coverage amount or the higher amount? Does it matter? Not necessarily for audit purposes, but it does matter when the 5500 signer cares.

Excellent points as always, I should have included that using the payroll version of comp vs the plan doc definition of comp is more beneficial to all employees. There would be no additional contributions or corrrective withdrawals. If they go with plan doc def some money would have to be pulled from the match.

Plan set up beginning of last year with a certain definition of compensation. On payroll, a different definition of compensation was used. To what extent can plan be amended retroactively to match what has been done in practice (ie self-correction)?

One owner has 4 separate businesses, all somewhat related, working at the same location, but separate employees. single or multiple employer plan? I'm thinking Single.

Employee level question - Employee elected maximum allowed into employer's Health FSA plan. Employee is terminating and has 2 questions: Is employee required to submit FSA claims prior to last day of employment (ie mid month), or last day of coverage (ie last day of month), taking COBRA out of the picture Can employee then elect any FSA amount with new employer, regardless of how much was either put into the account of first employer or reimbursed/used at first employer?

One consideration for incorporating the Vision plan with less than 100 ee's into the wrap plan as a whole - by doing so, the Vision plan will not have an ERISA compliant SPD which it may not have otherwise. The trade off of adding into the 5500 may be worth it.

Austin - two comments: Interestingly enough, this particular late deposit of one day was reported to me by the client (ie I've trained them well to take their deposit timing seriously) The question at hand, and all of your comments point more directly to the elephant in the room - ie the current regulations are too impractical, arduous and costly and need beyond belief to be revamped. Which leads me to another question - I haven't reviewed the new epcrs guidelines but saw something about de minimis errors being increased from $100 to $200 or something like that. What with greater acceptance of the reality of de minimis errors, can this example be treated as de minimis and ignored?

Austin - I don't think it's micromanaging, I think it's part of being a full service consultant. It's generally pretty easy to download deposit dates, most clients have 24 or 26 payrolls, some 52. If you're filling out the 5500 correctly that's what we do. Sort of old school in that we don't make the client do everything for us that we do for them?