TPApril

Any reason a medical plan offered through a non profit (nongovernmental, nonreligious) association would not be considered a Plan Sponsor and therefore be required to file Form 5500? Association in question is unhappy at the $4,000 DFVC penalty and would rather do nothing. Yes the potential consequences have been explained.

thinking about it, I guess they wouldn't need to file if it's self insured, no trust set up.

I don't believe so, but not really sure

When a medical insurance company provides its own insurance to its own employees, would that be considered Self Funded to the extent they would not file a Schedule A on their medical plan 5500? Should they be filing a Schedule C?

What general approach would you take - Plan sponsor always files timely, then they miss one year, notice it and file. Then after filing they receive penalty notice. Choices are amend filing for DFVC and then pay $750 provide a detailed letter explaining why you couldn't file timely and asking for complete removal of late penalty my approach beforehand woulda been to file as dfvc from the get go but that's another item.

I seem to be more familiar with new plans allowing for immediate participation for existing employees. Assuming there are over 100 participants on that initial start date of the plan, then, assuming plan year is over 7 months, my understanding is that an audit needs to be performed.

What did you ever conclude?

Plan Sponsor has asked for 2 employer contribution types, with similar eligibility, as follows: Individual rate groups - this would be immediately vested prorata allocation - this would be subject to a vesting schedule There are no HCE or key employees receiving contributions. Contemplating plan design options, but not sure I'm seeing it in the volume submitter document we're setting it up with. Is it as simple as setting the first contribution as a QNEC?

Plan is a mess. 5 years ago, while dealing w/downturn, company released auditor & TPA as they wanted to maintain plan but needed to reduce costs. For 1st 2 yrs count was btwn 100-120, so they filed as large but no audit. They then went < 100. All this time, they reported no delinquent 401(k) contributions, in spite, as we have found, many. They want in good faith to clean up the plan, pay lost earnings, submit VFCP, amend last 3 year 5500's (small plan years). But they refuse to pay for auditor to audit those 2 years (2011-2012). We have explained that the VFCP will include those years and we've explained risks. Just contemplating next steps but wondering if anyone has any thoughts.

On the one hand, yes it's cringy...on the other hand, VCP's such as the one we are indeed doing for said plan do bring in extra revenue....and keep us on our toes with compliance issues...

Let's just say it all sounds easier said than done. Am I curious to know why it doesn't reconcile? You better believe it. Yes I've exhausted every type of reconciliation item I can think of and a number of hours I won't be billing them for. This particular takeover plan was doing it in house and former employee tasked with the 5500 did not leave records. Yes I have looked for potential fraudulent transactions. My inquiry above may seem simple, but I've always managed to reconcile every other account over a good number of years and have never had to proceed as such. It's actually a good case study of why 5500's are best left to professionals.

tpa firm cannot reconcile 5500 with prior year's trust on a new account. thinking to file current 5500 with actual opening balance, which would not match prior year's 5500 closing balance, and also without amending prior year's 5500 since cannot reconcile that year's opening balance as well. curious of other best approach practices to this scenario?

While I don't recall our source or reasoning for determining this practice, as regards to late H&W plan 5500s, we typically send out only the past 3 SAR's, and even then, we don't ask the sponsor to reconcile who receives them but have them send it out to the recipients of the most recent 5500.

Nope, came out of company general account

On this same line of thought on a plan with immediate entry for 401k and then 1 year wait / mid-year entry for match, say the plan used compensation from date of participation, would the 401(k) used to calculate the match also be from date of match participation, or rather from the beginning of the year?

That's where I'm not clear. Their W-2 pay included the dollar amount of the gift (with tax), and there was also 401(k), but they received the full amount of the gift, and also the 401(k).

Great recommendation on adjustment to definition of comp. I asked them where the 401k came from and they said from the ee which didn't make sense to me. So the idea of treating it as an employer contribution of sorts makes sense to me. However there was match allocated as well. Complicating it even further was that those who had already reached their 402g limit did not get a 401k contribution (but did get a trueup match). So, treat both contributions as is as some kind of corrective ER and that's that? Only 1 was HCE so don't think there is discrimination issue.

401k Plan uses W-2 Comp. Numbers below are made up for example. Company surprised its staff @ annual holiday party with $400 ipads. On 1/3 of next calendar year they processed corrective payroll for the value, including tax ($424). They also included 401k. So an ee with a 10% rate had $42.40 in 401k put in. Something sounds fishy to me. Should the payroll have shown 424/.9=471.11 since 471.11-47.11=424? I'm seeing circles and wondering if the 401k was calculated correctly, let alone the right dollar amount used for W-2.

Now that the 5500 extended extension is not in effect, is there still an extension on corporate tax returns, and by default corporate contribution deadlines?

generally when we create a wraparound plan doc merging H&W benefits that filed their 5500's separately, we file the original plans for the full year as a Final with zero participants in the same year the new plan starts. example: 501, 502, 503 - 12/31/16 filed with count of 150 each 510 - new plan effective 1/1/17. 501, 502, 503 - 12/31/17 filed as final with zero count 510 - 12/31/17 includes all Sched A's is this generally what's done? corollary question: one of the plans being merged is a 6/30 plan. It is now March and we know the next filing will be a final with zero count. Can we file that 5500 (6/30/16) prior to the period actually ending?

It seems that in the old days (10-15 years ago), it was common to find FSA plans filing small plan 5500's with < 100 participants and a Schedule I, often with very small balances remaining in a General Assets bank account. In line with IRS Notice 2002-24 which eliminated the requirement to file 5500 for small Cafeteria plans, it seems many of these plans simply stopped filing, no Final filing, no 4R code. So my curiosity today is, do we revive these 5500's so as to Final them, particularly where a wraparound document has been created which would incorporate this plan? In so doing, should the last filing from years ago be amended to imply 4R? Or just leave them as is from many years ago?

Plan doc terms: Eligible on 1st of month next following 1 year of service Payroll periods: Twice monthly, but paid 5 days after end of payroll, so 1/31 payroll is paid 2/5 Question: Employee is hired 1/15 and becomes eligible 2/1 of following year. Would participant begin participating on payroll paid out on 2/5, or 2/20? Justification for 2/5 is that it is paid after eligibility date. Justification for 2/20 is that 2/5 is based on pay earned prior to eligibility date.

I found a related article put out by ACOPA last year that discusses the use of the maximum allowable excludable period: https://www.asppa.org/News/Article/ArticleID/6278

On the theme of a participant who is considered an excludable employee in the system, but a different scenario.. Employee hired 12/21/15. System is treating him as otherwise excludable for 2016. I generally treat 1/1 as the cut off date. Is this standard, perhaps if hired after 12/15 to exclude them for the following year?

Payroll does not process 401k contributions. They take the percent he tells them and they run it through their system. So contribution was made assuming payroll company was informed timely. Amount was deposited as a 401(k) contribution. W-2 will not match. Is transferring that amount to his ER account allowed? Note that amount is ~$500.