TPApril

It's a traditional pension plan. What doesnt make sense to me is that the payroll provider's uneditable template adds up the year's safe harbor contribution plus profit sharing plus the entry for pension plan. That's why I wasn't considering lump sum as an option to begin with, but had contemplated a present value of the accrued benefit earned during the year, but even then, I don't care for that idea, particularly how to go with an appropriate interest rate. There was no intent to do a projected benefit as this is left to the periodic pension plan statements (and we do hold salary increase projection at 0%). Easiest approach might be total accrued benefit (payable at NRA), along with a separate statement explaining to ignore the sum of ER contributions + pension plan benefit. Also gotta deal with vested status.

Plan sponsor is preparing a total rewards statement showing what the employee's pay and benefits sum up to and doesn't know what to put down under the Pension plan line. Doesn't seem to make sense to put their accrued monthly benefit. I'm curious what other plan sponsors do? Put down the value of the accrued benefit earned in the year? put down the present value of the accrued benefit earned during the year paid as a benefit at normal retirement age?

I know the answer but just thought i'd throw it out there. company always deposits 401(k) on time. first 401k with new recordkeeper, despite best effort they couldn't get it through until past 7 business days. I think we still need to report it but I feel like it's a reasonable period due to circumstances

Just a curiosity. Plan had an extension filed, and lo and behold they filed 5500 by original due date, with form indicating 5558 had been filed. Not that this is a particularly important question, but would the SAR due date be 2 months after original due date, or after extended due date?

Thanks Paul! The Notice is brief. My next question is: File them as snapshots in time, or can we exclude participants who would be filed as both 'A' and 'D' during the period?

Interestingly, never had a late 8955-SSA alongside late 5500's filed under DFVC. Plan in question never filed a 5500 for 3 years. Last 2 years of that there were 8955-SSA's that needed to be filed. File them late? Or file one consolidated 8955-SSA along with current year?

Company buys another smaller company and keeps its operations separate with its own EIN. But all employees are in the owner company's medical and benefit plans. No specific joinder agreement was signed. Two options of how to treat: Continue filing as Single ER Make them sign a joinder agreement and identify as multiple ER plan, with the understanding that prior year is being signed as Multiple ER based on currently signed Joinder agreement

Great, so you agree there is only one filing - 5500-EZ and DFVC combined. Thanks!

First time filing under DFVC for an EZ. I recall with regular 5500's, you file the 5500 first, then file the DFVC request. Seems unclear with the instructions, other than that you cannot do an electronic filing to get DFVC relief. Mailing address for 5500: Department of the Treasury Internal Revenue Service Ogden, UT 84201-0020 Mailing address for 5500 under DFVC: Department of the Treasury 1973 Rulon White Blvd. Ogden, UT 84201 So unclear to me if there should be just the 1 DFVC filing, or a 5500 filing as well?

Company was purchased by another in October. Calendar year plan year for welfare benefit plans. It was a quick sale apparently with no contractual guidance on sponsorship of the benefits, but they continued through the end of the year (& actually still continue). They are planning to have the 5500 filed under the name of the original owner who contracted the insurance carriers file for the full plan year. Ever seen where they file a short plan year and close out the plan, and the new owner would take over the 5500 filing for the last few months for another short plan year? Or very simply show the new owner as the plan sponsor as of a 12/31 snapshot of the plan?

I don't think that's possible. Under these circumstances, the plan Sponsor always signs the 5500, so their signature is the confirmation they have reviewed it. Was just curious about the separate authorization form.

For authorization so file 5500 on behalf of clients, we get them to sign the authorization form every year. Is that necessary? Is one authorization good enough for future submissions?

I think this was a great question for discussion. I was asked about incorporating the Unenrolled Participant notice to reduce notices, and upon reading it through, it almost feels more burdensome and administrative to track different groups of employees and participants, especially when unenrolled participants are supposed to require at least one notice per year as it is.

Bill - thank you sir. I'm not a tax strategist, but they are focused on growing non-taxable earnings. Personally, I'm not clear why they want to increase their tax liability this year anyway, but that seems to be what they've been advised.

This is in regards to 2024 being the first year that RMD's are no longer required from Roth Accounts. As of 12/31/23, owner has no Roth balance in his account. On 4/1/24, he converts through an in-plan Roth Conversion, 1/2 of his account balance to Roth. 1099-R will be issued. The question is whether he is still required to take a full RMD based on his 12/31/23 balances/money sources, or if this Roth conversion can cover a portion, if not a half or even all of the actual RMD?

Thanks! That's what I needed! Their other circular question was - should they take an allowable in-service distribution to pay off the loan, rather than defaulting and thereby having an outstanding unpaid loan balance within the plan which would limit future loans.

one-person plan in which owner has a loan with quarterly payments. They want to push off loan payments by a quarter. Doesn't seem right, but in so doing, they never default. What could go wrong?

Thank you kind commenters! Re the QNEC/SHNEC ideas - company has no interest in making any kind of contribution for the recent plan year. Interestingly, it is a fiscal year, so they could theoretically contribute catch up amounts for two different calendar years within the same plan year.

So there were no 401(k) (or other) contributions during the plan year. ADP test is based on prior year NHCE ADP. Since 2 x 0% = 0, no 401(k) is allowed for HCE in the next year. I just haven't had that happen before, but I believe the options are as follows: HCE's over 50 are actually limited to the catchup amount, rather than 0's. Prior to end of the plan year switch to current year testing

Wrap will be adopted this year and effective 1/1 of current year. It is too late to make it effective 12/31 of prior year. Planning to make the wrap plan a brand new plan, rather than continuation of prior one.

Plan Sponsor currently files all H&W benefits in separate 5500's. Plan Sponsor is going to adopt a wrap plan document effective 1/1 of current plan year. Prior plan year 5500 has not been filed. I'm getting dizzy thinking about this - how to include Schedule A's and incorporate counts to make the change. I'm thinking: Prior Year - because wrap plan not yet effective, file as normal, with counts reflected at eoy Current Year - all individual plans will file as Final and show both beginning and end of year counts of 0 and no Sched A's. New Plan will have an opening participant count and all Sched A's in the new plan

I've quote below from the 401k plan fix it guide. Plan failed ADP test 2 years ago. Seems to still be in a self correction program window of 3 years after the first year of correction. Under SCP below, 1st option is to bring up the NHCE ADP. The 2nd method would be far cheaper to just determine the correction amount (w/earnings) and then contribute that equivalent amt to NHCE's. However....all HCE's that are due a return of contributions have already terminated and taken full distributions. I'm thinking they will need to be sent letters detailing the amount of their distributions/rollovers that were not considered eligible rollovers. Preference would be to find an allowable correction that does not require a qnec to NHCE's. --------------------------------- Self-Correction Program: The EPCRS revenue procedure defines this as an operational error. Employer G determined the plan had established practices and procedures designed to keep it compliant and that the mistake wasn't significant. Correction could involve one of two methods: G could make QNECs to the NHCEs to raise the ADP to a percentage that would enable the plan to pass the test. In this example, each NHCE would receive a QNEC equal to 1% of the employee’s compensation. G must make these contributions for each eligible NHCE (if the contribution doesn't cause the 415 limit to be exceeded). Under the second method, the plan could use the one-to-one correction method. Excess contribution amounts are determined. The amount is assigned to HCEs and adjusted for earnings and this total amount is distributed to the HCEs An amount equal to the distributed amount is contributed to the plan and allocated based on compensation among the eligible NHCEs.

Peter - thank you for your thoughts! What we haven't figured out how to deal with is that there was actually a TPA they signed on with, and they did nothing. They've since been bought out by one of the larger national firms who themselves hasn't figured out that nothing has been done. Yes we have been fixing a number of problems that have occurred. Only one potential relief for audit purposes is that there has only ever been 401(k), no ER contributions.

I'm curious of any thoughts about a VFCP filing of a late large plan 5500 that checks No to Fidelity Bond coverage? Plan sponsor's broker does not want to set up a retroactive bond. Note - there are no plan auditors yet - no one seems to have capacity for a new large plan, even with multiple years to make up.

Large plan started a few years ago, but no 5500 was ever filed. Currently working on past filings and ultimately DFVC. They also never had a fidelity bond, or they can't find record of it due to complete change in personnel. Question is - I know retroactive fidelity bonds can be purchased, and that this is not meant to be done illegally, but can the 5500 be marked Yes for coverage, when it is being filed late for the first time? if not, is there any reason to buy the fidelity bond retroactively? Alternatively, it would not be marked yes until the 2024 plan year during which it is finally purchased.