Bri

Well, back when safe harbor notices for a 3% nonelective were required, then sure, it needed to be issued a reasonable time before deferrals for the year start.

I think you do have to forfeit the related match amounts. I'd have to think about whether it's FIFO or LIFO on the reduction. (Something from the 90s tells me the first dollars in are the ones you adjust for but I can't say why that may or may not be right. Thinking about earnings calculations and IRS safe harbor methods....)

And there's no defense for suggesting the correct deferrals began properly at $0 after the termination? (Notice is easy enough, although might cause head-scratching for an ex-employee....)

They were good with getting valuations as required (even quarterly). The hard part was with one company, their fund in the plan ended up being behind some sort of "gate", with limited way to get funds out.

Well, SECURE 2.0 hasn't become law yet, but generally a plan may include a QNEC to help to pass the ACP test in lieu of refunds. (See what your plan document may already allow, or if a plan amendment would be needed to customize something more tailored for your sponsor's wishes.)

I've seen it, I've helped their actual ERISA counsel with the DL application, and I've updated account balances based on it. I saw it as a trustee-directed investment with pooled accounting. The real ickiness was when things went wonky with the fund itself.

I say yes. Employed for at least part of the day, everything which would normally apply to employees does so here.

I also can't blame lawmakers for wanting to suppress the opportunity for tax-deferred (or in a Roth situation, tax-free) penny-stock billionaires to arise. Or in this case, something potentially as volatile such as crypto.

I'd be wary of failing to follow the plan's terms. And as this would be a discretionary amendment, I don't think you could do it retroactively either. Would it be "plausible to deny" you knew of the 401(k) amount when you allocated the full ESOP amount? At least then the horse has left the barn and you could potentially address the correction after you missed the 415 check? (Spitballin' for ideas....)

Does each plan allocate its amounts as of December 31? Maybe there's a technicality that the 401(k) amount didn't come first, and you could look at how that plan's document says to fix the issue (perhaps invoking EPCRS and a deferral refund).

Is something late if it's never due?

Plan Administrator overrides Schwab by issuing its own 1099-R amending the distribution value to $0. Easier if plan has its own tax ID, of course. (Really, I'm in one of those "I'll show YOU who runs this plan" sort of moods late on a Friday.)

Honestly, if they're willing to ignore any thoughts to file Forms 1099-R to the IRS regarding these "distributions" then there shouldn't be any issue, even if the custodian "thinks" there's a different legal plan. Force the issue by making the "second" plan the same 001.

Well, as long as the owners won't hit the 1000-hour mark in the next 15 days after you deliver their 204(h) notice. (Of course I'm assuming that's their plan's accrual requirement for a year.)

I'm thinking lots of people may have hit 1000 hours already....

Oh, gotcha - so not so much thinking 7/31 was last minute. Hmmm.....so I'm not sure the LII ends up being the biggest hangup, if you've still got the statement obligation itself with the same date. It feels like the LII add-on isn't going to be what causes you to be late with delivery, but rather just the actual balance determinations themselves. --bri

I just went to the DOL's fact sheet: Q2: For non-participant-directed plans, what is the earliest statement for which the lifetime income illustrations are required content? For plans under which a participant or beneficiary has his or her own account but does not have the right to direct the investment of assets in that account, the lifetime income illustrations must be on the statement for the first plan year ending on or after September 19, 2021. For most such plans, this will be the statement for calendar year 2021, which would be furnished no later than the last date for timely filing of the annual return for that year for a calendar year plan (Oct. 15, 2022). See Field Assistance Bulletin 2007-03 (Oct. 12, 2007) for timing requirements for statements for plans subject to ERISA section 105(a)(1)(A)(ii). This at least suggests you still have time, no?

I'm having the same problem this week with Fidelity - they think the sponsor needs to terminate the plan to account for the fact that the sponsor now has an employee. (Even though they're on TPA documents that aren't even "solo" versions.) And they expect any transfer to their version of "these accounts are okay to use in ERISA plans" to be handled via distributions. I certainly don't feel like writing the narrative for the sponsor to provide the IRS when any sort of examination has to explain what the fraudulent 1099s (even though they show rollovers) would be about because this is absolutely not a successor plan issue.

If the final 1099 form includes the extra 1900, then I think you're fine in showing everything "really" out by 12/31.

Ha, maybe this "unused" document can go towards some random plan sponsor who never signed a document but had all those board minutes and resolutions intending to set one up! Definitely one for the Upside Down.

Pretty sure that's an ERISA requirement, so it wouldn't be applicable for owner-only scenarios.

(I'm pretty sure one of the Relius doc authors comes by here on BL, he may see this soon enough and have more background to it.)

What about a SIMPLE 401(k) where it's still a qualified plan using the SIMPLE rules? (I'll be honest, I just double-checked on those since I never hear of anyone doing them.)

Does the plan document have any tiny print saying a divorce automatically revokes a beneficiary designation of a former spouse?

Hey now, don't make yourself a fiduciary - lay it out to the plan sponsor and let him/her pick!