pmacduff

Albany, assuming there is a refund, remind the HCE, that getting a refund isn't the worst thing to happen. The worst thing to happen is choosing to defer less and passing the test. Because that means he/she COULD have deferred more. Getting a refund means they deferred the maximum allowed by law.

In my opinion, you need to have more to go on than "the market was down." Have the client or investment institution provide you with the rate of interest those participants would have received had the matching contributions been invested in their accounts (assuming participants give investment direction, those rates would likely be different for each participant). It's possible (although maybe not likely) that one participant was invested in a very conservative investment vehicle and had a small positive return. If all of those accounts had investment losses, the safest thing to do may be to not allocate interest on the late matching contributions (rather than reducing the matching contributions for the loss, although there may be validity to that argument). There's no requirement to allocate interest if there is none.
We have done a few corrections where we did not include interest because of negative returns during the period of failure. We always document an EPCRS correction with a memo to the file that describes the failure; gives a detailed description of what we did to correct the failure, including the process, calculations, and other considerations, if any; and recites which sections of EPCRS we relied on in making the correction. And we attach any pertinent calculations or documentation (such as something showing what the interest rates were for each person). This is very helpful for the client to have in case of audit so they can show that they appropriately fixed an operational failure. It's also helpful in cases where there are personnel changes in a company and the new people are trying to figure out what their predecessors did.

remember that once you add a discretionary profit share you lose the top heavy free pass.  If the safe harbor is the 3% non elective (as opposed to the safe harbor match) then that should cover the top heavy requirement anyway but thought it worth mentioning.

remember that once you add a discretionary profit share you lose the top heavy free pass.  If the safe harbor is the 3% non elective (as opposed to the safe harbor match) then that should cover the top heavy requirement anyway but thought it worth mentioning.

remember that once you add a discretionary profit share you lose the top heavy free pass.  If the safe harbor is the 3% non elective (as opposed to the safe harbor match) then that should cover the top heavy requirement anyway but thought it worth mentioning.

Hi Austin - I found this with a Google search:
"Annual Audit, Form 5500 Filing Requirements
The DOL issued changes to Form 5500 in December 2021, including an instruction that PEPs must check the MEP box in Part A of Form 5500. Participating employers with 100 or more participants in the PEP will need to provide a qualified independent accountant’s report (often called a “plan audit”) for their portion of the PEP, which must be attached to the PEP’s Form 5500.
PEPs are required to undergo an annual audit unless they satisfy the exemption rule. No annual audit is needed if each participating employer has 100 or fewer participants and there are fewer than 1,000 total participants in the plan.
The new rules require PEPs to confirm compliance with the Pooled Plan Provider Registration Form (Form PR) requirements. PEPs must also provide the AckID number for its latest Form PR filing, and PEPs with more than 100 employees must file a Form 5500 (they cannot file a Form 5500-SF)."
I would think if you are marking the "MEP" box then you would need to do the attachment with the Companies and contributions.
 

HCE determination (and lots of other things) is made under section 318 and is different than attribution for controlled groups (section 1563). Under 318, a parent is deemed to own a child's stock no matter the age of the child or the percentage ownership in the business.
I love this summary from Lincoln.
https://www.lfg.com/wcs-static/pdf/Attribution of Ownership in Retirement Plans - PDF.pdf

IMHO I think the plan would still prepare a 1099-R for the outgoing funds as a direct payment distribution (if that's how it went out).  It's up to the participant to report it properly and have the backup information when he files his personal tax return that he rolled it into a tax qualified vehicle within 60 days.  No matter that he rolled it back into the same plan, that just reports as an incoming rollover to the plan.  Again - this is just my opinion on how I would handle this situation.  It's ultimately a wash if it all happened in the same plan year but I believe the plan needs to show it as it happened.....
my two cents!

IMHO I think the plan would still prepare a 1099-R for the outgoing funds as a direct payment distribution (if that's how it went out).  It's up to the participant to report it properly and have the backup information when he files his personal tax return that he rolled it into a tax qualified vehicle within 60 days.  No matter that he rolled it back into the same plan, that just reports as an incoming rollover to the plan.  Again - this is just my opinion on how I would handle this situation.  It's ultimately a wash if it all happened in the same plan year but I believe the plan needs to show it as it happened.....
my two cents!

IMHO I think the plan would still prepare a 1099-R for the outgoing funds as a direct payment distribution (if that's how it went out).  It's up to the participant to report it properly and have the backup information when he files his personal tax return that he rolled it into a tax qualified vehicle within 60 days.  No matter that he rolled it back into the same plan, that just reports as an incoming rollover to the plan.  Again - this is just my opinion on how I would handle this situation.  It's ultimately a wash if it all happened in the same plan year but I believe the plan needs to show it as it happened.....
my two cents!

seems like we should have a half day today then, eh?😁

IMHO I think the plan would still prepare a 1099-R for the outgoing funds as a direct payment distribution (if that's how it went out).  It's up to the participant to report it properly and have the backup information when he files his personal tax return that he rolled it into a tax qualified vehicle within 60 days.  No matter that he rolled it back into the same plan, that just reports as an incoming rollover to the plan.  Again - this is just my opinion on how I would handle this situation.  It's ultimately a wash if it all happened in the same plan year but I believe the plan needs to show it as it happened.....
my two cents!

IMHO I think the plan would still prepare a 1099-R for the outgoing funds as a direct payment distribution (if that's how it went out).  It's up to the participant to report it properly and have the backup information when he files his personal tax return that he rolled it into a tax qualified vehicle within 60 days.  No matter that he rolled it back into the same plan, that just reports as an incoming rollover to the plan.  Again - this is just my opinion on how I would handle this situation.  It's ultimately a wash if it all happened in the same plan year but I believe the plan needs to show it as it happened.....
my two cents!

IMHO I think the plan would still prepare a 1099-R for the outgoing funds as a direct payment distribution (if that's how it went out).  It's up to the participant to report it properly and have the backup information when he files his personal tax return that he rolled it into a tax qualified vehicle within 60 days.  No matter that he rolled it back into the same plan, that just reports as an incoming rollover to the plan.  Again - this is just my opinion on how I would handle this situation.  It's ultimately a wash if it all happened in the same plan year but I believe the plan needs to show it as it happened.....
my two cents!

Bill is 100% correct of course - however this is such a common misconception that I must comment too. 
What would you do if the market goes way down and the participant no longer has 50% of the loan amount that was security?
They can certainly take the hardship if the plan allows and they meet the criteria.

plus they are so easy to file, why not?

plus they are so easy to file, why not?

Bill is 100% correct of course - however this is such a common misconception that I must comment too. 
What would you do if the market goes way down and the participant no longer has 50% of the loan amount that was security?
They can certainly take the hardship if the plan allows and they meet the criteria.

Lou is correct - according to the 2021 945 instructions:  "If the total amount of tax for 2021 is less than $2,500, you’re not required to make deposits during the year."
You will be able to get a voucher for 2022 when the 2022 945 forms are release later this year.
Hope this is helpful.

I had to smile when I read Annie's last post....I have worked on Relius my entire career (32 years).  We were on FDP to start - boy those were the days!  You could go to Miami for training and were treated like kings and queens, great training, great people, great dinners, etc.  You called and got a real person when you had a question.  (heavy sigh)  We then transitioned to Quantech.  Always used the stand alone systems for both FDP and Quantech.  Then finally currently on ASP.  One advantage from way back is that they keep the software udpated, which I like as opposed to having to do our own updates on the stand alone systems.  It took some getting used to ASP (still getting used to it 🙂).  The software itself is MUCH slower at times.  Tried to blame our internet connection, but that is screaming fast for everything else and even the log in to ASP, so I'm pretty sure it's just ASP.  Haven't had a LOT of service issues but you are right about the slow down on those too.  Thankfully I haven't had to put in any incidents because I'm not able to log in to the Portal.  I got locked out and then couldn't get it to reset so I have to call to get a reset for that and haven't had time.

I had to smile when I read Annie's last post....I have worked on Relius my entire career (32 years).  We were on FDP to start - boy those were the days!  You could go to Miami for training and were treated like kings and queens, great training, great people, great dinners, etc.  You called and got a real person when you had a question.  (heavy sigh)  We then transitioned to Quantech.  Always used the stand alone systems for both FDP and Quantech.  Then finally currently on ASP.  One advantage from way back is that they keep the software udpated, which I like as opposed to having to do our own updates on the stand alone systems.  It took some getting used to ASP (still getting used to it 🙂).  The software itself is MUCH slower at times.  Tried to blame our internet connection, but that is screaming fast for everything else and even the log in to ASP, so I'm pretty sure it's just ASP.  Haven't had a LOT of service issues but you are right about the slow down on those too.  Thankfully I haven't had to put in any incidents because I'm not able to log in to the Portal.  I got locked out and then couldn't get it to reset so I have to call to get a reset for that and haven't had time.

From the ever popular Google search:   "Can you undo a Roth conversion in 2021?   You can't reverse your decision
  Today, recharacterization of converted Roth funds is prohibited by the Tax Cuts and Jobs Act. In other words, there's no going back once the conversion is done."

My understanding is the same as yours that the audit requirement is based upon the BOY count.  I think that the 5500 instructions seem pretty clear about that.  I don't see any mention affecting the BOY count rule in the event of plan termination.  I vote with you Pammie57!
 

I'd want to know - did this occur in two different plan years?  If so, then the participant got credit for the taxes that were paid in to the IRS on his behalf.  That amount (which would have been reflected on the 1099-R form) went toward his overall total tax debt. 
Even if the distribution occurred in the current plan year, the participant would still receive credit for those taxes paid into the IRS on his behalf  so I would say that the participant would have provide 100% of the distribution amount back to the Plan.
 
 
 

I'd want to know - did this occur in two different plan years?  If so, then the participant got credit for the taxes that were paid in to the IRS on his behalf.  That amount (which would have been reflected on the 1099-R form) went toward his overall total tax debt. 
Even if the distribution occurred in the current plan year, the participant would still receive credit for those taxes paid into the IRS on his behalf  so I would say that the participant would have provide 100% of the distribution amount back to the Plan.