jpod

FGC, obviously bankruptcy excuses nothing, but the facts stated are that the PA/Plan Sponsor has no assets. So, is there some individual who would have exposure to penalties or sanctions by not causing the PA to file, or to file but without an audit report? The Bankruptcy Trustee personally perhaps?

Oh, so you mean that the Plan document says that the Plan may be amended by the Plan Trustees. Ok(?).

This is a compliance question and a penalty exposure for the plan administrator. Who is the plan administrator? If it is the plan sponsor this is now the Bankruptcy Trustee's issue to worry about. As a side issue, you said "trustees sign plan termination amendments." I assume you meant the plan trustees, not the Bankruptcy Trustee. Did the plan trustees have authority to amend the plan?

I'd be interested to know what the IRS thinks about that kind of language in an election form. Hard to believe that the IRS would be willing to give an employer a free pass to make plan administration errors just by including some "fine print" on an election form, but I can see the logic of it.

Ok, then I agree with QDRO that the "ratification" argument is worth a try under VCP. Don't have enough experience with this situation to know whether going the John Doe route is the way to go.

What type of audit? An IRS audit?

No direct experience, but aren't there DOL Advisory Opinions that address when (if ever) welfare plan premiums are plan assets?

Will the closing agreement waive liability for the minimum funding excise tax? Be careful before you settle this case.

Speaking of Form 5558, does anyone think it's a bad idea to put multiple 5558s for the same employer in the same envelope when filing by certified mail/return receipt requested under a single cover letter? (In this case the employer is filing 8 5558s.) In the old days you had a single 5558 for multiple plans, but should there be a concern with the staff at Ogden messing up if there are multiple 5558s in the same envelope?

Ok, in place of "I don't know," how about "I didn't anticipate this question(these questions) and what's the relevance anyway?"

It's never happened to me (as a POA), but if they would ever ask I would respond by saying "I don't know." They have no basis for pursuing it any further.

Was the January 2016 contribution a 2015 contribution? (You can set up a SEP after the close of the first year up through the due date of the tax return for that year.) If so, there can't be any issue here.

That's exactly what I am thinking. It never occurred to me that it could be non-elective, and I don't recall ever hearing anything about it, but I found that little nugget too. I am just wondering if it is as simple as that and if anyone with experience with non-elective 457(b) governmental plans can confirm this.

The simple answer is "yes, you're wrong." SRF is a relevant concept if the intent is to structure a plan that is exempt from 409A, but you don't need one for a plan which by its terms is subject to 409A. And, for what it's worth you're right that employer insolvency is not a SRF for 409A purposes.

Your post suggests you think that a SRF is needed. If so, why?

Governmental employer has agreed to make the maximum annual contribution permitted for a senior manager to a 457(b) Plan, i.e., a non-elective contribution. Does the extra $6,000 catch-up have to be elective, or can it be non-elective?

I feel your pain, Austin. Fringe benefits may be excluded using a 414(s) safe harbor. It is impossible to believe that the IRS had salary for time not worked (vacation pay or employer-paid sick pay) in mind when they used the term "fringe benefit" in that safe harbor. If I were being paid to research this thoroughly I bet I could find at least a hint of this, but nothing comes to mind off the cuff.

I'd read the plan documents first just to make sure no "plan assets" were accidentally created, but assuming that is not the case I can't think of any reason why the employer couldn't do anything it wishes with those funds.

I know what ERISA and the IRC say, but I would find it a bit surprising if a QDRO dividing benefits was actually entered before the divorce. And, the fact that the spouses reconciled and now wish to undo the QDRO suggests that this was not the type of special case to which you refer.

The Judge entered a QDRO before the parties were divorced? Or, did they divorce, get a QDRO, then reconcile?

Is this a final exam or bar exam question, or is this a real issue a client is paying you to think about?

MoJo, if you assume that the regulation is an accurate interpretation of the law which a court will respect as such, technically what the safe harbor rule says is that if the money is deposited within the 7 days, then it doesn't become plan assets until the day it is actually deposited; therefore, there can be no pt or even a fiduciary breach because you didn't deposit it faster, even if you clearly could have deposited it faster. And, while there is no way to predict what a judge might do, and I agree with you about the ERISA plaintiffs' bar, these are small plans so, almost by definition, there aren't deep pockets here.

I thought the 7 day safe harbor was in fact a safe harbor, for plans eligible for it, even if could be proven that they could make the deposit in 1 day. No?

As pointed out there could be other fiduciary breach risks associated with not allocating promptly, but the pt exposure ends when the employee money is handed over to the plan trustee.

Someone who has an interest in the ESOP's tax-qualified status may give the plan sponsor a hard time without a current DL, e.g., the trustee, a lender, a potential acquirer, etc. Also, isn't it necessary for certain EPCRS purposes if you should ever need EPCRS?