Nate X

To correct my post, the Relius document does give a choice to exclude or include LTPT employees in automatic enrollment. So it appears the employees who can be treated differently for automatic enrollment are (1) LTPT employees and (2) disaggregated employees. This is based on the automatic enrollment uniformity requirement.

We use the Relius document and it does indicate that LTPT employees are auto enrolled.

From my experience it is too late unless the penalty is due to an error (i.e. the client filed under the wrong EIN). The client should have received CP403 and CP406 notices well in advance of the CP283 penalty. I believe the fact that the CP283 notice is associated with 5500EZ is just semantics as EZs are filed with the IRS and 5500 & 5500SF are filed with the EBSA. Both agencies can apply a penalty for a late filer of Form 5500 and 5500SF. Also see Q4 & Q9 here: https://www.irs.gov/retirement-plans/form-5500-ez-delinquent-filing-penalty-relief-frequently-asked-questions

Following and also adding that we are seeing approval and denials for Form 5558s that were mailed in the same envelope.

Does anyone have experience filing Form 5500 without a signed SB? Could you let me know what happen in your situation (i.e. penalties paid, Form rejected/accepted). Thanks in advance.

See Pages 24 - 28 https://lrus.wolterskluwer.com/media/2607/tag_ppt_presentation_for_ftw_conferences_2018_wright.pdf EPCRS states you would correct the missed deferral opportunity based on the employees group. So if the employee is a NHCE, then his/her missed deferral opportunity would not be compared to the owner's deferral percentage. There's no guidance that says you can use 3%, but it certainly seems more prudent than zero.

Circling back to my original question: Does anyone see an issue with amending the plan to only grandfather those with a balance?

FYI: Rev. Proc. 2019-19 supersedes Rev. Proc. 2018-52 https://www.irs.gov/pub/irs-drop/rp-19-19.pdf Keep in mind that this correction program is considered as guidance. If you were not notified until after the end of this year when it was too late to make up the missed deposit, then Appendix A.5(4) would apply (50%). Since you were able to "make up" (at least in part) of the amount missed on you last pay check, then I would think that Appendix A.5(9)(a). As long as they gave you proper notice, no corrective contribution would be due. If your pay was not high enough on your last paycheck to make up the entire amount, then I would think that Appendix A.5(4) would apply that amount you couldn't make up. Since there is not straight answer on this, I would guess that they either (1) chose to meet in the middle of 5(4) or 5(9)(a) at 25%, or (2) chose to apply 5(9)(b) instead.

We are amending a plan to increase the eligibility from 3 months to a year of service. For employees who never completed a year of service but were previously eligible, they will only be allowed to continue as a participant if they have a balance in the plan on the amendment effective date. Our document does not restrict us from kicking participants out of the plan due to a plan amendment. Does anyone see an issue with amending the plan to only grandfather those with a balance?

I agree with your assessment, though I think it could be argued either way. It appears that the only real difference is you would have to add an explanation. So if you wanted to be conservative, you could check yes and start the explanation with the fact that the person in question is only a 10% owner though attribution.

Here is the way I understand the facts: The loan was issued in 2014. Payments were held every paycheck until January of this year (2017), but MM stopped receiving them sometime in 2014, and issued a 1099-R for that same year because they saw the loan was in default. Your husband is still employed with the company that offers this retirement plan. Assuming that is what happened, MM would have been required to keep the loan on their records in case your husband wanted to pay back the loan. Assuming the 1099-R issued in 2014 was not a mistake and he did want to pay back the loan, the loan payments would be after-tax deposits and would not be taxable when he later took a distribution. Paying back the loan in this case is not required. Now go back and assume the 1099-R issued in 2014 was a mistake and you want MM to correct this, then you would be to amend your tax return for 2014 to remove the 1099-R. There's different ways MM could choose to correct this, but it looks like the way they chose will cost you $900 today. If you add up all those non-deposited checks then I'm guessing it's not much more than that.

General partners Box 14A income is reduced by Section179 expense deduction claimed, unreimbursed partnership expenses claimed, and depletion claimed on oil and gas properties. It is my understanding that Section 179 expense has a deduction limit, so it's not always safe to lift the amount off of Box 12.

My helmet is on too tight. An active participant has a $100,000 balance in the plan. $25,000 is in voluntary after-tax with $20,000 basis. The rest of the money is pre-tax. Based on the plan document and regulations, the participant is only eligible to take a distribution from the voluntary after-tax source. Can the participant rollover the $25,000 to an IRA(s) with a basis of $20,000 based on this... Can I roll over just the after-tax amounts in my retirement plan to a Roth IRA and leave the remainder in the plan? No, you can’t take a distribution of only the after-tax amounts and leave the rest in the plan. Any partial distribution from the plan must include some of the pretax amounts. Notice 2014-54 doesn’t change the requirement that each plan distribution must include a proportional share of the pretax and after-tax amounts in the account. To roll over all of your after-tax contributions to a Roth IRA, you could take a full distribution (all pretax and after-tax amounts), and directly roll over: pretax amounts to a traditional IRA or another eligible retirement plan, and after-tax amounts to a Roth IRA.

Thank you. That is very helpful.

A participant is no longer living in the U.S. wants to take a distribution (The participant is living in Mexico). The plan has spousal waiver and consent requirements. Does a participant need to have the notary public done by a U.S. Consulate if done outside the U.S.?