Belgarath

Lou - just for grins, I'd like to point out that there is what to me is an unexpectedly high level of noncompliance out there on SIMPLE-IRA plans. (I don't see this problem, generally, on SEP plans) Lots of VCP filings on the SIMPLE's. I suspect many, if not most of us in the TPA world have seen a lot of noncompliance on the brokerage house one person off the shelf plans. To be fair, we probably only get brought in on the bad ones, and don't generally see the good ones, so perhaps my perceptions are skewed. You know, there are lies, damn lies, and statistics... Here's the thing. On these plans, CAN someone do it on their own? Absolutely. Are the odds of doing it right, with no problems, for no money with no professional help, in their favor? Best of luck, because they may need it. Anyway, it's a big step off my soapbox, so I'm going to climb down now.

Wow. Well, I'll just say that in my opinion, anyone for whom $300.00 is too much to pay for qualified plan administration should NOT, NOT, NOT have a qualified plan. I've been paid a lot of money by these "do it yourself" plans when filing under VCP, etc., to correct the problems. I'm also curious - how do YOU get paid on all of this? I presume you are not a charitable organization. Are you a broker, receiving commissions, or a CPA? However, that's really none of my business, so I'm not offended if you decline to answer that. Anyway, if you intend to go down this road, I wish you the best of luck. I think others here have already given you sufficient advice, and if you proceed, do it with open eyes (because the clients will most definitely blame you when something goes wrong) and make sure your E&O is paid up.

A good example of why, when asked, "How long should we keep plan records?" we always tell them FOREVER!

Thanks!

Did the IRS give ANY indication of when document approval might be expected? I'd sure love to be able to start planning next year's work projects....

You might commonly hear this referred to as the "successor plan" rule. Just fyi if you are internet searching or having a discussion.

Assuming it is a 5305-SEP, I'm going to go out on a limb and say yes. My only basis for this statement is that page 2 of the SEP agreement, item #3 under "Completing the agreement" provides for amending the SEP document, with a copy of the amendment and a statement of the effects furnished to the participant within 30 days.

First - I am distinctly NOT an expert in cafeteria plans, but I'm trying to increase my knowledge (bit by bit) so this post is very interesting. The citation provided by Ivena goes on, in (ii), to further specify that the election change must also satisfy the consistency requirements in ©(3) - which I've pasted in below. I find ©(3)(i) to be a little gray. When it refers to the change in status as one that increases or decreases the number of family members or dependents who "may" benefit from coverage under the plan - I suppose you could read that either way. But since the number of dependents who "may" benefit does, in fact, increase (because there is one more dependent) then it seems reasonable to interpret this as satisfying the consistency requirement. But, I think you could also read it that since the number of dependents was already unlimited, then this unlimited number isn't "increased" by a birth or adoption. People here who are experienced in this area will probably know - I'd like to think that the IRS would take a reasonably lenient stance on this, and in fact allow the change when there is a birth, but I really don't know. (3) Consistency rule - (i) Application to accident or health coverage and group-term life insurance. An election change satisfies the requirements of this paragraph ©(3) with respect to accident or health coverage or group-term life insurance only if the election change is on account of and corresponds with a change in status that affects eligibility for coverage under an employer's plan. A change in status that affects eligibility under an employer's plan includes a change in status that results in an increase or decrease in the number of an employee's family members or dependents who may benefit from coverage under the plan.

Our clients would fire us if we attempted to charge them anything for this. And honestly, I feel like this is why they hire us. Rightly or wrongly, we would just pay the penalty in this situation. Not trying to be sanctimonious, that's just how we would handle it.

Remembering that free advice is worth what you pay for it... Swallow hard, and file under DFVCP program and pay the penalty. No more worry, stress, uncertainty, or unproductive and non-billable time spent. Others may think I'm crazy, and have an entirely different opinion. Good luck.

If you are filing under DFVCP, you lose the benefit of the extension. See question #4 on attached link. https://www.dol.gov/sites/default/files/ebsa/about-ebsa/our-activities/resource-center/faqs/faq-dfvc.pdf

Actually, I was in a bit of a hurry, and I think I gave you bad information on the safe harbor piece. The deadline for the safe harbor piece is indeed 12/31/2016, to preserve the safe harbor status of the plan. However, for 415 purposes, since made after the 415 deadline discussed earlier, it is ALLOCATED for 2016, same as the profit sharing. Still only one deadline for 415 purposes. There are some limited exceptions to the otherwise applicable 415 deadlines, but this isn't one of them. Prior to the 2007 415 regulations, I seem to recall that the 12/31 deadline was used for 415 purposes as well (which frankly made sense) but the final 415 regulations didn't provides this carve out. Sorry about that.

If it is truly a "profit sharing" contribution, then it is as discussed previously. If it is a safe harbor nonelective, then I agree with the TPA - the initial reference is actually 1.401(k)-3(h)(1). If you read this, it will refer you back to 1.401(k)(2), and you will find you end up, for purposes of this question, with the deadline referenced under the section cited by the TPA. If you have both, then you have two separate deadlines - one for each piece.

Only an employer can terminate an employer-sponsored plan. An employee cannot terminate the plan. Is it in fact a 457 plan, or is it a 403(b)? Regardless, I assume you mean you want to receive a current distribution while still employed, and your question should first be directed to your plan administrator/benefits office to see if certain in-service/hardship/loan provisions apply. As a general rule, you can't just withdraw your funds at age 52 while still employed.

Well, let's back up for a moment. Your original post specified a "profit sharing" contribution. Are we really talking about a "profit sharing" contribution, or a safe harbor nonelective contribution?

Personally, I would not correct it going forward, and just let sleeping dogs lie. I'd keep on keeping on...

I assume you mean for 415 purposes, as there is no deduction? As per Treasury Regulation 1.415©-1(b)(6), there is a deadline for employer contributions for those contributions to be considered “allocated” for a given limitation year. For tax-exempt entities, there is a special deadline, which is no later than the 15th day of the 10th calendar month following the end of the calendar or fiscal year in which the particular limitation year ends. Assuming they are on a calendar fiscal/limitation year, this means that any contribution after October 15th of 2016, would have to be treated, for 415 purposes, as being allocated in whatever limitation year actually contributed.

An interesting short article on this subject. http://www.businessofbenefits.com/2016/07/articles/uncategorized/403b-policy-loans-continued-form-5500-reporting-problem/

Why not just ask THEM to provide citations for their assertions?

Nope. Plan year and fiscal year have to match, as per 5500 instructions.

The SIMPLE Form instructions.

Personally, I doubt that. I expect it is just an error. Doesn't make it any less of a giant PIA...

We have not (yet). TGIF!!

Good luck, Tom. If the worst that happens is the power going out, I'm sure you will consider yourselves very fortunate.

Hey - just wanted to say that if any of you are in the path, or on the fringes, best of luck. Not much to do except hope for the best, I guess.