Belgarath

FWIW, I don't read it as allowing the SCP fix for a significant error. If you take it in a vacuum, yes. But given the language/info in earlier sections of the RP, and the chart as you mentioned, it seems like pushing a tenuous position.

Assuming the document is drafted appropriately (and this is in at least some IRS pre-approved documents) you can exclude "part time" or "temporary" or "seasonal" employees, BUT, if any such employee actually completes 1 YOS (1,000 hours) they will no longer be a member of such excluded class.

Hi Bird - it just occurred to me - take a look at Appendix B, .01(2). Do you read that as allowing a SCP fix for the SEP? P.S. - also Appendix A, .01 - similar language.

I think (and I say think, cause I'm not sure - the SECURE Act confused this stuff, and I've been fortunate enough not to have a real case yet) that there is no RMD. Assuming the spouse is the 100% beneficiary, I believe the surviving spouse can roll over the entire amount, and does not have to take RMD's until 12/31 of the year the participant would have attained age 72, even though in this case that means no RMD's until the surviving spouse is about 87. Seems like a crazy result, but that's my "memory" on this. But, as I said, that's based on memory and I haven't specifically researched it. Probably wrong...Good luck!

I assume you mean SCP for significant failure? Yes, you are correct - let me get some bearnaise sauce to improve the taste of the crow I must eat. Odd that a SEP is carved out on SCP for significant failures.

Bird - what's the timeframe on this? A significant operational failure can be corrected by the end of the third plan year following the plan year for which the failure occurred. I agree, I don't see any basis for a correction other than making up the contribution, with earnings, at the same percentage level, although if it does go to VCP, you could try a fix without giving anything to the partner - don't know if that would fly. Any possibility that this wasn't initially a controlled group, but became one, so that transition rules might apply?

Hi Luke - yes, this is LTD.

Got it. Thanks!

We administer a 401(k) where the ESOP is administered elsewhere. Please don't waste any time on this if you don't know off the top of your head. This is an academic question only, as it is the ESOP's problem (if there is any problem) but I'm curious, as I had to look through the ESOP document for some items. I'll spare you the details, (involved and confusing) but for 409(p) testing (this is an S-corp) the ESOP document refers to Code sections that don't exist, etc. so I'm unable to verify this via the Code sections referenced in the document, but here's the gist: The plan document refers to "disqualified persons" as including family members. "Family members" include, for these purposes, "a brother or sister of the individual or the individual's spouse and any lineal descendant of the brother or sister." So, this creates attribution between siblings. Is this correct? Different from "normal" 318 attribution rules.

Thanks.

I have no confirmation yet, but here's what has been communicated to me. I've asked for additional details. Employee is out on disability. Has not terminated employment. Employer pays disability premiums, disability payments are made to the employer, who in turn pays them to the disabled employee. This would normally be considered compensation for plan purposes, as the plan uses W-2 and does not exclude disability payments. So far, so good. What I'm being told is that the insurance company is issuing the W-2. Do (some) insurance companies perhaps do this as a "service" and issue a W-2 in the name of the employer, using the employer's id #? Anyone have experience with such a situation?

The ERISA 204(h) Notice you are referring to does not apply to profit sharing plans - only to pension plans. See ERISA 204(8)(B) and IRC 4980F(f)(2).

The initial response by Nate S is one of my favorites. Put it in the Hall of Fame.

Fascinating.

Yes, and be careful if there is "prior pension" money in the plan. For example, if this plan has been around a while, and was originally a Money Purchase plan that was amended and restated to a Profit Sharing plan, you could have one bucket of money subject to QJSA, and the rest not subject to QJSA. Still a fair number of those out there, although the recordkeeping/accounting is sometimes poor or nonexistent.

I was wondering - not that it matters, 'cause I only really care about results in all of this, not the "why" - but trying to give the IRS the benefit of the doubt - maybe something in the statute doesn't allow their regulatory authority to extend those 2202 provision amendment deadlines? That's a legal question above my pay grade. Otherwise, however, it certainly seems an odd decision.

Amen to that!!

It's interesting. We had a lot of clients who basically said, "If someone asks us to do it, we'll allow it" (amend plan as necessary) but very, very few participants actually requested the employer to allow Covid distribution/loan options. We had to amend a few plans to even allow loans at all, and then no one took a Covid loan. No matter how you slice it, it'll be a PIA, but it is a big help not to also have to worry about SECURE amendment right now just for sheer volume, although truthfully, it seems like the SECURE "defaults" will be probably easier and more standardized. However, SECURE 2.0 or whatever, if passed, will likely be a %$$# show.

Yeah, Peter, we also saw some of this, or something similar. “If we do not receive your instruction by {date}, you instruct us to perform our services assuming your plan adds or omits provisions as stated by this email’s defaults.” Question for discussion: Suppose a default amendment for CARES is done at the document sponsor level allowing pretty much everything, but suspending RMD's unless requested. But in fact, let's say loan payment suspensions weren't allowed, or perhaps the plan doesn't even allow loans. Or Coronavirus distributions were never allowed, in spite of what the default amendment says. What are the ramifications? The participants were never notified of these supposedly available provisions (that the amendment says were available) - is the entire amendment (including the RMD suspension) negated? Are there specific penalties? There's no nondiscrimination/BRF issues, since these provisions were not available for HCE's or anyone else. Operational error with plan not operating according to its terms? I'm certainly not advocating such an approach! Just curious. It would not surprise me to see some very strange things with these amendments.

Deleted - inadvertent duplicate

Another TPA has asserted that this is possible. I think this is dead wrong, and I can find no support for such a position. However, I'm always willing to question myself. Does anyone believe this is possible?

I think I got overly excited a bit too soon. I was just looking at the brief summary. When actually reading the Notice, it appears that the CARES extension applies only to Section 2203, which is the RMD piece. Doesn't apply to 2202, which is the distribution/loan provisions. So it appears that plans must still be amended by 12/31/2022 for this piece? Am I reading this correctly? Rather obnoxious if this piece isn't extended as well... Hopefully I'm reading it wrong!

Perhaps I should know this, but I don't. Suppose such a bond reached its maturity date in 2020. Suppose in 2020 the municipality is insolvent, and can't pay. Now fast-forward to 2022. Now the municipality is solvent again. Do bonds maturing in 2022 get full payment, and 2020 bondholders are out of luck or only receive a portion of what is due? Or do the 2020 bondholders have claims that get paid first? Etc., etc.? Maybe there are no consistent "rules" on this anyway? Just curious. One of the few virtues of not having a lot of investments is that you don't have to worry about it...

Agreed. But having just completed restatements, the thought of another large amendment project to be completed by 12/31 was not an enjoyable prospect. That, coupled with the possibility of yet more amendments for SECURE 2.0 (or whatever is passed, if anything), makes this reprieve all the sweeter. Possible if SECURE 2.0 or something similar passes, we can roll the whole thing into one project, rather than two separate ones. Haven't considered ramifications yet, as I just found out about this at 5:00 AM... As an aside, there are employers who don't know what they did. With all the Covid confusion in 2020 particularly, and the fact that some recordkeepers took it upon themselves to offer some of the Covid features, coupled with the fact that some clients are less than stellar about providing information to us, it is sometimes difficult to determine who did what and on what date. Might make the determination of the "best" default amendment somewhat challenging.

"and if I claim to be a wise man, well, it surely means that I don't know" - Kansas. Showing my age here...