Belgarath

Interesting question, and I'll be eager to hear what the ERISA attorneys on these boards say. IMHO, it is not reasonable for a divorce situation to hold up a plan termination, but I don't know how this is resolved. Seems odd that I've never yet seen this situation, but I haven't.

Really, I implore all of you to stay safe, even though it may mean skipping traditional celebrations. We lost our best friend to Covid earlier this year - he and his wife didn't observe standard precautions, had a couple of big family gatherings, and both got Covid and he paid the ultimate price. Please don't let this happen in your circle. Be thankful for what you have, and don't take chances! I'll get off my soapbox now. Best wishes to everyone.

True, true, good point.

The 8822-B issue has been discussed somewhat on these boards. If you do a search, you'll find several threads. Here's just one of them, fyi https://benefitslink.com/boards/index.php?/topic/65352-form-8822-b-poll/&tab=comments#comment-299820

Is it necessary to restate? If they WANT to, can't the new entity just assume the sponsorship/assets/liabilities of the existing plan?

I recall, in the dim and distant past, that the IRS had at least a potential issue if a profit sharing/401(k) plan was established solely for the purpose of rolling IRA money into it to take a participant loan. I know at the time, the solution was to establish a 0% Money Purchase plan. Or, to make at least token contributions now and then. Has anyone heard anything further these days re the IRS opinion/stance on this issue, if any?

No, that's fine. Once they take the distribution, they can do anything they want with it.

As in $1.99. ?

Actually, I was talking about the above. According to your original post, Betty performs "management services for all of Bob's businesses." BTW - it hasn't been directly discussed, but is this in a community property state? If so, that would also generally blow the "non-involvement" clause.

Go back to CB's discussion of the "spousal noninvolvement" clause. From the sounds of your posts, VERY unlikely that they can satisfy these requirements. I'm assuming you are not an attorney? Tell them what you think, but also tell them that you are not permitted to give them specific legal advice, and they should seek ERISA counsel for the determination. I find that in most (but not all) such situations, clients are completely unwilling to pay for legal advice, and they drop the issue.

Y'know, I'm not certain I quite agree with that on a blanket basis. (But I agree in the apparent context of BG's question.) I'll grant you that MOST plans are written that way, but I believe a plan can be written such that if you have reached NRA, a distribution can be forced. From memory, 411(a)(?11??) but I'd have to look. Our plans allow postponement of distribution.

Well, I guess technically it is a group under common control, since Betty is a sole prop (IRC 414(c)) but the effect is the same. All 4 are considered one employer, and I agree, Betty can not set up a Simple-IRA just for Betty and Bob.

That's what I'm doing...

Thanks Peter. I've been in this business a long time, and have never even heard of this issue.

Suppose an employer has a plan with 100 otherwise eligible employees, including 10 H2A employees. Can the employer exclude the H-2A employees as a class (will easily pass coverage testing). I'm seeing conflicting information on this - some indicating that under IRCA you cannot exclude them as a class, other information indicating you can. Anyone have any experience with this issue?

What he said! Agree completely.

I'm struggling a bit with the proper use of the VCP submission forms. The 14568-B doesn't seem to quite "fit" a 403(b) plan that had a written plan document, yet failed to restate by the extended deadline this summer. https://www.irs.gov/pub/irs-pdf/f14568b.pdf Has anyone else submitted one of these yet, and if so, with any results? It appears to me that you'd have to check Section I(A) last option (other). "B" does not appear to apply, and Section II(B) doesn't appear to apply either. Looks like you'd check the Section 1(A), describe them as a nonamender, and include signed updated docs and any Amendments. Am I missing something obvious here? Thanks.

Also, be careful if you are using pre-approved plan. You may or may not be able to reconcile this language with the allowable options in the document.

Thanks to you both for the input. Very helpful. As I said, I have typically used payroll date (which I know is technically incorrect) because when the interest difference is literally a few cents to a few dollars, it hardly seems worth taking the time to have to look at the calendar to determine (x) business days by looking at weekends and holidays and subtracting those days for a bunch of deposits. Seems to me everyone is better served if the participants get a cumulative deposit of some amount, rather than paying us a few extra bucks to have to take the time to count weekend days and holidays and apply it to each late deposit.

I understand your point, although I think a pretty reasonable argument can be made that the 7th day should still be acceptable as a "loss date." I'll be interested to see how other folks handle these situations, as I'm not sure it is necessarily crystal clear. I do think that using an earlier "loss date" than the 7th day cannot be faulted in the event of a DOL audit, so your method seems essentially unassailable in terms of satisfying compliance requirements.

Austin - as far as I know, a for-profit and a tax exempt entity CAN be a CG. Or I guess it is "Common Control" but has the same effect. See, for example, 1.414(c)-5. But assuming they are not, I'm not aware of any reason they couldn't be a participating employer as a MEP, if your document allows it. This is just off the cuff, from memory, so caveat emptor. I'd definitely have to spend some time doing some research before I'd venture a solid opinion on this.

Thank you. Now another question re technical perfection and administrative convenience. When you have a bunch of entries, and piddling little amounts where the total interest correction for late deposits adds up to about 11 dollars. Do you, for each entry, actually get out the calendar and count 7 business days (taking into account weekends and holidays) and use that 7th day for your loss date, or do you just use the payroll date, and the employer pays an extra 17 cents in interest? I can't judge anyone on this, because I frankly have done the latter, but I'm wondering if I'm the only one...

Anyone have a pipeline to the DOL? The calculator is great, but it would be GREAT if they could allow you to input the final payment date just once. Frequently there are a gazillion entries that have the same final payment date, and having to enter it each time is a PIA. Or is there some way to do it already that I don't know about? If so, I'd greatly appreciate someone instructing me in the error of my ways!

Here's the thread. https://benefitslink.com/boards/index.php?/topic/66365-owner-comp-mid-year-plan-termination/

Got it. Thank you for the input.