Belgarath

It has already started!! Just got the first panic call from someone who ignored the June 30 deadline. So, anyone have any "pipeline" to the IRS re some sort of special offer for reduced VCP filing fee for a nonamender if they submit within, say, the next year or whatever, similar to what they did for PPA nonamenders?

Ignoring any special Covid rules for a Covid distribution to "Qualified Individuals" If it is a "Qualified Loan Offset" (and you can look at the 1099-R instructions for a definition) then it can be rolled over as late as the tax filing due date (including extensions) for the year of the offset.

I would feel very comfortable relying on the clear intent and spirit of the guidance and I'd allow it. Hard to imaging the IRS trying to argue this point, given the circumstances. On another tangent, In "normal" circumstances I'd imagine that this direct trustee-to-trustee requirement is sometimes missed, and the payment is made to the participant and the 60-day period is used to roll into another plan. Anyone seen this, and if so, can it even be corrected or are you stuck after the 60 days has passed?

Thanks. Austin, I like this - simple and practical.

Any reason why the SMM can't function as the Notice, as long as it is given at least 30 days in advance, and the procedures for changing a deferral election are included?

Not Covid related. Just eliminating a small unit/division, many of whom are HCE's, and the real goal here is to benefit the HCE's. They have never done this before when eliminating employees...

Were the deferral elections completed for the correct plans, and employer then just sent funds to the incorrect plans? Or were they given deferral elections for the improper plans? If the former, I'd consider it a mistake of fact. If the latter, then I'm not so sure, I've had no direct experience with that specific situation. Under the facts and circumstances, is this either insignificant or significant within the SCP period? If you have to (or choose to) go through VCP, I'd certainly try for a reasonable fix - in that respect, I've found the IRS to generally be very reasonable. I personally wouldn't get too hung up on the fix-it guides - they are handy, but by no means the only allowable solutions. Possibly some re-do of ADP/ACP testing might be necessary - results could be very different. I'll be interested to see if anyone has direct experience with an identical situation - maybe it is more common than I think.

Thanks Mike, this helps. Yeah, the smell test on this seems bad - I was just wondering if there was a more definitive item I was missing.

Wow, suffering from terminal brain cramp. Suppose an employer has a Money Purchase plan with standard last day/1,000 hour requirement. Employer is terminating a group of employees, many of who are HCE's. Employer wants to amend the plan to waive the 1,000 hour/last day requirement for THIS GROUP OF EMPLOYEES ONLY. Contribution level will be the same as for everyone else. This shouldn't inherently cause a coverage testing problem, right? They will just all be included in the coverage test, and the plan will pass or fail as usual. But it'll have to be tested for nondiscrimination? Something is bothering me here, but I can't put my finger on the correct citation. Maybe what's bothering me is 1.401(a)(4)-2(b)(4)(iii). This amendment would take you out of design-based safe harbor status, and then you'd have to general test?

AMEN!!!

Thanks all. We'll probably never get such a request from a client, but it is good to keep this in the back of the head if it ever does occur.

Thanks Bill. I beg your pardon, I should have included a little more detail re our conversation. Your specific concern was discussed, and one possible option was to amend retroactively to the beginning of the year. The other was to have the amendment prospective, but still do a "true up" on deferrals/compensation up to the effective date of the amendment (say, August 1, for example). Again, this was just theoretical conversation (we TPA's sure do have some nerdy conversations) so please don't waste any time, but interested in any thoughts you might care to toss out.

Please don't waste any research time on this, as it is an academic question that came up tangentially during a general conversation. SH match plan calculates SH match per plan year. Can it be amended mid-year to change to per payroll calculation/deposit?

A long time ago, we switched from Relius to FTW JUST for 5500 forms. I find the FTW 5500 system very easy to use. We did some fairly extensive testing on the document system, and determined that we preferred the Relius document system. Of course, to a certain extent, there's a lot of inertia involved; switching over to new documents is a challenging project, and the error ratio usually gets higher until everyone is comfortable with a new document/system, which often takes quite a long time. I can't comment on the Datair SYSTEM, but I just don't like their documents. I think they are very confusing - I always hate a takeover on a Datair plan.

Yeah, that was me. I was out late last week, and posted my question before I caught up on reading posts from Thursday and Friday.

I know Larry and some others here do a lot of pooled plans, and I'm just curious to hear your opinions (if you have any at this early stage) of this suit: [Lipshires v. Behan Bros. Inc. Retirement Plan, No. 20-252 (D.R.I. complaint filed Jun. 8, 2020)]

You may find this helpful. P.S. - this doesn't get into the detail about reasonable delays due to illiquid assets, or time beyond when d-letter is issued as Effen mentions above, etc. https://www.irs.gov/retirement-plans/plan-termination-failure-to-timely-distribute-assets

Short answer, yes. Could get pretty complicated depending upon what you are ultimately doing - testing on an allocations basis, or cross testing, possible gateway, top heavy issues, etc. - you might be restructuring, whatever. Could pass easily, could be a nightmare...

And probably right! I remember when we first bought our house, it had a mother-in-law apartment attached, and we decided to rent it to a tenant (about 30 years ago, and we got out of THAT business after one year) our attorney told us that the best leases are written by landlords who have gotten shafted. The burned hand teaches best!

"I wonder if it can be charged that requiring a notarization on non-required item could be considered interference with the participant's ERISA rights?" Hi Larry - I thought of that aspect as well, but I think it is a real stretch. Maybe one of the ERISA lawyers will chime in, but I think a Fidicuary could make a pretty strong argument that such a policy is prudent in fulfilling one's fiduciary obligations under ERISA in these days of rampant identity theft.

I believe that a plan CAN, if the sponsor so chooses, require a notarization for other items - a regular withdrawal, for example, that doesn't require a spousal consent. I speculate that such provisions might become more common in an attempt to reduce fraud.

CB - while the 2-year period you refer to is required for a Plan Document Failure under SCP, I think this "insignificant error" is eligible for correction under SCP without the restriction of the 2-year period? See RP 2019-19, Sections 2.02 and 4.05(2)(a), as well as Appendix B.

I was not (and won't on these boards, not the place for it) opining on right or wrong. Merely observing that since we have a bitterly divided House and Senate controlled by different parties, not to mention the Executive branch issues, that for ANY legislation to pass it must, by definition, be bipartisan. And the spirit of cooperation ain't strong.

June of an election year, so bipartisan compromise may be in short supply...

Ah, so that they suffer "informational injury" or some such drivel?