Belgarath

Since I have virtually no information to go on, this question may not make any sense. A governmental employer who has a "deferred compensation" plan - I'm guessing a 457(b)??? is apparently either changing or terminating the plan, whatever the plan is. We got a call out of the blue asking how they notify the IRS that the TIN will be "inactive." I don't work with governmental 457 plans, or any other governmental "deferred compensation" plans for that matter, if there are such things. Does anyone have any idea if there is a required notification to the IRS of such a TIN becoming inactive? I believe if a corporation terminates/dissolves there is a notification process involving the corporate EIN, but that's a different matter. Thanks in advance, if you know anything about this.

Thank you both. That's what I was coming up with as well, and yet I felt foolish because I wasn't finding the "black and white" either.

I'm embarrassed to even be asking this question, but I've managed to twist myself around on a very simple question. Profit sharing plan, forfeitures can pay expenses or be used to reduce employer's contribution. Forfeitures are NOT reallocated. Participant terminates in 2020, receives full distribution, so forfeiture occurs during 2020, for the 2020 plan year. Can this forfeiture be used to reduce the 2019 plan year profit sharing contribution deposit that is made in 2020? Looking out at the snow blowing by the window is freezing my brain.

I'll second Dave's comment. I was extremely fortunate to have an outstanding mentor, who was generous with his time and expertise above and beyond the call of duty. I doubt that I'd have stayed in this business if it weren't for him.

Just be very careful you don't forget your OWN anniversary, or you might find yourself reading up on QDRO's...?

"I know I am getting sick of my cat climbing on the keyboard and pressing random keys." Too funny. I was in the midst of sending my boss an e-mail when the cat tromped across the keyboard, and I sent an e-mail of mostly gibberish. Probably a new acronym is about to be invented, like PIE (pet induced error) or something like that.

Ah. Thanks Lois. I hadn't seen this yet. Slipped under my radar, somehow. These boards are great!!

Unless there has been a recent change that I missed, this deadline was NOT extended.

Hi Tom! We miss you! I hope you and family/friends are happy and (especially) healthy, and that you are enjoying your retirement. I get the feeling that many of us on these boards are "old timers" who will be retiring in the next few years, so if retirement stinks, please don't burst my bubble by saying so... Best wishes.

Following up on this now that the dust has settled a LITTLE bit - at this point, what happens if employees are furloughed, and have a health FSA. Or better yet, they were working full-time, and have been dropped to 1 day per week. By any reasonable standard, you'd think that this is an allowable "change in status" that would allow them to make a new election, but I'm not sure, in the absence of additional guidance, that it qualifies. Seems overly harsh to have to continue to withhold the FSA funds when your income has just dropped by 80%. I know relief for this any many other situations is being discussed, but I haven't heard anything concrete. Thoughts?

That's up to you. I would just tell them that yes, payments for qualifying individuals will be delayed under the CARES Act; yes, interest will accrue for the period that the loan payments are delayed; and that additional IRS guidance is necessary (and expected) to determine exactly how the interest/reamortization schedule will be recalculated once repayments must begin.

Good grief! Since the practical effects won't take place for quite some time, I'm not going to take a lot of time, at this point, worrying about those details. I'm quite sure the IRS will address this in the months to come, and I'll wait to see what they say. If there's no guidance forthcoming within a reasonable amount of time, then I'll worry!

So the legislation doesn't count a participant as an "eligible" participant if the participant's SPOUSE gets laid off due to Covid-related employer financial issues at the spouse's employer. I'm guessing the odds are that Treasury will add this situation to the list of "other factors" to be determined? Anyone heard anything on this? I'd rather expect that there will unfortunately be a huge number of such situations.

I think under 2520.104b-3(a), the REQUIREMENT is no later than 210 days AFTER the close of the Plan Year IN WHICH the modification or change was adopted. Now, I've seen some interpretations that the change isn't "adopted" until the plan is formally amended, which in situations like this means potentially a long way into the future. So I think at the very least, you don't need to do it prior to allowing these options.

From TAG - any thoughts? It would be permissible to allow coronavirus‐related distributions from a pension plan, however, in order for a qualified individual to be eligible to receive such a distribution, they would either have to have terminated employment or attained age 59 ½. The CARES Act did not provide an exception to the age 59 ½ age requirement under IRC §401(a)(36) for in‐service distributions from pension plans.

No problem. A tpa can perform testing based upon either assumed current year census/salary/deferral data, or utilizing prior year data, or a combination - whatever the employer wants. And the results are only as accurate as the data provided or assumed. Lots of times certain things are known - for example, top heavy status - plan is already top heavy but for being "deemed" not top heavy under the safe harbor rules. ADP/ACP tests in prior year would have failed miserably but for safe harbor. Etc. - so a full projection may not be really necessary for the TPA to give an employer a good idea of results of amending out of safe harbor.

The real issue here is whether the employer is incorrectly (or correctly) determining whether or not thery are "employees." That's an entirely separate issue,and there has been lots of litigation on this issue But the answer to THIS employer, based on their determination and instruction and information given to you, is what the previous posters have already told you - no, they can't participate in the plan. But hey, that's just my humble opinion.

I guess this is why you get paid the big bucks! This is a tough situation. I'd put this to the client and make it the client's decision: 1. Based on current regulations, it is my opinion that you should treat this as a partial plan termination. This is a "safe" approach. 2. If you wish to take a more aggressive approach, you could NOT consider it a partial plan termination, and hope for some IRS guidance/relief that will allow you to have the result you want. 3. This is your decision. I'm not allowed to give you specific legal advice. Good luck!

Thanks. That's what I was thinking (my original thought was that a "regular" amendment would be required first) but after thinking about it a bit, I realized this didn't make any sense.

If a plan does not ALREADY allow for loans, or hardship/in-service for that matter, must the plan amend to allow loans by 12/31/2020, and then subsequently (or concurrently) add the Coronavirus provisions, or can the entire loan provision have the extend deadline of 12/31/2022?

A good point!

Hi Peter - I certainly believe that a plan sponsor could say "no" - I haven't even considered yet whether if they say "yes" they can subsequently say no for accrued benefit - is this a 411(d)(6) protected benefit? I haven't considered or looked into that aspect.

Also, it has to be a "Qualified individual." It does NOT apply to everyone who just feels like delaying a loan payment.

I haven't formulated an opinion on that one yet. But the reality is that many of the recordkeeping platforms are going to force a decision one way or the other. Their mode of operation seems to be that, "We're going to allow this UNLESS you affirmatively elect otherwise."

Hey Bird - that was my initial thought as well, but while the employer could be completely unaffected, a participant might easily have a spouse, for example, who has been laid off, whatever. So I've readjusted my thinking a bit.