Belgarath

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.

Is a Coronavirus distribution allowable from a MP plan if a participant has not otherwise satisfied the normal distribution requirements? Although 2202(a)(4)(c), if you follow through all the reference trails, might appear to allow it, it seems like it isn't covered under 2202(a)(6)(B), and therefore not allowed? Thoughts? P.S. - just saw the following from Ilene Ferenczy in yesterday's Benefits Link Newsletter, which confirms my thoughts. My thanks to Ilene for her write-up! "The bill permits any “eligible retirement plan,” including qualified plans, IRAs, 403(b) plans and governmental 457(b) plans, to make a coronavirus-related distribution. The bill makes it clear that the provisions in Code sections 401(k), 403(b), and 457(b) that limit distributions will not be violated by coronavirus-related payments, but provides no such relief for defined benefit or money purchase plans (which cannot make in-service distributions prior to age 59-1/2)."

I think it is a gray area. For many TPA's/Plans, the TPA must be involved in approving loan/distribution paperwork for participants to get access to funds. I'd argue that this is indeed essential. But "Officials" (or officious people who like to give orders) may not necessarily agree. It might also depend on the specific definition for a given locality.

But they haven't (yet) formally announced an actual delay, right?

I think it was a "docusign" signature or one of those similar things.

Hard as this is to believe, this is the first time this has happened. Instead of "manually" signing it for us to file, the "manual" signature on the form is an electronic image of the manual signature. I don't think this is any problem, yet I'm uncertain, and I wasn't quickly finding any guidance/FAQ's that addressed this squarely. I'm sure there is, but I wondered if anyone knew this off the top of their heads. Thanks.

I wallow in my ignorance every day. Life is easier and happier that way.

If that's what it is, I'm glad I didn't know!!!

Just FWIW - Perhaps I'm just naive, or foolishly optimistic. I would like to think that on this and a myriad of "situations" where plans, plan administrators, etc. take "reasonable" actions that might not ultimately turn out to fit within the precise parameters of the regulations, that when audits eventually occur 2 or 3 years down the road, the auditors will let a lot of things slide. I have found the majority of IRS plan auditors to be pretty reasonable people who aren't out to stick it to people.

I'm officially "old" but I don't get the BPH reference?

Thanks Lois!!

Boy, the ramifications of this Corona Virus just keep cascading. The Dependent Care FSA's only provides reimbursement for approved day care expenses, etc. - so with most of the day cares shuttered, then participants may wish to reconsider having the deductions from their paychecks if they think they won't be able to use it all, right? I would certainly consider this an allowable situation to change an election... any thoughts on all this?

Hi Chaz - thanks. The written confirmation "release" makes sense. I frankly suspect that most folks would want to notify other co-workers, but perhaps I'm wrong on that. Anyway, hopefully it will never be an issue!

Agreed. I just copied the whole 412(c) section so everyone could see it, but now that you mention it, I can see where this would be confusing!