Belgarath

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!

Austin - I agree, but I'd just like to mention that the parameters allow a bit more flexibility than that - I'm nitpicking, but I sent a memo to folks yesterday that included the following excerpt: Getting deep into the regulatory weeds, there is one possible “out” in this situation. If the plan is TERMINATED due to a “substantial business hardship” that is “comparable to a substantial business hardship described in section 412(c)" and the only contributions made to the plan up through the termination date were deferrals and safe harbor contributions, then the top heavy exemption IS still preserved for the short plan year. The parameters for determining “substantial business hardship” are found in IRC 412(c)(2) – see the following - emphasis is mine. (2)Determination of business hardship For purposes of this subsection, the factors taken into account in determining temporary substantial business hardship (substantial business hardship in the case of a multiemployer plan) shall include (but shall not be limited to whether or not— (A) the employer is operating at an economic loss, (B) there is substantial unemployment or underemployment in the trade or business and in the industry concerned, (C) the sales and profits of the industry concerned are depressed or declining, and (D) it is reasonable to expect that the plan will be continued only if the waiver is granted.

Since I know nothing about this - just curious. Thankfully, at least for now, this is an academic question. I understand the need for privacy, although in a very small employer situation, it is pretty much meaningless as everyone will be able to figure it out. Nevertheless, if I were to get the virus, I would WANT my employer to notify every employee, even if I worked at a large employer (as I did many years ago.) I would WANT everyone to know, in case they had any contact with me, or with any person who worked closely with me. I assume it is ok for an employer to notify all employees, if the infected employee gives permission? Or are there still restrictions? Here's hoping that none of us will ever be in a situation where we have to care about this. Hope y'all stay well and safe!!

I also am hoping for a little relief of some sort - perhaps a streamlined and inexpensive VCP filing for the next year, etc.similar to what was done in the past - this is particularly true for schools. Yes, they have had 2 years to adopt updated plans, but human nature is such that too many of them have waited until the last minute, and with schools all over the nation now shut down due to the Corona virus, they have far more important things to worry about, and there will be a lot of missed deadlines.

Good luck with that...

As far as 410(b), I don't see that as a big problem. Just do a retroactive amendment - sounds like that what he would want anyway? Or, since plenty of time, amend to reduce the hours requirement if "just barely passing" 410(b) would leave out some folks he wants to include.

Yeah, we just had this issue come up, and of course the distribution is to a HC offspring of the owners. There are two other HC owner/Trustees, and we explained the issue, and left the choice up to THEM. They haven't decided yet...

Why are you asking on this board? Why not ask "them" - whoever "them" may be?

Maybe I shouldn't, but I do have some faith that even if there isn't "official" published relief, that IRS/DOL auditors will be reasonable and not bring enforcement action if Notices are late due to bona fide issues with this situation.

I'm a little confused by wording of the question. Since GAP earnings aren't included in the distribution, the earnings being included would be earnings during 2019, right? So only earnings (or losses) during 2019 would be recognized. Gains or losses during 2020 wouldn't be recognized. But I may be misunderstanding the question

RBR - the attachment you included was revised again on February 8, 2017. The IRS used its authority to modify the date to October 15th for C-corps, as per the Form 7004 instructions, and the IRS website. Here's the most updated version I have... https://www.aicpa.org/interestareas/tax/resources/compliance/downloadabledocuments/due-dates-summary-chart.pdf

This, perhaps? https://www.erisa.com/revenue-procedure-93-42/

Thanks, and there is. The gateway isn't given to the OEE's, BUT, it is given if necessary to satisfy 401(a)(4).