Belgarath

So, back to the future. It seems like under a combination of the previous guidance, and the IRS Notice 2023-43, it would be possible for an IRS pre-approved 403(b) Cycle 1 nonamender - a public school system - (but one who had previously adopted an appropriate document for the original 2009 deadline) to use SCP to adopt that Cycle 1 document, with appropriate amendments for Hardship and CARES? Or, do you interpret that VCP is required? I'm inclined toward the former, but it does seem a bit nebulous.

I had an early mentor in this business who told me, "Don't try to make sense of it, just accept it for what it is and act accordingly. If you try to make sense of it, you'll drive yourself crazy!"

I vote for VCP.

Hi Peter - this one. The employer is, to be kind, useless, and has been in complete disarray for months. We shoulda dumped them a long time ago, but the bosses don't like to cancel clients... We don't know yet if the accounting firm will have an issue with this - just preparing for that possibility. Gracias.

So, employer does binding resolution to terminate plan as of (x) date, no new contributions, etc., etc. Notification to employees is sent, specifying that date as the effective date of the plan termination. However, PLAN was not amended to terminate by that (x) date. Arguably, the resolution can suffice, at least temporarily, to legitimately establish plan termination date, and plan can subsequently be formally amended to terminate, update for SECURE, etc.? Or is that a hard no? We always do plan amendment by the day before the formal termination date, but I believe that facts and circumstances can allow otherwise if the resolution, notification to employees, etc., are sufficiently detailed. Thanks.

It is a fantastic resource, and has been run so well, for so many years. A rarity these days. Thanks so much for all your hard work!!

Thanks for the response.

THANK YOU RBR! Now, two additional questions, if I may impose further. Does TIAA, in your experiences with this type of situation, provide some sort of statement, etc. that the annuities comply with this? Or if they don't automatically, will they if you request? I realize the client can ask TIAA this question, but I thought I'd just see if you had already dealt with this question. Thanks again - your response was very helpful (and TIAA was not, although it was years ago when this last came up, so things may have changed since then).

We got a question on a situation where this occurred. The employer wants to know if they can get a refund. Large plan 5500. I've never even had a discussion with anyone who has seen this specific situation. First, in a situation where a form has been filed late, but not under DFVCP, I've seen a good deal of discussion where the recommendation is to file an amended form ASAP, checking the box that it is being filed under DFVCP, and filing ASAP under DFVCP. Folks appear to have had success with this, even if a CP283 has been sent. Agree/disagree? But now the question is whether that option is still available if the employer already paid the CP283 penalty? And if so, how does the employer go about requesting a refund? Sending what we used to call the "tear stained " letter? If so, I think they need to engage the services of someone with direct negotiating experience in such situations. Appreciate any thoughts.

Yes.

So, has anyone done a plan termination lately with TIAA where assets are in individual annuities? We haven't for quite some time, and there were, to say the least, difficulties. When you are terminating a plan, the participant has to be given the option to get a distribution, or roll over the funds. But TIAA "requires" (or did require) the participants themselves to call TIAA if they wanted to surrender. And participants frequently won't bother to do this in a timely fashion. Do you know how they handle this now? And do you by any chance have the contact information for a person at TIAA who actually KNOWS something and is willing to discuss how a plqan termination can be handled in this situation so that a final 5500 can be filed? Thanks in advance!

FWIW - my understanding is that the "30 day" notice is "deemed" reasonable. However, it doesn't necessarily preclude a shorter notice period if facts and circumstances are such that the shorter period is still "reasonable."

Correct.

But remember, my opinion and 8 dollars will get you a cup of coffee.😁 Happy Friday!

I agree.

Wow, this has been interesting, (and a little depressing)... So, if you have 2 employers, each with a plan that has, say, 80 participants WITH account balances, and 1 employer purchases the other, and the plans are going to be merged: Absent other reasons for choosing December 31 or January 1, it might be beneficial to make the merger date January 1, in order to avoid a 1/1 participant count that would require a plan to have an audit as a large plan? Or (and I'm not clear on this) if the official merger date is 1/1, would this be questioned if trying to avoid audit? Would it be better to use 1/2 instead, to remove all doubt?

This may help. https://www.irs.gov/publications/p538 Whoops - I see Peter already posted it! P.S. - I've never seen it either. I'd hazard a guess that most of us haven't.

A great point!

Yup.

Agreed. But depending upon which selection you make in Article 1 a or b, it could be immediate, 1 prior year, or 2 prior years for eligibility. Again, you are correct that it is based upon compensation, not hours.

Good luck to both of us! We work with an actuary that does governmental plans, and she was not aware of any companies doing what we are looking for. She inquired of an ERISA attorney about a fee to draft a document (for this 8-person Governmental DB plan) and was quoted $30,000.

Thanks. Very helpful.

We have not encountered this - first time for everything! I am, however, unsure of the exact process. So, our client joins a MEP with someone else effective (X) date - let's just say November 10. Assets will be liquidated from current investment provider, and transferred into the MEP - exactly how, not sure we care. My question is re the 5500 SF. Is the 5500 SF filed as a "final" showing the transfer on Lines 13(b) and (c)? Or would it be a full year 5500 SF since the plan isn't being "terminated." And would it be filed as a short plan year as of the date of transfer of the assets? It appears that no 5310-A would be required. Just not sure of the process. Would it just be the new MEP that would file a 5500 for 2024, and we wouldn't file a 5500 at all? It'll be driven by the new TPA anyway, but I'd like to get a better handle on how this typically is/should be handled. Thanks!

Got it. Thanks for the input!

Thanks Carol. ASC sponsors a pre-approved governmental DB plan in an AA format, but I have not yet compared provision-for-provision to the current IDP DB document to see if it would "fit" onto the ASC frame. Now I don't recall - will the IRS accept a 5307 in this situation, if the changes are not too drastic? Problem is we have a couple of small "legacy" governmental DB plans that are far more trouble than they are worth, but for various reasons just getting rid of them isn't a good option... Thanks again for any thoughts.