RatherBeGolfing

Thanks Austin! I'll let the Operations folks know so they can test it out. Much appreciated!

I agree with CB, I wouldn't recommend this until we have guidance. No telling when that will be.

Thanks for suggestion Paul I, I'll look into that.

We are coming across issues where the vested balance is more than the actual balance for certain rehires. Im waiting on the details, but in a nutshell: Participant terminates in 2021 at 20% vested and takes a partial distribution. Participant is rehired in 2022 and is 60% vested at 12/31/23. Relius says that the vested balance is more than the actual balance in the account. Any ideas?

I know a lot folks who aren't that keen on self certification in general. They may not feel comfortable with the self certification aspect or a possible "run on the bank" when employees know they just need to self certify. We saw similar issues with CARES distributions, some plans had just about every NHCE self certify and take money out.

Wait to make the decision to provide or omit until we have clear guidance on how to administer it?

In other words, having more liberal requirements for deferrals to get around LTPTE rules, thus they are NOT excluded solely because of LTPTE rules, so you don't get the benefit of excluding them from SH per the LTPTE rules You could probably find another way to define your excluded class.

I had a client get this as well, and the trigger seems to be that the second return is filed with the incorrect EIN. BTW, when I spoke to the IRS regarding this issue, they said the fix was to file NEW returns with the correct EIN (knowing that these are late and that the incorrect 5500 was filed timely). Since these will be late, you will get love letters from the IRS, and you will need to submit a request for abatement. It takes a minimum of 30 days from receipt for them to review the abatement, but in most cases it will take longer. During this time, penalties and interest will continue to accrue and the client will keep getting notices from the IRS. Has anyone completed this process successfully? Or did IRS tell you to correct a different way? Im just not loving setting yourself up for a penalty when abatement is not guaranteed, and you technically lose the opportunity for DFVCP if abatement is denied. I cant see a reasonable IRS agent trying to assess a $250,000 maximum penalty for an incorrect EIN, but...

Not that I'm aware of, but that is a concerning development... Large amounts?

I know some that don't, or at least did not have E&O for many years...

Very few contracts are bulletproof, but is it worth the cost and headache to maybe be able to shift some of the burden to the prior service provider? I agree with Lou, refer them to outside legal counsel. Also, consider that there are probably three sides to the story: the client's side, the TPA's side, and the truth.

Thanks MoJo, I dont disagree with this approach at all.

ARA requests immediate administrative relief in the form of of delay of application and enforcement of LTPTE rules... https://www.napa-net.org/news-info/daily-news/american-retirement-association-asks-irs-more-time-ltpte-rule https://www.napa-net.org/sites/napa-net.org/files/ARA letter_relief re LTPTE Rules_112923.pdf

I agree. My point is that I don't think we can say that excluding "interns" is impermissible per se, it depends on whether the exclusion could have the effect of requiring more than 1 YOS&A21. Best practice is to avoid it, I just don't think we get to "you cant exclude interns because it implies that they are part-time and therefore its a service based exclusion".

Im playing devils advocate here as well. We know that you can't exclude "employees normally scheduled to work 20 hours or less per week" since they could work more than "normally scheduled" and complete more than 1,000 hours in the year. What if the employer's interns can only work one 6 month period, no repeats? No excluded intern would be an LTPT because they have at most 6 months of service. For that employer, would it still be impermissible? From the discussion portion of the proposed rule (section c item 3) Accordingly, proposed § 1.401(k)–(c)(3) would clarify that the long-term, part-time employee rules of § 1.401(k)5 do not preclude a plan from establishing an eligibility condition that must be satisfied in order for an employee to participate in the CODA, provided that the condition is not a proxy for imposing an age or service requirement (that is, the condition does not have the effect of imposing an age or service requirement with the employer or employers maintaining the plan) that requires an employee to complete a period of service with the employer or employers maintaining the plan that extends beyond the close of the earlier of the periods described in section 401(k)(2)(D)(i) and (ii).

Right, but are they impermissible service conditions? Wouldn't that depend on how the employer structure the internships?

I think many intern definitions do fall into that trap, but I don't think it is service based per se, at least not in the sense that it would always be an impermissible exclusion.

Student or trainee gaining practical experience in their field of study?

Hmmm. In your situation, all interns would be LTPT, but would all LTPTs for the plan be interns? Intern isn't service based exclusion, so I wouldn't jump straight to not valid. Would there be other employees that enter as LTPT that are not interns? Its makes for a more reasonable argument if you are not excluding all LTPTs, just the interns

There was a journal article in JPB 9-10 years ago on ERISA and Sharia. The author was someone at DOL. As I recall it was a very good article. I know I have a hard copy somewhere, but I'm pretty sure I have a pdf as well... I'll see if I can find it for you.

Right, but they should also consider the cost of going back and forth. Lets say that 2022 was audited but not 2023. They now need and audit for 2024. Guess what year the auditor will need to audit anyway in order to state that the 2024 BB is correct? 2023... I have had this discussion with several auditors, and some said they would be willing to do a simplified review (less expensive, maybe half?) in off years to keep the engagement rolling. This would make it easier for years they need to audit, since there would not be an interruption during off years. Some auditors may even reject the client if its not an ongoing engagement... so that's something to consider as well before saying why pay anything for off years.

I think you are referring to a plan EIN rather than an EIN for the plan admin. You would use this to establish accounts, prepare Form 1099/945, etc. These EINs are plan specific. Otherwise, you wouldn't know which plan an account was established for, what plan issued a distribution, and so on.

A resolution/record of action declaring the decision to make such a contribution for that plan year?

Get out of here with this common sense nonsense!

How about this logic? You can't take a deduction for a contribution you also receive a credit for You can deduct the contribution in the allocation year or contribution year (if different and if timely) The credit belongs to the same tax year as the contribution, whether that is year of allocation (incurred) or year of contribution (paid)