RatherBeGolfing

You are probably referring to the "Taxpayers not in the covered disaster area, but whose records necessary to meet a deadline" part of the relief. The IRS will (or is supposed to) cross reference the location of the taxpayer and automatically apply the relief based on zip code. Relief based on a service provider in the disaster area is not automatically applied by the IRS since they don't have the information to cross reference. Expect correspondence, but relief is still granted based on the location of the service provider. Relief based on service provider location is not determined on a case by case basis, they are not going to apply a facts and circumstances test to determine whether the PA could have filed timely. They will simply verify that the zip code of the provider is in the disaster area. What can you do as a service provider? You can submit a bulk request from practitioners for disaster relief, which lists clients impacted due to practitioners location in a disaster area. This alerts the IRS that taxpayer is entitled to relief due to the location of the preparer. While the IRS will not tell you this up front, you should also attach the explanation to your filing. I had several IRS employees tell me this a few years ago when a hurricane knocked out the office power for 10 days in September-October. If you have a POA you can also call the IRS to identify the client.

I agree as well. The notice (if required) should be delivered to participants within a reasonable period before the beginning of each plan year. at least 30 days but no more than 90 days is deemed to be reasonable, but other periods can be reasonable as well. Personally, i find it unreasonable to deliver a plan notice for a plan that does not even exist yet. So if I sign a plan on 10/1, 10/1 is the earliest day the notice could be delivered (and I would argue that is completely reasonable). I agree with Cusefan that the plan is supposed to be ready to accept deferrals for 3 months, so 10/1 may be pushing it unless you have a backup plan for deferrals.

Ugh I loathe this kind of "marketing". I once had a client get one of these where they claimed the sponsor could be in big trouble because per the plan characteristics, the plan didn't use DIA's. It was a pooled profit sharing plan, with no 401k provisions...

They both will eventually.

Happy to help Peter. Being curious in this industry gives you many rabbit holes to go down.

Outside of VCP (where just about anything is possible), I don't think it is possible. Peter, even if you established and merged plan 002 with plan 001 immediately and retroactively, why wouldn't a 5500 for 002 be necessary? The financial reporting would be in plan 001, but you would still have to report participant counts and plan characteristics for plan 002 since they are eligible for the PSP at creation. If we accept that creation of plan 002 created the eligibility for a PS contribution, that plan existed and must be reported. Creative solutions to the retroactive merger aside, I don't see a way out of the reporting.

@Peter Gulia @Luke Bailey Thank you both! Your explanations clarified it for me somewhat (since the issue isn't exactly clear) and gave some great jump off points for research.

Luke, can you expand on this? I could see this come up if the beneficiary designation is in question for some reason, but lets assume that the beneficiary designation is signed sealed and delivered with no defects. What state law(s) is emerging (probate?), and what arguments are made to overcome preemption by ERISA? Aren't Supreme Court cases like Egelhoff and Kennedy very much on point here?

Depends on your document... I'm not crazy about this kind of set up, but if you are going to use it you need to be specific in the document or you can end up with a mess. Right now it sounds like you would have a Trustee to Trustee transfer based on the event that triggered the move from one plan to another. A better way is to structure your excluded/eligible employee caveats in the plan so that an employee stays in the plan they were in when they first met eligibility. This way you don't have switching back and forth based on location, last name, division, etc.

Thanks all!

Yes, but not by much. I would also say that there is no reason to NOT have a bond with an inflation guard / escalation rider/ add your favorite name here. There is just not enough of a premium difference.

Yes, per the document it should have been allocated in 2018, and this is probably the only thing that can be done at this point. Just hoping someone had an idea I had not thought of yet

Client is a small company with a 401k plan. Current employees are owners and one of owners children. Last non-related employee terminated in 2018. There is a small forfeiture of $1,500 in the plan. No participant has had any income after 2018. There are no unpaid fees, and no income to base an allocation on. Allocating forfeiture based on account balance has been mentioned, but I don't see how that would work since forfeiture allocations are annual additions, and 100% of the participants income is $0... Any ideas other than revising 2018 to allocate the forfeiture? Thanks!

Thank you for your explanation Peter. I did misread your prior post, and I agree with your view that if ERISA allows a the plan to not pursue a small overpayment on the basis that the cost would outweigh the benefit, the same principle should apply if the employer is is the one responsible would be responsible for the expense.

Peter, can you expand on this? The way I read it, I would slightly disagree. If it would be imprudent or unreasonable for the plan to pay, it is not an expense that can be paid by the plan. In that situation, I don't think it matters whether the employer has a contractual obligation to pay or not.

Peter, having worked with a lot of plans like these with my former employer, I don't think that simply being able to provide the statement is an issue. The big admin software providers have a solution for it. The bigger issue is timing and capability top get the right data into the LII. Many TPAs with plans like these (SDBA plans, or platforms with some SDBA's) only do an annual valuation and may get the statements from the client anywhere from January 1st to October 15. Having the ability to provide the LII through the software and being able to get the data into the system for an accurate LII are two very distinct issues. This is the kind of issue that makes me very happy to have moved away from the "20 different RKs and 20 different SDBA providers" type of practice. It started getting a little iffy to me when the DOL went after brokerage windows in FAB 2012-02 (before the revised FAB after the industry outcry)

Considering 46 billion added to current enforcement spending, I'd be surprised if some didn't trickle down to TE/GE. Not holding out hope that someone will actually answer phonecalls when a client gets an IRS love letter though...

I agree with @Peter Gulia's "no advice" above. It shouldn't be an issue for the IQPA, just a bit more time and an additional line on the invoice...

Different situation, different answer. A one participant plan is still subject to Form 5500-EZ, but you are not required to file if you meet certain criteria. As you point out, you cant turn a governmental non-ERISA plan into a plan covered by ERISA by filing a Form 5500. Late filing penalties does not apply because the plan is not subject to Form 5500.

Filing a 5558 does not create an obligation to file if no Form 5500 is required.

The return has a due date. The return was filed after the due date.

Agree with Peter and Bill. I'll also add that tail coverage has been required by the purchasing entity in several M&As that I have been involved in.

Every time we have a discussion like this, "I'm just bill" starts playing in my head....

It sounds like they had restated to their document rather than Schwab's, so it would be one plan document and two custodians.

The other option is to simply make the restated plan "002" as a successor plan and have them transfer the assets. No distributable event, but gets the assets away from their locked in product.