RatherBeGolfing

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.

100% this.

Amend the filing to reflect DFVCP?

Correct. Pretty much. Like BG, I filed most as one-participant plans on the SF until we could file the EZ electronically.

If the entity required to file the 5500 is also required to file at least 250 returns of any type, mandatory electronic filing of the 5500-EZ applies. The CPA is incorrect.

Im not sure I would go as far as mandatory pre-tax, but I have come around to embracing auto-enroll for the simple fact that it may help some people save something, and I don't see any harm since you can also opt out.

I don't see this provision causing that many issues. Also, its not just the immediate taxation that is so important. The Rothification of the catch-up is part of balancing the cost of the bill. Since they can say that a certain amount will be collected in taxes on Roth, it counters the cost on other items like tax credits or increasing the RBD on RMDs.

It should be pointed out that this is the general rule in HR 2954, but there are post-enactment exceptions for new and small employers: New businesses that have existed for less than 3 years Small businesses. General rule shall not apply earlier than 1 year after the close of the first taxable year with respect to which the employer maintaining the plan normally employed more than 10 employees.