RatherBeGolfing

Would you mind expanding on that? I agree the assets are not excludable under ERISA since it is not an employee benefit plan under ERISA. But are there not still protections as long as the plan is qualified, both federal (at least I thought so) and state. Most states have language to offer protection as long as the plan is qualified. The argument here is that the plan is not covered by ERISA, and because it is not covered by ERISA it cannot be qualified, therefore the assets have to be included in the bankruptcy.

Which trustee argument is correct? That the plans are not covered by ERISA? That the plans are not qualified because they are not covered by ERISA? That assets in a one participant plan are fair game in a bankruptcy simply because it not covered by ERISA? Im not expert when it comes to bankruptcy but my understanding was as long as the plan was otherwise qualified, the assets were still protected.

Holly is awesome, she did our first demo with them back in 08 or 09 i think. Overall FTW has always been responsive when it comes to adding features or functions.

Thanks Bill. We have quite a few balance forward plans that DTS would work well for, and I like the integration with the other FTW modules like 1099 and compliance. I REALLY like that we can use the DTS user forms to autocomplete forms for different platforms like JH and American funds, because then I only have to teach someone one system in order for them to deal with distributions from multiple platforms

Which is why the "not covered by ERISA, therefore not qualified" was an amusingly lazy argument (for those of us who don't have to deal with this particular case...)

Has anyone used FT Williams Distribution Tracking Software (DTS)? It has some features that look very appealing but I'm wondering how much time you spent setting it up and if you have had success getting clients to use it to initiate and sign off on distribution and loan requests. Thanks.

Its actually not that difficult. I think people just assume it is because its the IRS

Can you point to anything that supports the deduction of a current contribution in a future year, other than a contribution in excess of the 25% limit?

Yea I usually do mine at least a month before due date as well. I know a few firms that do them in February Hectic must have been an industry trend this year. I got caught up in a merger and ended up filing extensions the week of July 31 for the first time in many years

Yes. I generally wait at least 4 weeks between the 5558 and 5500. Its just a PITA to deal with incorrect "late 5500" notices when you can just delay the filing.

They are two separate issues. There is still a loan failure because the loan payments were not made. The Employer caused the failure but could correct it under VCP. The failure to timely remit would also need to be corrected.

Or as I had to tell a client this morning: You DON'T get what you refuse to pay for...

I haven't done a paper submission in years, but I would assume they would not approve it since the instructions are clear that is has to be a person unless its government entity.

FTW has a report in the compliance module that breaks down the 5500 count. So for an SF it will tell you BY count 10, 9 already active and one 1/1 entry, and so on for each count. Its accurate about 99% of the time, but every now and then a rehire or something like that will throw it off. I had the same issue back when we used Relius. I'm not sure why they roll, other than that it may be a legacy issue. A long long time ago someone explained it to me as "IRS wants last years end count to match current years beginning count", and while that may have been true at some point, they sure want an accurate count now...

What is there to correct? Having a successor plan is not a violation in itself, it just creates a problem if you made certain distributions from the old plan that are no longer distributable due to the successor plan. Or am I missing something else?

If you use both the compliance and 5500 modules for FTW, it will also pull the 1/1 entry folks. And yes, I would add them if FTW did not do so for me.

Sure it does, the responsible party is still person even if the trustee is an entity. They need to designate someone to be the responsible party, this is the person who will receive mail and notices etc... Why EIN and SSN if you cant use an EIN? From the SS-4 instructions (emphasis mine): Lines 7a–b. Name of responsible party. Enter the full name (first name, middle initial, last name, if applicable) and SSN, ITIN, or EIN of the entity's responsible party. Responsible party defined. The “responsible party” is the person who ultimately owns or controls the entity or who exercises ultimate effective control over the entity. The person identified as the responsible party should have a level of control over, or entitlement to, the funds or assets in the entity that, as a practical matter, enables the person, directly or indirectly, to control, manage, or direct the entity and the disposition of its funds and assets. Unless the applicant is a government entity, the responsible party must be an individual (i.e., a natural person), not an entity.

Most will use the calculator either way. Sure they can. They DOL does not recognize self correction, so as far as they are concerned you have not actually corrected yet. I always recommend it, but not all clients will opt for it. As for the cost to fix vs tax and earnings argument, I look at it a little different. What you are actually correcting is the clients failure to follow the law. You shouldn't look at it as "it will cost me $500 in consulting fees for a $50 excise tax", instead, its a $550 dollar correction

Im saying that making the last payment (or payments) after the 5 years is fine as long as its within the cure period for those payments. So if you had at least 1 day left on the loan term you could say "correct by lump sum on the last day of the loan", and then make the deposit at some point during the cure period and be fine. I don't see that as an option the loan term is already over.

I agree you can't re-amortize. But if you can't re-amortize after the 5 year period has expired, why would you be able to correct with a lumpsum? I think the only payment that can be made after the maximum term of the loan is a payment that still has a cure period. I think the only options you have are 1. Deem and 1099 in the year of default (2018) 2. Deem and 1099 in the year it was discovered (2019)

don't you have to re-amortize all the payments where the cure period has expired though? I don't think we get around the amortization problem by a lumpsum of payments if they are outside the individual payments cure period, can we?

Correct. Before the SCP option, you had to go through VCP in order to issue a 1099 in the year of correction rather than the year it actually deemed.

I missed the part of it being the same loan... So, the loan defaulted in 2018 and should have been a deemed distribution in 2018. Under EPCRS, you can deem it in 2019 and issue a 2019 1099-R rather than go back to 2018. You don't have to deem it in 2019 though, you could still issue a 2018 1099-R. For the second part of the question, what I was saying was that the cure period does not actually extend the loan. If your last payment is due on the 5 year day, and the payment is made 30 days after that, you still have not exceeded the 5 year maximum. In your case though, we are already past the 5 year mark. I dont think you can correct by re-amortizing retroactively. In other words, if your correction is to re-amortize and pay the loan off in order to avoid a deemed distribution, that new payoff date cant fall outside of the 5 year window because your scheduled payment exceeds the maximum term. You cant correct by saying I will pay a lumpsum 30 days ago but since we are still within the cure period I can deposit today. If you had a day left on the maximum term, you could correct by saying pay the lumpsum tomorrow, but actually make the deposit within the cure period and be ok. Does that make more sense?

Yea I tend to agree. If a 2018 payment was missed and not corrected during the cure period, the loan should be defaulted. You could still correct it it through EPCRS tho. Most likely yes. The cure period and the term of the loan are two separate issues. IRS has informally agreed with this position at a past ASPPA Annual Q&A.

I have never had that issue with filings before, but I have had that issue in the past. As it was somewhat recently explained to me by the folks at USPS, tracking is done by scanning at each stop on route to the final destination. The barcodes sometimes get messed up and which means that it does not get logged at the stops or final destination. The problem is that it is also possible that the item has been lost. There is no way to know without further investigation which includes USPS contacting the recipient at the final destination. It is a loooooooong process. With time remaining, I would send a new batch. Even if both get there it wont be a problem.