RatherBeGolfing

George also caused a bomb scare because he was trying to nap at work, just sayin...

$750 per year capped at $1,500 for a small plan. The user fee would be the same to correct 2016 and 2017 as 2016 through 2018 (and beyond) if it questioned. I still think that 5500 or 5500-SF is the correct form though.

I agree, but if they are that big much of a big time exec they probably just hand the credential number and pin to someone less big time to do the actual filing. I know they aren't supposed to do that, but I'm sure it happens all the time.

You only file one form, and it should go to the address listed in Rev Proc 2015-32: Internal Revenue Service 1973 North Rulon White Blvd. Ogden, UT 84404-0020

How many filings are are we talking about here? Since OP is only looking for a way to avoid signing each form individually, I assume that the concern is not the time and effort of reviewing each form to make sure they are true, correct, and complete before signing under penalty of perjury. It would have to be a very large number of plans if just signing each one is this big of an issue. I file for my clients and even with the additional steps of we have to go through it doesn't take that long to work through a decent number of filings...

Ok fair enough. You keep going back to "didn't have to file" for 2016 and 2017 so its a little hard to determine your rationale. If you didn't qualify for the EZ, you also didn't qualify for the $250k exemption. The only way to not go through DFVCP is to make the determination that you DID qualify for the EZ in 2016 and 2017, which means you would continue to file (or use the $250k exemption) for 2018. You can't switch to a 5500 or 5500-SF for 2018 without addressing 2016-2017. It will be your first filing for the plan but the details of the filing will make them follow up on why you haven't filed before. You can't answer that previous years were EZ-exempt because if they qualified for the EZ in 2016-2017, they would still qualify in 2018. They have heard the "I didn't think I had to file" excuse a million times and will tell you that is why there they have the correction programs. If you had filed an EZ for 2016 and 2017, you might have a small opportunity to argue that you filed a return but you filed the wrong one, and hope that they will see it as reasonable but even that is questionable. Basically you have two options 1. Make the determination that the plan should file a 5500 or 5500-SF and file DFVCP for 2016 and 2017. 2. Make the determination that the 50-50 S-corp owners should be treated as partners because of the language in PPA, and continue to file or rely on the the filing exemption for the 5500-EZ. Personally, I would go with #1, but considering the penalty cap under DFVCP I could see the argument in continuing to file as an EZ.

I think you are missing the big point being made. The $250k exemption only applies to the 5500 EZ. If you do not qualify for the EZ, you have to file, period. Why do you think you qualified for the EZ (with the 250k exemption) in 2016 and 2017 but not for 2018? Maybe if you help us understand your logic we can give you a better explanation.

Why is it a problem? There are no regs or statutes on how a check must be written for a distribution or rollover. Common sense says it should be issued in whatever format required for it to be correctly deposited. If the IRA custodian wants a certain language (or certain language omitted) for identification purposes (to make sure it gets credited to the correct account), I don't see a reason to question it unless its unreasonable. In fact, Id rather have a few extra steps at this point than a possible stale check floating around. Are you unable to issue the check per the custodians request?

Its not going to fly. It is part of the reason they created penalty relief program.

I disagree. In your example, the plan year that started with 2 participants should be a 5500 or 5500SF. the next year will be an EZ assuming that the participant who is left in the plan is the only participant all year (and that the participant is the owner).

Nothing has changed from 2016. They are not husband & wife, they are simply 50-50 owners in an S-corp. You don't get a pass on 2016 and 2017 because you thought they were married. If the plan has to file a 5500 rather than an EZ, 2016 and 2017 were not filed. The EZ filing exemption does not matter here, even if you had filed an EZ for 2016 and 2017, those do not count if you had to file a 5500. That is why @C. B. Zeller said you have to file under DFVCP. Here is the kicker though, it is not entirely clear which form should be used. The EZ is for 100% owner & spouse or partners in a partnership. You clearly don't qualify for 100% owner & spouse. You seemingly do not qualify for partners in a partnership since you have 50-50 owners in an S-corp. PPA included language that says that a 2% share holder in an S-corp is treated as a partner. This suggests that your 50-50 owners should be treated as partners and file an EZ. PPA did not amend the definition of employee benefit plan, and as such the 50-50 s-corp plan would be an employee benefit plan covered by ERISA. This means a 5500 rather than an EZ. The 5500-EZ instructions do not reference the treatment of 2% shareholders of S-corps as partners. There has been disagreement in the industry as to which Form applies to your situation. I would file a 5500 or 5500-SF because it takes care of the ERISA reporting requirements. I think it would be easier to talk the IRS into penalty abatement by showing that you filed as an employee benefit plan for reasons XY&Z than to approach the DOL with no filings at all. I do think you have to be consistent though, you can't pick position A for 2016-2017 and position B for 2018. if you are switching to a 5500 for 2018, file DFVCP for 2016-2017.

How recent was the Groom article? I have seen some from the last couple of hours that are still pretty positive, though not from Groom

You are right, there are providers out there who do not make their clients fix their issues like late deferrals, or only do it after a certain point. If you advise your client that they have compliance issues and the client refuses to correct them because of cost, can you continue to represent the client? The answer is a clear no if you are subject to Circular 230. Do you prepare the 5500? Its hard to justify preparing an incorrect return, even when you are not the one to sign it. The bottom line for me is don't make your clients problems your problems by trying to cut them some slack.

Yep. It happens all the time. This is why every class, conference session, and webinar make a point of reminding you that there is no de minimis amount when it comes to late deferrals. Or maybe because its the law? :) Why? The rules have to be followed to the letter anyway, so it should be easy to just notify the participants that he has done what he is supposed to do. He is lucky they didn't bring it to the DOLs attention and have them enforce the rules instead of giving him the chance to clean up his own mistakes. This is not unusual. Hopefully it will be a valuable lesson to the client to make an effort to make timely deposits rather than clean them up later. And honestly, its hard to feel bad for him when he only got 25% of his payroll deposits in timely and some were up to 6 weeks late... When it comes to corrections I want transactions into a plan account so that I have a clear paper trail that the corrections were done. You could establish a checking account for the plan outside of the platform provider and have the amounts deposited there, then cut checks from that account. Or make the corrections to the platform and transfer to the checking account. Any distribution fees should be paid by the client, not the participants.

We do reconciliation similar to what Bird described above, recording all the activity in the account and balancing month by month. Its not too bad for pooled accounts, but it can be a real PITA for SDBA plans when the participant count starts creeping up. We use spreadsheets now but before that we used an actual trust accounting software that recorded everything on the transaction level rather than totals (each purchase in January vs. one entry for January purchases).

Ours is attached/enclosed with the benefit statement but not on the benefit statement itself. We provide a breakdown of each investment, so individual stocks, mutual funds, etc. Participant loans are shown as a total rather than each individual loan.

The provider is really irrelevant. It's a plan asset, and a plan problem. How much of an issue depends on the details. When was the original payment made, was there notice and consent or was it a forceout, were there taxs withheld, was it reported on a 5500, 1099, 945, 8955, etc... It should be deposited to the trust, he participant should be default enrolled, and payment process should start over (and other steps as necessary). If participant does not receive your payment, go to your missing participant procedures. I do not think that sending the check to the sponsor is reasonable as it should be handled on a plan level.

The stale check is a plan asset, I don't see how you can reject it. I would request that the prior provider hand over whatever information I need to take care of the assets though. I have had this happen before because some investment platforms have more than one step in a distribution. Basically the provider takes the amount from the plans account, and makes the payment from a provider account. As far as the plan can see, the payment "cleared" when removed from the plan account. On the provider side, the payment from their account goes stale so the amount remains in that account rather than being returned to the plan account. This is one of the issues in the missing participant debate. It gets even more fun when you add overlapping plan years and withholding...

I agree, and we also fully reconcile the assets. I guess my issue is more that I don't think you can properly administer a pooled plan without asset reconciliation so noncompliance of the schedule of assets requirement is part of a bigger problem.

The pertinent language from Section 508 is: So its not whether a participant has any rights to a specific asset, it is whether the assets of the individual account has been allocated to an investment. Since the investments are pooled, a pro rata share of each account has been allocated to each investment, and the value of each investment must be disclosed. At least this is the most common interpretation.

Ok I see the confusion. I think the Portman-Cardin bill is actually an new bill in addition to RESA rather than a modified version. Most of the calls I have been on discuss RESA separate from the Portman-cardin bill. RESA pretty much mirror SECURE and the SH stuff is in Section 104 I think. My understanding is that the expectation is to pass RESA with some of Portman-Cardin, and then try to pass some additional parts of Portman-Cardin on it's own down the road.

I don't have it in front of me, but I believe it is Section 103. It does not explicitly eliminate the safe harbor notice, but the it is not included as a requirement. The committee report explained that it was no longer a requirement, but that you are still required to give a participant reasonable opportunity to make an election. I'm pretty sure that was current as of 5/21/19, can you link to what you read?

My understanding is that Participant would indicate on the 12/31/2019 return that it has been repaid to another plan or IRA, so the 1099-R issued by the plan is not counted as compensation for 2019. The plan still issues the 1099-R, it is not involved with how it is accounted for on the participants return.

We have a lot of pooled plans and we provide a list of Assets & Liabilities with the SAR & benefit statements. From what I have seen, most practitioners provide a similar A&L. Its either a list of assets and liabilities with amounts at the end of the year, or a list with amounts at the beginning and end of the year. Not that complicated.

Florida TPA here. We DO address this with our clients, as do several of our "friendly competitors". We do not require that they pay the doc stamp, but we make them aware of it and explain the state requirement. The state of Florida has been very clear that 401(k) loans are included, but it really isn't enforced at all. I haven't heard of them actually going after anyone for not having the doc stamps on loans. My guess is that they will collect from people who pay it rather than actually going after the "uncollected tax" and getting into the preemption issue (they are well aware that it is ignored). I know plenty of industry experts who dismiss the doc stamp requirement as unenforceable should Florida decide to go after all the plans with loans that have the required Florida connection. We have clients who pay the doc stamp tax, not many, but some. As a practitioner her in Florida, there isn't much we can do other than address the issue and leave it up to the client to make the payment.