RatherBeGolfing

Voluntary Fiduciary Correction Program (VFCP) is a DOL self correction program for certain fiduciary violations: Delinquent Participant Contributions and Participant Loan Repayments to Pension Plans Delinquent Participant Contributions to Insured Welfare Plans Delinquent Participant Contributions to Welfare Plan Trusts Fair Market Interest Rate Loans to Parties in Interest Below Market Interest Rate Loans to Parties in Interest Below Market Interest Rate Loans to Non-Parties in Interest Below Market Interest Rate Loans Due to Delay in Perfecting Security Interest Participant Loans Failing to Comply with Plan Provisions for Amount, Duration, or Level Amortization Defaulted Participant Loans Purchase of Assets by Plans from Parties in Interest Sale of Assets by Plans to Parties in Interest Sale and Leaseback of Property to Sponsoring Employers Purchase of Assets from Non-Parties in Interest at More Than Fair Market Value Sale of Assets to Non-Parties in Interest at Less Than Fair Market Value Holding of an Illiquid Asset Previously Purchased by Plan Benefit Payments Based on Improper Valuation of Plan Assets Payment of Duplicate, Excessive, or Unnecessary Compensation Improper Payment of Expenses by Plan Payment of Dual Compensation to Plan Fiduciaries Voluntary Correction Program (VCP) is part of the IRS Employee Plans Compliance Resolution System (EPCRS) for correcting plan errors such as Maintaining a valid, up-to-date plan document. Following the terms of the plan document while operating the plan. Complying with federal tax law requirements while operating the plan.

In the case where it goes from an EZ to a first SF, no annual return has been filed. In the case where it goes from an SF to EZ, its not a final return because future returns may still be filed.

Absolutely. When in doubt, just ask their documents team. They know their stuff and they are very fast to respond.

Its both! One of the first questions I asked them when interviewing new vendors years ago ?

wasn't that what Kevin said? ?

I agree with your concern. The sponsor has failed to implement a deferral election. Having an inadequate payroll system does not excuse the sponsor from its responsibilities. Corrections are needed both for the missed deferrals and associated match contributions.

I know some people on here will argue that it is a mistake of fact, with at least informal guidance saying it could be considered a mathematical error. I have seen it posted here before. I agree with you though, a change in circumstances is not a mathematical or clerical error to me.

It goes to John Q.

Honestly, this is going to be different for everyone depending on a ton of different factors. How much practical experience you have ,do you easily retain retain information, etc. I put the CPC on the back burner because I really don't need it, but I did a couple of the modules back to back with no problem. Its open book so the answers are all there if you are comfortable with on the fly research. If not, the (non helpful) answer is prepare in advance as much as you need to feel comfortable sitting down for the module. The proctored exam is a different animal. You not only need to know what you are doing, you also need to be able to go through the full process in order to get full credit. I like the one chapter a week approach, but I would probably double it to two weeks to allow enough detail per chapter. Everyone's study habits and learning process is different, but one technique I used in law school was "cumulative review". Week 1-2 Study and outline Ch 1 Week 3-4 Study and outline Ch 2, plus thorough review of Ch 1 outline Week 5-6 Study and Outline Ch 3, plus thorough review of Ch 1 & Ch 2 outlines and so on Pay close attention to the syllabus. Know the learning objectives and tailor your studies to exam weighting. Also, practice exams are your best friend. It doesn't matter how well you know the material if you don't know how to answer the questions.

No

If I lost out on $10 in earnings because the plan sponsor did not deposit what it withheld from my paycheck, how can giving Dave $10 be a reasonable correction?

I agree 100%.

From the SF instructions

There really isn't another reasonable option. Each late deferral is entitled to the lost earnings associated with that deferral. No. It is pretty clear that you can't give the lost earnings owed to one participant to another participant, simply because it is more convenient. Doing so would not make the participant who suffered the loss whole, which I would interpret as an incomplete correction. You could try, but I have seen more reasonable "short cuts" shot down in VFCP applications in the past. What I have done on VFCP apps with 100s of participants in the past is to calculate the lost earnings for each payroll as a whole, and then attaching a spreadsheet allocating the earnings for each late payroll date proportionate to each participants part of the total late deferral for the payroll date. It cuts the actual lost earnings calculations down to the number of problem payrolls rather than for each participant, and the spread sheet is pretty simple to set up. The bigger problem is what do you do with the participants who have left, and now have a balance of less than $1. If possible, I would ask the plan sponsor to eat the distribution cost and send the participants what they are owed. Of course, that may create another issue with lost or recalcitrant participants, but I think that is a separate discussion.

This doesn't doesn't really make sense. The 7 business day safe harbor clearly does not apply at all for a plan with more than 100 participants, so why is this even part of the discussion if the plan was a large plan on 1/1/17? Just correct it. I have never seen the DOL or IRS follow up with additional penalties and interest for a late correction that was initiated by the plan sponsor. Also, don't forget the VFCP or you may get a love letter from the DOL.

And if we could get rid of those pesky deadlines....

Agreed. Using the facts from the OP, 2018 is not a required distribution year.

@Appleby The ERISA Outline Book by Sal Tripodi

Hope you are doing ok over there Larry.

Here is what the EOB says RMD has to be taken out if it is a required distribution year. Since she is still employed, an RMD is not required for 2018. If she terminates during 2018 after the distribution has been made, 2018 will become a required distribution year, with no assets left to make the RMD. If that happens, the distributing plan is still treated as having satisfied its minimum distribution requirements, but the the recipient plan will have received an invalid rollover amount.

Yea its one of those areas where just because you can do it doesn't mean its a good idea...

Sure it can. If I have age 21 and 1 month of service and change it to age 21 and 1YOS those who have not met age 21 and 1YOS are excluded until they meet the new requirement. I'm not 100% sure if the same applies to a change in entry dates but I can't find a good reason why it wouldn't.

What about the folks hired in July and entered on August 1? Quarterly entry dates are still earlier than the statutory requirement, so they should be able to exclude them as well. Im not sure what they will gain by excluding them for 10 days, but I still think the could if they wanted to.

It is also a good idea to let your clients know that they will most likely get a late notice even when they are entitled to the tax relief, and to forward any such notices to you ASAP so that you can respond. We got a bunch of those after last year's storms for taxpayers who should have been "automatically detected" by the IRS

Since you have never filed a 5500, does the government even know the plan exists? Did you file for a determination letter? Even with a det letter and no 5500, I think the chances of an audit are pretty much non-existent. I would wait and do it all at the same time.