RatherBeGolfing

If nothing else, 10% is probably a big enough contribution to push participants to make an affirmative election.

We have been able to solve for AE and escalation in our RK system and other applications, but I know many are struggling with it. 100% agree we cant put that responsibility on clients.

It should. I haven't seen many plans actually default to 10% though.

Yes, but it wasnt all that clear in my opinion, and that's why we get some relief since you can basically "catch up" to cover all by the time the regulatory applicability date. My understanding is that if you do this, these "newly covered" employees would have to have their rates reflect what they would have been had the employee been auto enrolled 1/1/25. So lets say I was eligible 1/1/24 but had no affirmative election on file. I was not auto enrolled 1/1/25 at 3% because I was improperly excluded. I could get auto enrolled 1/1/26 (or later depending on the effective date of the final regs), at the rate I should be at had I been auto enrolled 1/1/25.

Thanks CBZ. Been reviewing the Autoenrollment guidance today so hadn't gotten to this yet. Good thing we have nothing else to do in January

The document providers (ASC and FTW) I have talked to are taking the all-or-nothing approach absent guidance from IRS that says you can do one without the other. Pretty sure I have seen the same from FIS.

Your paranoia is not unreasonable, but if the concern is another business trying to "steal" your clients simply because you approached them with a proposition, a business broker or a third party of some sort is probably necessary. It will be an added expense, but I don't see a way around it if you feel like you cant approach a possible buyer directly.

Non-Disclosure Agreement / Confidentiality Agreement.

@Peter Gulia Im not 100% sure. I know that my document provider removed all mentions of domestic partnership, civil union, and other formal relationships from both basic plan documents and adoption agreements. I have seen similar language in other cycle 2 documents, and while I haven't reviewed the basic plan documents in depth, I don't recall seeing any cycle 3 adoption agreements that include formal relationships that are not marriage.

Merry Christmas Tom and all my fellow benefitslinkers!

All I wanted for Christmas was a technical corrections bill 😟

For Federal tax purposes, the terms "marriage" and "spouse" do not include registered domestic partnerships or civil unions under state law unless denominated as marriage under that state's law. Many Cycle 2 DC documents included language regarding these other formal relationships, but IRS made providers remove the language for Cycle 3. See Rev Rul 2013-17 and Notice 2014-19 n-14-19.pdf rr-13-17.pdf

You answered your own question. They are domestic partners, not spouses. It is not a one-participant plan. File on 5500-SF, and yes they need a bond.

Sounds like all you have is a draft DRO, not a QDRO.

Depends on the provider. We do, and I have seen other providers that offer this service for a minor fee. I have also seen providers that say "not my problem".

This is the answer.

@Carol V. Calhoun So Company A uses Provider X for documents (FTW, FIS, ASC, etc). Rather than having an opinion letter in X's name, A pays $300 and gets an opinion letter in A's name for the document provided by X. ($300 fee to IRS per document type). Company B is now purchasing the assets of Company A, and would like an Opinion letter in B's name. Is that the basics of what is happening here? If so, I believe that is exactly what @EBP described in answer a).

I had a client do this years ago. They paid the penalty, then contacted us a week or two later. IRS said no in that instance. Short version was something like: 1. you filed late 2. we issued a penalty 3. you had two options, pay the penalty or pay user fee for correction program 4. You paid the penalty. You cant correct via program because there is no longer anything to correct. We will not issue a refund because the penalty was legit. In my client's case there was only a small difference in penalty and DFVCP user fee (less than $1,000), so the client dropped it after the IRS said no.

That's quite the statement without knowing anything about the plan or the participant.

HA! We may need an inflation adjustment on that 8 dollars... Happy Friday!

Thanks @Belgarath!

So the new participant count methodology for purposes of the audit waiver is participants with a balance at the beginning of the year, with an exception for new plans which use participants with a balance at the end of the year. I'm looking at a 5500 for a PEP with the following facts: Plan was effective 9/1/22 Plan filed a first return for the PY ending 12/31/22. Plan had 9 Participants with a balance at 1/1/23 A new employer became an adopter of the PEP 1/1/23 The new employer ends up with 160 participants with a balance at 12/31/23 This seems pretty straightforward to me. Its not a new plan and there were only 9 participants with a balance as at the beginning of the year, no audit is required for 2023. With 160+ participants with a balance as of 1/1/24, the plan will need an audit in 2024. I'm getting disagreeing opinions on the audit requirement for 2023. The argument is that because the new adopting employer ended had 160 participants with a balance as of 12/31/23, they also count towards the beginning participants with a balance count, which then is over the audit threshold. Anyone disagree with me that the plan does NOT need an audit for 2023? The fact that its a PEP shouldn't change things here since its one plan and one 5500... Thanks!

I have never seen this, can you give us an example of when an individual's taxable year is not calendar year?

I suspect that this would have to be manual adjustments which makes a hard no for me

Thanks @CuseFan! Yes that's what I'm concerned about as well, it appears that the employer involvement here is more than it should be for a deferral only non-ERISA plan... Ive requested additional documents so hopefully I'll know more soon.