RatherBeGolfing

After you renew, you are supposed to get your renewal letter in the mail. If you haven't gotten yours, contact the IRS and ask them about it. I had to do that last cycle. If you send them an email, they are required to respond. When I have emailed them, they have called me within a few days to discuss, and then follow up with an email response to see if everything has been resolved. EPP@irs.gov

I wouldn't bet on it being corrected anytime soon. While it was clearly an unintended consequence, fixing it does not appear to be much of a priority, or at least that is what I have been told... In the meantime, if the sponsor is really wants to get around the issue they could always amend the plan to not use the safe harbor provisions. Its not like we cant do it, we just cant do it using the safe harbor.

Any particular reason for thinking it wouldn't be legal (or allowed)?

They could have a company policy that allows the employee to convert the accrued vacation to cash on the condition that it is 401(k) contribution. That solves the cash/401(k) bit. But it opens a whole other can of worms since the ER can't actually enforce the "deferral", and is it even an elective deferral if its required?

As far as Im concerned, the usage of "stop" or "suspend" doesn't matter. For our purposes, both of them means deferrals cease when the participant elects to do so. As an administrative matter, I wouldn't start (or restart) deferrals until the participant enters into a new deferral agreement, so stop/suspend simply means stop at this point and nothing more. Most of my plans are drafted to allow for changes every payroll. I have a few plans that restrict it to quarterly but that is about it. If it makes sense to go with payroll period changes rather than quarterly, then amend away, but you certainly don't have to just because a participant might want it.

They would fall under the 5500-EZ penalty relief program rather than the DFVCP, but they will now have to file a Form 5500-EZ rather than the electronic 5500-SF. The pilot program had them file the SF electronically, but the permanent program changed that to an EZ instead. Since they fall under the EZ program, they would be ineligible because they have already received the CP-283. They could still apply for relief due to reasonable cause, but I don't know how picky the IRS is with reasonable cause filings now that the penalty relief program is in place.

As far as what the best way to prepare, the practice exam and the syllabus are your best friends. Don't assume that the practice exam material will be on the exam, but the format will. You should definitely read all the material, but focus on the learning objectives in the syllabus. If it says that a successful candidate will be able to do XYZ, it will probably be on the exam in some way. Here is what I would do since the exam is coming up fairly shortly: Answer / explain each learning objective in each chapter. You can do it on your computer or by hand, but make sure you can organize and read it. Do it in short but complete answers with bullet points if possible. Make sure all required information is included in the answer. After you are done answering all the questions/objectives, put away the book and focus on your learning objective outline. If you can answer each learning objective, you will have no problem with the exam

Yes. Yes. 100% this

Hah I thought I was going crazy for a while... I'll admit that bankruptcy is not my specialty, but the EOB suggests that the full protection from creditors in bankruptcy is not automatic for an owner only plan. It would require the plan to be "qualified in operation", and one case cited was held to not be qualified in operation because of prohibited transactions under §4975 (that the IRS considered corrected!).

There is an example in the EOB (CH3B - Section XI - Part B - 2.b.4)b)) where a court (Daniels v. Agin, 736 F.3d 70 (1st Cir. (Mass.)) held that a one person plan was not qualified in operation, and thereby got around bankruptcy exclusion extended to working owners in a plan that otherwise meets the definition of an employee benefit plan. It sounds like its an outlier, but following this logic it would be worse off in a one participant plan than an IRA. Thoughts?

Other than 401(k) contributions, is there a difference between a husband and wife profit sharing plan and a "solo 401(k)"? *Edit: Looks like Larry beat me to it

I find the DOL behavior very odd. In my experience they act fast on participant complaints. Make a complaint of your own, and like Bird said, shame them into doing their jobs if you have to.

For document purposes, there is no problem with a mid year amendment. For safe harbor purposes, you have messed up royally.

I thought even payroll providers knew better than to retroactively try to change the type of SH... I think Mike and Larry are correct. You are stuck with the match because you have led the participants to believe the have to contribute to get a contribution. you also have to follow the document and provide a 3% contribution, even if it blows up your safe harbor. Your document doesn't allow ADP/ACP combos at all? I could understand that it wouldn't allow both as the ADP safe harbor, but I have never seen a document that doesn't allow for a match in addition to the 3%

You probably have contact the IRS after DFVCP since there is nowhere on the assessed penalty notice to respond with the DFVCP information like there is on the proposed penalty. But the result should be the same.

They use this language in their current VS as well, so I talked to their document folks about it. Both of our interpretations are reasonable, but yours is more conservative. An amendment similar to what @Kevin C described could be done with the FTW document as well.

Well, there is nothing on point because it is not a protected benefit :) what is the exact language in your current document? And I'm pretty sure FTW can accomodate this change, there is simply no reason for a provider like FTW to restrict their volume submitter like that, and I don't eve think they have a standardized document any more. After the next restatement there wont even be a prototype or VS document, just a pre approved document since there is almost no difference any more.

Tom, I'm not reading that the same way you are. What it says (to me) is that if you are eligible on the effective date, you enter on the effective date. If you were not eligible on the effective date, you enter on the specified entry date if you are still an employee. I don't read that as not permitting changing eligibility. It really just makes the effective date a "special" entry date.

Thanks BG. I remember that call now that I read the transcript. While I can't cite anything, I believe the IRS was pushed on this issue after the call and they reiterated that they don't back ANY particular rate as it depends on facts and circumstances. There were some pretty wild discussions on the ASPPA linkedin message boards at the the time.

Oh we can gripe about the weather here in the sunshine too. I'll have you know we had an unusually cold "winter" and had more than a handful of mornings with temps in low 30s... It is quite comical to see people dig up sweaters and gloves they only wear once a year

I think sitting through that movie was karma for going to see all those Pauly Shore movies....

Obviously there are a lot of these calls with various people from the IRS but from my experience they have not gone as far saying "use Prime +2". What I have heard is more along the lines of the IRS not endorsing a general policy of Prime +1 and in many cases Prime +2 is probably more reasonable. That said, Prime +1 is what I see 99% of the time and I have never seen it be an issue on audit.

I agree that the loan example is questionable, but the following section of the EOB seems to back up Robert Richter's example in the presentation attached above. It would be an odd example to include for BRFs if is isn't doable because of 2550.408b-1(b)(1). The last sentence of 5.b. suggests that you could limit loans if it is restricted to benefits accrued before elimination, and it satisfied the currently available test at the time it was eliminated. I think in-service distributions would be doable subject to the same limitations. I don't think you can allow a select group of participants to take an in-service of future benefits without BRF testing. EOB Ch 9 - Section X - Part B - 5 (current online edition)

WS62 - Benefits, Rights and Features Identifying, Testing and Amending.pdf This if from the 2015 ASPPA Annual conf. Look at slide 15. DC Plan is amended as of November 1, 2015 to only permit new loans to those with account balances in the plan as of November 1, 2015 Plan passes current availability as of Nov. 1, 2015 Retention of loan feature does not need to be tested in future for current availability provided: – Loans only based on account as of Nov. 1, 2015 – Not required to be adjusted for earnings (loans are not 411(d)(6) protected benefits)

Yea I realize I should have worded it differently. I didn't mean to say he is ineligible even if he is misclassified, but rather that this is an employment issue first. If he is an IC, he cannot participate as an employee (because he is not an employee) If he is an employee treated as IC, he is either improperly excluded (because he is an employee), or properly excluded if the document uses a clause you discussed above. Even if he is supposed to be eligible because of misclassification, wouldn't the classification have to be addressed first since he wouldn't have comp as an employee as long as he is classified as an IC (1099'd as non employee wages)?