RatherBeGolfing

Whether a certain correction is reasonable and appropriate is a case of facts and circumstances (2016-51 6.02 (2)) so I don't think it is correct to say that a certain correction "may not be used if...". To simplify things, certain corrections are deemed reasonable. FWIW, I have never experienced (or even heard of) the IRS disallowing the use of the calculator when it was also corrected under VFCP. In other words, I have never heard of anyone having to do a different correction for EPCRS if they also filed VFCP using the calculator. I think your interpretation is reasonable if VFCP is not filed, but again, facts and circumstances.

I agree with booth Larry and QDROphile. I'll add that I'm not even sure if a QDRO could be contingent on future marital status of the AP. I certainly would never let a client agree to such a stipulation, and I doubt a judge would issue such an order.

Agree 100%

Sorry.... Couldn't resist...

Good question. My document uses the language "exclude compensation before participation" AND "limit the definition of Compensation to only that compensation paid to an employee while (s)he is a Plan Participant" for the same exclusion. To me, the its pretty clear that the intention is to only count comp while eligible, so a newly ineligible participant would only count comp while eligible as well.

I can't put my finger on the exact Q&A, but it was the last or second to last ASPPA Annual Conference where the IRS participated with a panel discussion (but not written answers). A similar question was asked and the opinion was that if you made a change that was not required SHN content because of a cross-reference to the SPD, a new SPD or SMM must be issued to the participant immediately. To my recollection, the did not discuss whether the 30-day advance notice rule would kick in but I think Austin is correct that because a new SHN is not required, the 30-day advance notice is not required either. It would follow that you could implement the change immediately after distributing the new SPD or SMM. Of course, this was only the opinion of that IRS employee and not that of the IRS and cannot be relied upon yada yada yada

I don't think there will be a huge drop off of advisers who accept fiduciary status because it will be in demand even without a rule. It think it comes down to the structure of the plan and plan sponsor rather than the assets. Are there checks and balances (committees or some sort of oversight) on how the adviser is selected? If yes, you are probably more likely to have a fiduciary adviser. This is certainly not limited to plans with $50 million in assets. I see this in plenty of plans with assets under $10 million. If the plan sponsor is smaller and the decision making is in the hand of just one or two business owners, the selection tends to lean more towards an adviser with a pre-existing relationship, or in other words "the guy/gal who does my personal investing". There will be plenty of fiduciary advisers out there even for small plans. Even before the rule I could point prospective clients to several advisers who were both fiduciaries and reasonably priced.

Oh I actually agree with you, it is absolutely our job to let the clients know what the consequences are, just like it is also our job to sometimes draw a line in the sand. My point was more that if a client does not want to file VFCP, you cant really force them to but you have to tell them what the consequences are (especially if you are also governed by Circular 230). The 5500 is a different matter altogether, because most of us actually prepare the form for the client, so preparing and helping a client file a form that does not answer the compliance questions truthfully impacts the professional just as much as it impacts the client. I can live with a client that is willing to play the audit lottery and not file VFCP, but I will not help a client conceal compliance issues on the annual return. That was all I meant by do not make the clients problems your problems. As for the frequency of follow ups, they follow up on both small and large amounts so there is no "less than X and your safe or more than Y and you will get a letter". What does matter a great deal is the region.

Whether you correct or not, you still have the list the transaction on the 5500. It is not filing VFCP that prompts the letter from DOL, not the fact that you accurately prepared the 5500. VFCP is "voluntary" because you voluntarily bring the item for correction without them findingand making you correct. Voluntary does not mean that the correction itself is discretionary. If a client refuses to sign a return because it is accurately prepared and brings the clients misdeeds to light, I drop the client. Never make their problems your problems.

Ok then it should be pretty straightforward. All the platform vendors we have clients with send us information type emails all the time. Same with our software vendors. Every now and then, these include free webcasts that you can register for. It might depend on who in your organization is set up as the contact with the vendor, but anyone in your org should be able to register for the webcast. For example, Voya sends out their emails as part of their TPA support. Their webcasts fall under "Voya Financial TPA NAtional Webinar" JH sends theirs out through the TPA Essentials program. Do you get these type of emails from them?

I think the CPC study guide oversimplifies the issue. Generally, a nonperiodic distribution is subject to the 10% withholding rule because it is taxed in the year of distribution. This is not necessarily the case with with a 402(g) corrective distribution. The 1099-R instructions clearly state that "Corrective distributions of excess deferrals are not subject to federal income tax withholding or social security and Medicare taxes." Presumably, this is because the distribution is taxable in the year of the contribution rather than distribution, as long as it is distributed by April 15 of the year following the contribution.

What part of the industry are you in? TPA? Investments? CPA?

Yes. You don't get a pass on the Form 5500 compliance questions just because you don't file VFCP. The only magic number that makes you less likely to have the DOL take an extra look is $0. However, some regional offices are more likely to take an extra look and send a love letter if they see late deferrals on the 5500 with no VFCP. I have heard that Philly, Kansas City, and San Fran are the regions that are the most likely to follow up.

Short answer, yes they are included. Edit: Longer answer IRC §1372 - for purposes of fringe benefits, 2% S Corp SH is treated as a partner of a partnership. IRC §106 - Employee gets to exclude employer provided health coverage form gross income. Since the 2%SH is NOT an employee (partner per §1372 above), the 2%SH does not get to exclude it from gross income. Employer provided health coverage is included in W-2 Box 1, but not Box 3 or Box 5. Premiums should be listed in Box 14 (but I have seen a lot of preparers not list it). For some reason I think auto is included in Box 3 and Box 5 as well, but not 100% sure and I don't think it matters for our purposes. as @ERISAAPPLE points out, make sure fringe benefits are not excluded in the definition of comp.

TPA? Just curious as most TPAs I know pretty much always use the calculator, while all the atty's I know never use the calculator unless VFCP (and they almost always file VFCP).

Yes, they are not subject to withholding. I believe the instructions for 1099-R states it as well.

Enrolled Agent CE do not necessarily count for ERPA CE. It depends on the subject matter and focus of the CE. I confirmed the above with the IRS a few months ago when I researched low cost alternatives for CE. There are a ton of low cost EA CE, whereas ERPA CE is more limited due to the limited number of practitioners. For example, an EA CE class or webinar focusing on federal tax law unrelated to retirement plans, would most likely not get credit if the IRS were to audit your CE. Ethics for EAs and ERPA focuses mostly on Circular 230, so you should be safe with EA ethics as long as the topics can be applied to ERPA type situations. If its ethics regarding how to prepare a 1040, you should probably not rely on it for ERPA ethics CE. You can roll the dice on whether your CE gets audited, and you might be able to convince them to count the credits on a case by case basis, but I wouldn't risk my ERPA since I don't know if you can get re-activated now that the program is closed. I get all the CE I need from conferences, but I also stack up on free/cheap credits during the year so Im always well over the required minimum. I can normally get at least 10-12 hours for free from vendors during the year. On my calendar for the next couple of months: 2 free ethics credits from ERISApedia 1 free credit from Voya 2 free credits from JH 2 free credits from FT Williams / Wolters Kluwer Several of the vendor webcasts do not require that you have a business relationship with them, you just have to do some digging to find them if you don't get their partner emails.

How far can a participant push it? All the way! It is a very bad idea to ignore the participants directions. We had a pretty detailed discussion about it last year

Absolutely get a copy of the SPD. Even though I don't doubt what they told you is correct (but uncommon), you should always know what your rights and responsibilities are. Keep us posted.

I have seen a lot of pre-approved plans with the option of requiring a 1 year break in service, which could make a 2017 terminee eligible for a distribution after 12/31/2018. Or something like the last day of the year following termination...

@MarkGAllen just curious, do you make your own investment decisions in the plan?

Yes. It is less common nowadays with daily valued plans, but plans that are only valued once a year (usually the last day of the plan year) often restrict distributions until after a certain time has passed. The reasoning is that you are owed earnings for 2017 which would be calculated as of the last day of the plan year (lets say December 31). That calculation is done sometime 2018. the deposit of any 2017 contributions could be made as late as September 2018 if it is a calendar year plan.

I agree that if you allocate every payroll when your document says allocate annually you could have an issue, but if we are talking about a 3% SHNE as the OP states, it shouldn't matter. If it were a match and you allocate on a payroll basis, the difference could be significant. That said, there is a difference between allocate and deposit. Many plans allocate on an annual basis, but deposit on a payroll basis with a true-up at the end of the year. Its more of a cash flow management issue. The FTW compliance / admin module has a true-up feature that will calculate it for you. I don't think a mistake that misses someone here and there, which is later fixed, is a big problem. But if you only make the 3% deposit each payroll for the people who defer, and once a year for those who don't, you would have a problem.

We use it most of the time, even if we don't do VFCP. It is a calculated risk scenario. If you use the calculator but don't file VFCP, you run the risk of the DOL "disallowing" the correction if they ever look at it. For small corrections, the DOL will most likely not care (although they are getting really picky in some regions), and even if they do the cost of re-doing it will be fairly small.

Under the expanded PBGC program, unresponsive participants in a terminating DC plan count as missing.