RatherBeGolfing

I agree with the above, I don't think it is has to be goodbye safe harbor. You have an unenforceable clause in the employment agreement and an operational error in the plan that can be corrected. Going forward, look at a proper exclusion in the plan document if possible. They made a mistake in the employment agreement and now they get to pay up for not checking with their plan expert first.

Section 318 makes it clear that a spouse of an HCE (because of ownership), is also an HCE due to attribution. A spouse of an HCE who is not owner (compensation test) is not an HCE unless the spouse also happens to satisfy the compensation test. So you could have a non-HCE spouse of an HCE. Without aggregation, under what mechanism is the spouse of a non-owner HCE also an HCE (Assuming the spouse does not also satisfy the compensation test)?

Absolutely, the spouses can't be included unless they are also employees. As for 1.414(q) Q&A 11 and 12, they deal with family aggregation (rather than attribution) which would only apply to pre-1996 plan years due to SBJPA. Right?

You should look up IRC §318.

Employee (and thereby participant) is defined by the Code, so however creative you try to get in your document really wouldn't matter.

The most simple answer I can come up with is that a plan has to be maintained for the exclusive benefit of employees and former employees (the exclusive benefit rule), and what you are proposing would violate that very basic premise.

HA! I have been thinking of asking Dave to add some sort of "ping" feature but it appears he already thought of it!

ASPPA Net and NAPA Net news bulletins usually have a few good reads, free if you are a member but not sure if you necessarily have to be a ASPPA or NAPA member to get them.

I think you can successfully argue both dates. But in theory, in order to terminate on 1/1, wouldn't it also have to be active on 1/1? If we terminate on 12/31, lets say at the very end of 12/31, the plan clearly starts 1/1 as terminated and your count is 99. If it does not terminate on 12/31, it has to start 1/1 as active, right? Technically the count would be 200. I don't think the IRS would ever argue it this way but 12/31 makes more sense to me.

12/31

Im not sure you will see anything on the IRS site about the law change since the IRS relief is different from the legislative relief.

Perhaps it is good news that the practitioner did not make an error in making the participant take a taxable distribution from the plan?

Its fine, unless the document states otherwise.

FWIW, I just came from a local "benefits round table" and one of the ERISA attorneys I spoke to said that these are absolutely regional initiatives that are spreading. This would make it even more concerning than rogue auditors since they would be acting on orders from higher ups. One of his examples included refunding not only fees and expenses like MoJo has discussed, but also investment losses. The idea being that the account would not have suffered those losses if distributed timely.

Happy to help :)

Creating small balances can be a pain, no question about it. But it really doesn't change the fact that the forfeiture needs to be used, either for fees or as an allocation. Where it really causes an issue is where you have top heavy plan that relies on the exemption. Having to allocate thousands in top heavy minimums because of a few hundred in forfeiture allocations can really sting...

Yes and no. If the client qualifies for relief, non-safe harbor contributions can be deposited by January 31, 2018. However, the deadline for safe harbor contributions is still 12 months after the end of the plan year, or December 31, 2017 for a calendar year plan. This prior thread has some good answers to your question

You wouldn't have to bill the entire expense in advance. You would just bill enough to use the leftover forfeiture. I still favor a contribution equal to the forfeiture amount, as long as it doesn't cause top heavy issues.

There should be language in the document stating when forfeitures must be used. It will probably state something along the lines of "no later than the year following forfeiture". As discussed above, you can allocate just enough use the rest of the forfeiture, but you can't use a $0 allocation to keep from using the forfeiture. This shouldn't be an issue as long as you are not relying on "safe harbor only" to be exempt from top heavy rules. Another possibility could be to send the client an invoice for next years work now. While not official guidance, the IRS did say at a conference Q&A a few years ago that if invoiced and paid in the year when the forfeiture needs to be used, it could be used to pay for next year's expenses.

The IRS would disagree.

My bad I meant fiduciary not participant, this is 408b2 after all. Check MoJo's detailed answer in this thread He explains it much better than I can recite it from the beach on my day off

Very possible. Of course, simply getting all the information into the disclosure might not be enough if it isn't understandable. I believe MoJo has shared some stories on how in depth the DOL is getting when looking at the disclosures, and looking at whether the participants understand whet the disclosure means rather than just technically correct...

I can't speak to the merits of the designation, but I have had a few run-ins with people holding the designation and they have been nightmares. In those instances, the CDFA wouldn't know a QDRO if it bit them in the ass and they failed to comprehend the difference between Plan Administrator, RK, and TPA. Edit: It is entirely possible I just had the misfortune of dealing with the bad apples, but my limited exposure has been pretty bad.

Yes. No. The instructions say to not include contributions designated for 2016 in column (1), which is the beginning of the year assets. 2016 contributions are included in column 2, which is EOY assets. No. They are included in 7a-c and 8a-c.

Disaster Tax Relief and Airway Extension Act of 2017 (H.R. 3823) ASPPA NET article