RatherBeGolfing

I doubt it will be repealed, but it will probably be delayed and modified. There is nothing earth shattering about that. If memory serves me right, GWB's DOL had a a fiduciary rule all but ready when O's DOL scrapped it and started over. I expect some changes, but this is the way the industry has been trending anyway. There are some sections of the rule that I'm sure some will be thrilled to do away with though.

You are welcome :)

It is not a controlled group. Since Joe is 100% owner of A, we look at Joe's ownership in B. We need 80% common ownership to be a controlled group. We do not. Had we had 80%, we would have moved on to see if we also have 50% identical ownership, but we don't have to take that step.

No worries, it was always beaten into me that that a plan account should have a plan EIN rather that employer EIN (speaking of pooled or SDBAs). You guys solve it by outsourcing the withholding and 1099/945 reporting so it seems that it wouldn't be an issue for you since you clearly separate the employer and the trust that way. I really think it is a non-issue unless they decide to require it on the 5500, or if you do withholding and reporting for the trust (1099/945).

It sounds like it. We do withholding as a batch submitter for our clients (and 1096, 1099, 945) so we need an EIN for anyone not on a platform. For your pooled or SDBA clients, what EIN do you use to establish the trust account? Also curious what you would do for your non-platform plans if the IRS revives their "list the EIN of the trust" question on the 5500,

Nope, we only get them for plans that are not platform, like pooled or SDBA plans. You don't need to "sign" as the employer. you still just get an SS-4 and keep it on file. Then go online and identify yourself as the third party with authorization, answer a few questions, proof read your answers and hit submit. Bada-bing bada-boom, you have the EIN for the trust. I just did one today for a new client.

But is it allowed? I'm sure its a major pain, but if it isn't prohibited I don't see why the payroll company shouldn't correct it. You may have to pay for it if you didn't fill out the correct check boxes but it would solve any plan issues. And if they refuse, get a new payroll company. On second thought, I would probably get a new payroll company either way.

This is the part I'm struggling with. From what I'm reading the payroll company's involvement with the plan is limited to producing the W-2, is that correct? I'm not in HR or payroll but is there some law or regulation that prevents the payroll company from correcting a mistake in the payroll? For whatever reason it sounds like it just wasn't set up right on their system, but I don't see why that can't be corrected.

Good for you! Unfortunately for me the FTW document leaves no room for interpretation or I would be tempted to do the same as I think the language of the proposed rule gives the green light for 2016 (and we certainly do NOT have more ERISA attorneys on staff than, well, anyone)

Worked for me too

Pay the participant $3,000 as a rollover (because that is what the participant should get) Issue a corrected 1099-R to "zero out" the mistaken 1099-R with code 1 Issue a new 1099-R for $3,000 with code G Go through the trouble to get the money back from the IRS

Participant already selected the option he/she wanted based on his/her retirement needs and overall tax situation. The service provider screwed up, and now needs to correct it by making sure the participant gets his or her full rollover. Why would the participant have to accept something he/she didn't want because the service provider screwed up?

Is the plan set up through the payroll company, or are they just doing the payroll?

I'm having so much fun with calculations that I had to do some reading on this as well. EOB pretty much agrees with Tom's notes it looks like (Ch. 3B - Part 2 - Section IV - Part A - Item 5). The highlights from the section: There is not a specified due date for top heavy contributions In order for the contribution to be deductible for a particular tax year of the employer, IRC §404(a)(6) requires that the contribution be made no later than the due date (including extensions) for filing the federal income tax return for such tax year. Under the IRC §415 regulations, an employer contribution is generally treated as an annual addition for a particular limitation year if it is actually made no later than 30 days following the due date (including extensions) of the federal income tax return for the employer’s taxable year in which the limitation year ends. See Treas. Reg. §1.415-6(b)(7). Use deduction deadline or IRC §415 deadline as informal deadline. If the two deadlines discussed above are used as an informal deadline, then top heavy contributions made after such dates should include an adjustment for lost earnings. A reasonable approach is to use the IRC §415 deadline if the employer has not made the contribution for any non-key employees and to use the deduction deadline if the employer has missed one or more, but not all, non-key employees in making the top heavy contribution. This approach also would be consistent with a reasonable approach for making employees “whole” through the self-correction mechanisms under the EPCRS program. In the latter case, the earlier deadline is used because other non-key employees had the benefit of the contribution by such deadline for earnings purposes.

I would say yes. I buy the last day of the plan year for a discretionary amendment, but I have seen no compelling argument why forfeitures cant be used for 2016 IF the document contains language that would not need to be amended. It is no news to the people who draft these proposed regs and rules that every word and sentence matters. Absent specific guidance from the IRS saying 2016 is out even if your document allows it, it is absolutely a good faith interpretation of the proposed rule.

So now we have: FTW - Amendment needed and forthcoming. First year applicable 2017 for calendar year plans. FIS - Amendment needed and forthcoming. First year applicable 2017 for calendar year plans. Anyone have anything from another major provider?

And any clarification from the IRS will probably come after we have done all of our 2016 calendar year plans...

No worries. My reading (and I believe MoJo came to the same conclusion earlier with the plural language but I can't see the post on this page) doesn't matter much if your document is written to not allow for forfeitures to fund safe harbor, or if the amendment to include it is specific as to the periods. My provider is taking the position that 2017 is in because of the publication date but 2016 is out because the plan year ended before the proposed regs were published. So at this point, I still can't use it because my documents are more restrictive than the proposed regs. Im still holding out hope that FTW will change their position or give us a reasonable explanation, like conversations with the IRS clarified the opinion or something like that.

That sentence alone means that it applies to taxable years beginning on or after the publication date of the final reg. Calendar year plans begun before the publication date of the final reg and would be out of luck until 2018. That is why the second sentence is just as important You may relay on the proposed regulations for periods (plural, meaning not just 2017 when the proposed reg was published) preceding the proposed applicability date. You could read that sentence to include 2017 for calendar year plans but since the language is plural, why should it exclude 2016?

Yep that is my issue with the FTW interpretation as well but they have been very firm on it both in my correspondence with them and the technical update. Unfortunately most of the 2016 work will be done by the time the IRS will issue an answer to the comments so we are kinda stuck it seems...

The proposed regs also say (my emphasis in italics)

It is anything but black and white. There is a current thread on it over Here

Just thinking out loud here... I don't think it is a "late deposit" because it did become a plan asset within the time limit. The fact that it was not allocated to the EEs is a different problem,. but it isn't a late deferral. How hard is it to see what it would have earned had it been allocated correctly?

I agree with what Tom said above. An additional quirk that was brought up in a somewhat recent discussion on this is to make sure that you are 100% clear what your document provides when you change eligibility. Some documents might say that current participants stay in unless expressly excluded. Depending on your type of document you would probably have to dig around in your basic plan document to find it, and then structure your amendment to get the result you want.

Are you threatening the IRS with sharks with frickin' laser beams attached to their head????