CuseFan

You don't give numbers - real or relative - but I assume can't be too large since TH. Be careful of coverage, which could require adding back in non-key/NHCEs, and partial termination vesting in addition to general TH issues.

as in what? it can be deposited by 1/1/2021, we've known that for a while. timing of deposit for 2019 tax deduction has not changed. sched SB timing has not been extended. i have not seen mention of potential further guidance or extensions, but i'm not as close to that as some others on this forum.

Also, not that it was a question asked - on what basis did the plan sponsor (and TPA) think it was OK to forfeit the vested balance after a 5-year break? You cannot force out benefits over $5,000 before normal retirement date so unless the participant was missing as of NRD when benefits were due to be paid, and the plan sponsor did a search, this never should have happened. I get that restoration with earnings makes the participant whole, which mitigates the damage I suppose - I assume this was not a participant directed account. It sounds like the plan sponsor knows this was not appropriate and is looking for the participant to essentially indemnify them. As MoJo said, can't be required and even if done voluntarily is likely not worth the paper upon which written.

Unless the DB formula was a safe harbor then yes, you have NDT (what is TRA offset?). The two non-Key employees that are in both plans would need to get 5% TH in DC assuming that plan provides the TH. You also have a combined plan tax deduction limit if they are professional services.

seconded

As Belgarath states, do not even suggest the back-dating of documents - illegal and unethical. How a RK or TPA cannot maintain a copy of the most recent signed plan document and subsequent amendments boggles my mind. How do you know you are administering the plan in accordance with the ACTUAL plan rather than your assumptions based on an unsigned draft? And that you are actually administering an updated qualified plan if you don't know for certain that it has indeed been adopted? Back in paper days, I can see not maintaining past versions once updated (and leaving that sole responsibility to the sponsor), but in the digital age there is NO reason that both the plan sponsor and TPA (and RK if separate) each has a signed copy (even electronically signed) stored electronically. And thinking "of course it was signed back in XXXXXX" is faulty reasoning because many a(n emailed) document gets buried in the mailbox, deleted, forgotten, back-burnered - take your pick - and is then never signed within the required time frame.

Plans can be as restrictive as they want in terms of limiting distributions up to the later of NRA or separation from service, but few are that restrictive.

Diversifying should be a situation you explore based on your individual circumstances at the time and preferably with the help of a qualified trusted advisor, and NOT based on what "everybody else" or "most people" do because most people often make the wrong decision and for the wrong reason, even if they get lucky with the outcome. This is not a decision to be made in a vacuum - you have to consider all your retirement assets and income sources, the company's health (which may not be so apparent), and a whole host of other retirement decision tree criteria.

As someone who worked in an actuarial practice that was part of an accounting firm (although I am neither), I am of the very strong opinion that those are quite different even though they may seem similar. This is why - look at the signature on the audit report, it says "PricewaterhouseCoopers" (or maybe now it's just "pwc") not the individual audit partner's name, whereas the Schedule SB is the individual's signature. When that individual changes, even if the firm does not change, I believe it should be reported, and I have seen it done routinely. Conversely, if you kept the work all along and went to a different firm or became self-employed, I do not think that is reported and again disagree with Effen, but less convincingly.

Right. They may not be benefiting with respect to the gateway requirement but they are not statutorily excluded and so count in your coverage and nondiscrimination testing denominators. If your combo pass coverage w/o benefiting these two then you need not give them gateway, but then must pass NDT with them as zeroes. Deferrals and match for them only matter in determining average benefit percentages, if needed.

As you note, you have zero average compensation for 415 purposes and where is the evidence of actual service? If it was an owner (not by attribution) who did not have net compensation because expenses exceeded revenue (but owner generated revenue) then I could see counting service. But if I'm an IRS agent looking at this, I'm thinking either the spouse was volunteering (and so not an employee) or maybe getting paid under the table, which opens all sorts of other scrutiny.

https://www.barrons.com/articles/altaba-stock-finra-yahoo-nasdaq-alibaba-delisting-51570551636 Yes, apparently delisted and in escrow pending liquidation, but certainly not valueless. Looks to be trading OTC but that fails to create public pricing/published FMV, but brokers could have pricing info. Agree with Bird's assessment.

Remember that this is (or should be) a negotiated settlement, so IRS will likely come in initially at the high end and the sponsor or its representative should be prepared (with evidence/facts, not simply narrative - we didn't know, thought TPA handled it all) to negotiate. If you can get half-way (or close) between initial IRS amount and the VCP sanction, I think that is a reasonably favorable outcome unless truly extenuating circumstances justify an even lower sanction. Good luck.

I would request PBGC make a determination. If PBGC says not professional services and plan is covered then the plan is PBGC covered regardless of what IRS might think.

If not frozen, you still have annuitized the prior balance, so it goes to zero. Each year's subsequent credit then gets converted to annuity and added. There is no subsequent interest credit because there is no beginning account balance - unless the plan weights current year contribution credits for interest. The only way you can draw down like installments from a continuing account balance is if installments are allowed by the plan and elected.

Also check the document. If you truly convert the balance to an annuity then the balance should go to zero and you only have the annuity (if plan frozen), or if not frozen, then each year's CB credit is converted into additional annuity benefit.

I agree, involuntary cash-out provisions can be added or deleted (especially if voluntary lump sum distribution is still available) - BUT, if the plan has not been cashing out under $5,000 balances as required by the document then you have an operational defect. Amending out this provision may eventually sweep it all under the rug, but they would be "exposed" to scrutiny for a few years.

So all eligible employees are subject to the same rate of match, correct? 0% on the first 3% and then 25% on deferrals above 3%. I think you are OK, even for BRFs. It would not fall under any safe harbor protections and would have to satisfy ACP testing which in a sense polices your effective availability - which is a facts and circumstances test.

If the plan allowed in-kind rollovers I expect the person could re-contribute back the shares, but depending on the current value when rolled back, they might not be able to redeposit all the shares (if value had increased) or avoid taxation (if value had decreased) because I think you have to consider the FMV as of each event - distribution and repayment. And if these were ER securities for which the net unrealized appreciation was being further deferred, that muddies the situation further.

I'm with Mojo and RBG, and once an employee is terminated, for what purpose other than plan communications would such e-mail be relevant?

CBZ is correct - you can exclude such items and be a safe harbor definition but it is an all or nothing choice, you cannot pick and choose among the excludable items.

Language is key - plan could allow for transfers or distributions, but must be at participant's discretion/election and not the employer's. Is that your issue or are you saying the plan only allows for transfers and not distributions for diversification? We have to clear on what the violation may be, if there is indeed one, to determine how to fix.

Peter, that is a great idea and something we've suggested but I have not yet heard of anyone asking for and getting a professional opinion letter from their accountant or attorney. I expect any such letter would be caveated from here to Wuhan, limiting any usefulness to a demonstration of good faith if needed in the wake of an adverse governmental interpretation.

CRDs are temporary, so no, you would not want to generally amend distribution timing unless you wanted to keep it that way. Just amend for CRDs by 2022 deadline, but be sure to do so in conformity with how the plan was administered, whether to the fullest extent of the law or on some other restricted basis.

And there could be other issues - if another plan or IRA that is asked to accept a rollover wants proof that the plan is qualified, or if a participant is filing bankruptcy and looking to protect qualified plan benefits from creditors. Having a FDL is not required but it is certainly advisable. That the prior TPA, rather than the client, is making the argument raises a big red flag to me - I would have a meeting with the client and then suggest you go over every thing with a fine-toothed comb.