CuseFan

Depending on what provisions were amended, you could file for a document failure under VCP and ask IRS to allow the retroactive application, especially if the plan was operated in that fashion. However, if the amendment served to lower benefits or appears to favor HCEs, then the chances of that diminish.

As an aside, note that DOL has an initiative to make sure that plans are commencing benefits timely - i.e., that deferred vesteds are given opportunity to commence at normal retirement date, so waiting to try to locate missing participants when their RBD rolls around may not fly as a valid excuse in the future. This seems more of a DBP issue, but paying out accounts at NRD unless the participant defers is also a DCP issue. Personal opinion, since all ERISA plans are required to distribute annual notices of some sort to ALL participants, there is no reason that missing participants cannot be identified in a timely fashion and then search methods undertaken so that benefits can be paid when due.

Agreed - if you can fund while waiting then is the waiver really needed? The key is to able to demonstrate that the hardship necessitating the waiver is temporary and the prospects for recovery and making future contributions, including the amortized waiver payments, are favorable. if a waiver just postpones the inevitable distress termination (as noted by kc) and increases PBGC liability, then it won't be approved. The resulting funding deficiency (if contributions not made and waiver rejected) will save the contribution cost but not the excise tax, which can jump to 100% in year two. Finally, the user fee and the administrative costs for a funding waiver application are not insignificant, so all told, I would recommend applying for a waiver only if there was a high chance for success based on all the facts and circumstances. it is not the type of situation to test the waters to see what happens, in my opinion.

if this is contemplated to be offered as a fund in which rank and file participants can invest then I would raise the fiduciary red flag. If this is an owner only plan, go for it, I've seen worse over the years.

Maybe it's just on d-letter application questions, but all the IRS requests for information I've received say you can fax if it is less than 20 pages. For an agency that wants as many tax returns as possible to be paperless (e-filed), the IRS's Employee Plans division does not seem to be following suit.

check your spd or ask your plan administrator.

i believe IRS safe harbor definition says to repair damage to your principal residence but does not specify it has to be caused by a natural disaster. if failure to secure these repairs will make your residence uninhabitable and result in "eviction", you might be able to get some documentation from the local codes officer to that effect which might be sufficient for your Plan Administrator. Good luck.

assuming pay periods are not monthly, yes, you should amend so operation is in compliance with the plan document

If accruals are frozen then no top heavy. PPA/436 amendment must state what happens if/when a plan comes out of a restricted period - it can provide for resumed accruals, restoration of retroactive accruals, or continued suspension of accruals. If this what happened, it is statutory and compliance with plan document. However, as someone already stated, there is clearly a participant notice requirement under ERISA 101(j), within 30 days of the freeze. DOL penalties can be severe - see below. Unfortunately, I don't think any of this gets you a higher benefit, it will only punish the plan sponsor (rightly so) and likely delay completion of the plan termination - if it hasn't been completed yet. The DOL may assess a civil penalty of up to $1,000 per day for each failure to provide a 101(j) Notice. The DOL can implement the penalty for failure to notify any participant, alternate payee or beneficiary, and will consider the willfulness of the failure in assessing penalties.

The BIS/rehire rules relate to whether or not prior vesting service (not %) is retained. In this instance it is clearly retained because the person had a nonforfeitable right upon termination of employment (assuming no one-year holdout, or if so, already satisfied). Now that vesting service is restored, what schedule to apply? Now Tom's comment comes into play - if person had sufficient service to choose (or if not given choice then defaults to better schedule). If plan did not define YOS - really? must have been a very old plan - then look at current definition, because it must include service for vesting prior to the effective date of latest restatement. Of course getting hours from more than 20 years ago if that is how defined now is another story, in which case I'd make an educated estimate and go from there.

How can "Buffys Redrum" not be "old school"? But correct, partner is K1 - it's a sole prop for Sched C - and as kc notes, same concepts apply to both.

True - but does anybody do that? Seems like it would be administrative nightmare.

Correct, the only terminated people you must fully vest are those that are partially vested (haven't been paid out/forfeited) and have less than 5 years break-in-service. Good plan design will also deem any zero percent vested participants deemed cashed out (and forfeited) upon termination of employment, and you don't need to vest them either.

Agree YOP is based on how the plan document credits service. Other thoughts: Getting the full 415 limit also assumes he is at or past a normal retirement age of at least 62. Also consider, in addition to potential future 415 dollar limit increases, post-65 actuarial increases. These can be extremely valuable (and generate additional tax deferred contributions) - much more than fixed income returns and many equity returns, despite the "fact" (sic) we all know that doctors are experts at investing! if he wants to invest w/o the worry of how it impacts DB funding, so a post-62/post-NRA in-service (amend plan is needed), pay out and rollover a lump sum so invest more aggressively but continue accruals as long as he's working and has the money to fund.

http://rsmus.com/what-we-do/services/assurance/employee-benefit-plan-audit/party-in-interest-transactions-controls-for-benefit-plans.html The brother is not a part-in-interest to Plan A, so i don't think there is a PT. Since Plan A is an owner-only plan, the prudence of such investment probably doesn't matter either. But if Plan A acquires 40% (41%?) of the stock in Corp B, does that then create a CG? I don't know, but if it does you need to be concerned in B has employees. Still don't think a PT because then B stock becomes qualified employer security, right?

Yes it's 2016 pay, although there was a day (very early in my career!) when accrued compensation was able to be included for the year earned rather than the subsequent year paid, for those of us old enough to remember.

also, does the plan really say the match must be deposited on a payroll period basis or that it is determined on a payroll period basis - just because you calculate it on that basis so future deferral activity doesn't affect prior match calculation doesn't mean it has to be deposited before the legal due date unless plan specifically says so.

Yeah, and I'm the optimist in the family!

I know "one and done" politics won't work because the first half of the term is learning and the second half is arguing/jockeying for your agenda, and so it's the third half when things would actually get done - and I work with enough actuaries to know there isn't a third half. 10-year scoring makes sense for a tax expenditure but, as we all in the retirement industry know, not for a tax deferral. And where will all the tax revenue come from in 40-50 years when the majority of retirement distributions are tax free Roth dollars? Who cares, we'll let the next generation of post-millennials deal with that. Sorry, current politics has me in a cynical ranting mood!

single sum make-up payment with interest at plan's actuarial equivalent rate to the date of correction and then adjusted/corrected payments going forward, not rollover eligible and no other available elections - this is cut and dried.

Politics is all about what you do now to get re-elected, not what you do for the long term health and welfare of the nation. Killing small business retirement plans to generate current revenue at the expense of both future revenue - because it's a tax deferral - and the cost of increased future entitlements - because more people will retire into poverty - is short-sighted. Same with negotiating with unions on governmental plans, particularly post-retirement health, as politicians secure lower current wage increases for immediate tax savings but give away unsustainable future benefits and let future generations deal with it. These "kick the can down the road" policies are setting this country up for a huge generation and class warfare among four quadrants of citizens: wealthy aged, poor aged, self-sufficient youth and un/under-employed youth. Forget political term limits - make everything an extended single term so there are no re-elections, and mandate there must be a "term off" before running for a different office. Then we might get true public servants with the country's best interests in mind, not career politicians working only to stay in power. Unfortunately, "House of Cards" is probably very close to true politics in this country.

I think you are correct, and this is contrary to how certain "veterans" in the industry (self included) were brought up. Although, just thinking conceptually, this does make sense. You have an HCE excess in 2016, it becomes taxable in 2017, but instead of distributing it you allow it to remain in the plan as an after-tax contribution - in essence, you have allowed them to re-contribute it to the plan, so why wouldn't it be ACP tested in 2017? Unless you have an unusual design or testing results, I wouldn't anticipate recharacterized deferrals being able to satisfy ACP testing with existing match, but who knows?

I think it depends on the terms of the Plan. if this is an owner who is still employed/active, unless the Plan allows for in-service distribution after NRA (or age 62 if applicable), I don't think you have a distributable event until the RBD. If the person is separated, no problem. If not, and that language isn't in the Plan it can be amended. Also, the Plan could (if it has the provisions) commence the minimum annuity (50% J&S) beginning 4/1 and then provide a new annuity starting date upon actual retirement and allow a lump sum election if desired.

agreed, if the funds were timely segregated from employer assets and deposited - the timing of investment/trade is another matter and one which was apparently corrected so that participants were not harmed.

i would go the other way, to avoid a situation where the code is in and out of filings from year to year, but I personally don't think it matters because you can reasonably justify either answer and this is really just statistics the IRS/DOL is collecting year after year for our pleasure.