QP_Guy

Hmmm, maybe you could get there, with some gymnastics... First, if the employer made an HSA contribution to all HDHP participants, and then a 403(b) employer contribution to all those who are not HDHP, that should work to avoid the deemed CODA issues. (Use individual allocation groups for the 403(b) employer contribution.) If you exclude HCEs from the mix, then you don't have any discrimination testing issues. Then you could 457 the same dollar amount to all the excluded HCEs. That's not precisely what you asked for, but it's dang close!

all the little details...a 2019 top heavy contribution would only be due if the keys had allocations in 2019, so there's another planning tool in your toolkit.

I would really appreciate our communities actuaries' analysis and citations around why a 401(h) medical account could not be used to purchase single premium long term care.

The OP asks "is anything final?", and FGC is of course right, "no" is the answer. But that doesn't mean there isn't something certainly to be done. I see two tricky situations: Operational choices that can be implemented now with reliance on the proposed regs; and Plan documentation trickiness if a plan chooses early implementation and then terminates. There will be some pre-approved doc requirement but seems like the earliest that would be required would be filing deadline for 2019 years, even for the "optional" 2019 provisions.

@Doc Ument thanks for reminding me i use those two terms incorrectly often. @ Kevin Very helpful. I somehow thought the general "anything you can do with two plans you can do with one" rule of thumb applied here. I guess this is a spot where a separate plan for new hires excluding Keys would be appropriate if the SH plan is top heavy.

Tom do you happen to have a good cite for this position? (surprised me a bit...i wouldn't have thought the restructured plan was a separate plan for SH purposes...)

My thought would be to try to find sufficient documentation to have Company A as a Sponsor/Participating Employer for Company B's plan. (That seems to clearly be the intent, perhaps there is enough documentation to satisfy the burden.) Alternatively, Company B could assume Sponsorship of the plan today. Under either approach go to VCP to get a blessing.

Carol a citation for that would be super helpful.

First answer: get an attorney to provide a written answer to the client. That said...we have to keep our eye on the disclosure ball: which disclosures are we thinking of? You mention participant disclosure so i assume it's the 404a-5 notices you are thinking of. If that regulation isn't satisfied, then the plan administrator doesn't get the advantage of the notice "safe harbor" fiduciary presumption of compliance. (see § 2550.404a-5 (a)) In other words, the 3(16) would have to prove that it somehow otherwise helped the participants to understand all the investments. This potential fiduciary breach cannot be corrected via VFCP. So, go forth and sin no more and hope for no litigation: the client would have no ERISA 404(c) protection, is subject to damages for the potential fiduciary breach (although i can't imagine those), and could get a DOL sanction just because. 408(b)(2) notice is interesting. You mention that your original service agreement envisioned no plan assets. Thus the "manner of receipt" of the TPA comp was likely disclosed as "billed to the client"; now it is being "deducted directly from the covered plan's accounts" (see 2550.408b-2 (c)(1)(iv)(E)). Thus unless you updated your 408(b)(2) notice, you may have to return that compensation received as undisclosed compensation.

Given the results, perhaps a suggestion around timing and structure of the sale of the company would be in order. In other words, maybe a 10/1 sale date with a "damn the testing torpedoes" approach is not best.

(any citation or because he's prettier than me?)

Gosh I’m such a nerd… Ok the mailbox rule under 7502 applies to filings and payments to the gov’t. (and tenuously to plans via private letter ruling, can anyone find a better cite than PLR 8536085? There is a reference in 310.7802A-1 that includes qualified plan deposits. But that doesn’t mandate including a mailbox rule for plan payments to institutions.) In any event these are all “mailings”. There is no “electronic mailbox rule”. https://taxpayeradvocate.irs.gov/Media/Default/Documents/2017-ARC/ARC17_Volume1_LR_02_EmailRule.pdf The essence of the mailbox rule is that once you put it in the mailbox, it’s absolutely positively going to go where you mailed it. You can’t by law stick your hand in the mailbox and change your mind. A payfile setup for ACH pull is not the same. Once the employer hits “submit”, he could immediately change his mind and undo his act. That is the precise opposite of the sense of the mailbox rule. If the mailbox rule fails, then the "actual receipt" rule applies. So IMHO, the contribution was late.

no need to get nasty... The participant's DON'T lose, their benefit is defined and protected. The employer violates the exclusive benefit rule if the employer makes benefit determinations based on the employer's best interest. ok, my turn to call "silly": no federal court ever created or dissolved a marriage. Therefore the existence of spousal benefits is exclusively determined by STATE law. Following the plan terms is my point precisely. The plan says pay spousal benefits. State court determines who is a spouse. How dare a PA challenge the court, not follow the plan (which will say to pay the spousal benefit), just to serve it own interests? Original poster says PA made a determination that the participant died single. The PA doesn't get to make that determination if the State court makes a ruling. In this case it made two rulings: first there is no marriage, second there is. The most recent ruling prevails. The PA could have relied on the first ruling if it had acted on it and could not "unring the bell". Those facts are present here.

the plan has to be brought current at time of termination. Restating is often the easiest way to do that. But your doc provider likely also has a "termination package" that includes all the most recent updated required language.

Our approach is to use the fringe to fund the DC part of the CB/DC combo. I think this is really different than the DC side. I guess you could design a CB plan formula to accommodate the Prevailing wage rules, but why? I quote from the DOL Prevailing Wage resource book: Again, it seems to work fine in a CB/DC combo, that's what we do...

IMHO, the PA has no authority to pick and choose which order of the judge it prefers (the order of dissolution or the order vacating the dissolution). Each order IS an order. Due to the rapid timing, the PA can't claim hardship or any other excuse to allow its refusal to honor the court's second determination. And what party will challenge the determination that the participant was married? No participants will suffer or benefit either way (since their benefits are defined); the Plan Administrator should take care that the decisions it makes meet the fiduciary standard EXCLUSIVE benefit of the PARTICIPANTS (not the Sponsor).

No. 71% still qualifies as "confiscatory".

Hmm, not sure if we have enough facts. The PE withdrawal could be a mere cessation of future contributions (full vesting, but not a distributable event); or, it could be a spin off plan that could then be terminated creating a distributable event. Another hmmm, the "for testing purposes" comment: unless plans pass 410b then they are aggregated for testing even if the Single Employer group member doesn't adopt the plan. 416 looks at 414 to determine the employer. From 1.416 Example 1. An employer maintains two plans. Key employees participate in one plan, but not in the other. If the plan containing key employees independently satisfies the coverage and non-discrimination rules of sections 410 and 401(a)(4), it may be tested independently to determine whether it is top-heavy. Also, the plan not covering key employees would not be part of a required aggregation group and would not need to be tested to determine whether it is top-heavy. However, if the plan containing key employees satisfies the coverage requirements of section 410(b) or the non-discrimination requirements of section 401(a)(4) only when it is considered together with the other plan in accordance with § 1.410(b)-1(d)(3), the plan not covering key employees would be part of the required aggregation group.

The other "gotcha" has to do with deduction timing for contributions made compliant via-11g amendments. As i understand the original facts, the contribution originally made to the HCE was not permitted by the plan terms. Allocations created after the plan year end via -11g amendment would NOT be deductible for the plan year they are allocated to. Rather that contribution would be deductible in the year the amendment was executed (the following year).

huh? A non-title 1 plan required to file SF? You'll have to help me understand more: what is the plan type and entity type?

The plan can certainly use DFVCP, from the DOL FAQ: Plan administrators are eligible to pay reduced civil penalties under the program if the required filings under the DFVCP are made prior to the date on which the administrator is notified in writing by the Department of Labor (Department) of a failure to file a timely annual report under Title I of the Employee Retirement Security Act of 1974 (ERISA). The IRS says in Notice 2014-35 that the only requirement for IRS penalty relief is qualification with the DFVCP requirements. Thus the IRS notices don't count. Now, maybe the client DID get something from the DOL...but if not, hurry, do DFVCP and then the penalties will be waived.

Wait. I think we must distinguish between a plan that used to be an EZ and now no longer qualifies and a EZ filer that is merely choosing to file his "one-participant plan" using EFAST2 and the SF form. From the EZ instructions: "A one-participant plan or a foreign plan may elect to file Form 5500-SF, Short Form Annual Return/Report of Small Employee Benefit Plan, electronically with EFAST2 rather than filing a Form 5500-EZ on paper with the IRS." "One-participant plans and foreign plans may satisfy their filing obligation under the Code by filing Form 5500-SF electronically under EFAST2 in place of Form 5500-EZ (on paper)" This seems to better fit the facts of the original question. i would not check the "first year" box in that we are not changing the "one-participant" status of the plan. In other words, the 5500-SF with the "one-participant" box checked is the 5500-EZ.

My reading says it's a two pronged test: 1. subject to US courts; and 2. controlled by a US Person. US Person is defined in 7701(a) (30) United States person The term “United States person” means— (A) a citizen or resident of the United States, It would seem that an E-1 "Treaty Trader" would not qualify as a resident. So, the "control" of the trust must be by US persons, and E-1visa holder is not.

The church did not have to follow universal availability. But they did have to follow their plan. Being a church doesn't mean you get to disregard plan provisions. So we're back to what would we advise any Sponsor who improperly excluded eligibles: QNEC under EPCRS.

IMHO it's only about the DOL. Commissioned business has a different burden than before, and the BDs are driving RKers to provide fiduciary solutions. That's because retirement business, and commissioned business in particular, is very very hard to supervise. So the BD requires outsourced fiduciary or documented fiduciary services to meet the financial institutions' DOL burden of "establishing fiduciary policies".