Bob the Swimmer

ACM, because IRS is projected to have 165k ees--that is a surprising number for anyone who follows this closely. Be safe.

IRS will have more employees than the State Department, TSA, and one other government agency combined !

It could also apply if the final plan year was a short plan year.

I thought defn of EEs had to be US-based ? Not sure it's relevant what they're paid in. BOB

Peter--I was involved as an expert witness in a regional case that achieved some notoriety several years ago that involved not only NQDC plans, but qualified plans as well. Since then, we have been adding "bad boy" clauses to all of our 457(b) documents, and our Annual Incentive participant agreements also--- Turns out in the early 90s two different DC office clients' former employees had the chutzpah to steal from their employer, be fired , and then sue for the bonus they felt they earned for the previous year. It's obviously hindsight here, but protection is the best measure.

Agree with Lou--suggest you write a letter to the Service under IRC Section 6652(e) pleading reasonable cause. That Code section says "failure to file a return....required (under the various sections) " which this was not. We have not been denied in our 47-year history of filing about a dozen of these under various fact patterns.

With the new audit requirements, Peter is absolutely right and it would still be a number that would surprise many people due to the requirements added on this year to an effective audit. The CPAs still have their checklists that they have to follow regardless of how large the Plan is.

JAKYASAR--- Agree with points made--BTW, there are numerous articles out there on PTs-- If you look, I'd be surprised if you don't find several in the law review, benefits publications media. BOB

I agree with Bill and Peter wholeheartedly- I would also recommend documenting the heck out of your recommendations to them if it should escalate in the wrong direction ( before you prudently exit the stage).

I agree with Peter - you could also convert the 401(k) into a KSOP so that the dividends could be deductible to the Employer, if they are as significant as stated.

Quarterly vesting is somewhat common in the stock option area, particularly in Silicon Valley plans. Perhaps someone is misapplying that concept to retirement plans ?

We've had this situation before and the clients wanted to leave the insurance company but was locked in by the annuities. Then, the insurance company began a campaign of calling individual annuitants on the phone to get them to keep their accounts (which were fairly high fee and subject to a Ten-Year withdrawal pattern). I agree with what has been said, best to start a new plan and move forward with that--hard to believe that ten-year minimum withdrawal rules exists in this era of nearly instantaneous withdrawals.

Pennsylvania is one of the few states that taxes elective deferral 401(k) contributions at time of contribution. I once had an interesting conversation with a longtime Pa legislator who was involved in the enactment of the law.

I would agree with the posts. I’ve done a number of notary transactions in the January to March time frame and there should be little problem in most areas of the country .

We have a client in Houston with apparently several immigrants who were sold bogus ss no’s. The record keeper Fidelity notified us and we had to correct the record. Not as unusual as it should be today

There used to be a fairly thorough CCH or Prentice Hall practice guide on VEBAs 501(c)(9) trusts- if I were you I’d look up a couple of those resources as it’s a long essay answer - one pro is an accelerated deduction in certain instances for a few non-traditional benefits

Peter’s summary is very professional and as usual dead spot on. As a trust department head early in my career I thought disclaimers apply for estate purposes regardless of what the plan says based on estate and trust law- my memory from law school is that there is a uniform code of estate administration/ practices/ rules that can be adopted by the states but I could be having a senior moment.

No one has mentioned the 80-120 rule so far. Please see below as the information also applies to 2021 years. But wait, there is an exception…the 80-120 participant rule. This exception provides some level of relief for plan sponsors to avoid having to change filing categories. Included in the Department of Labor (“DOL”) Regulation 2520.103-1(d), “plans with between 80 and 120 participants (inclusive) at the beginning of the current plan year may elect to complete the current year return using the same category (that is, “large” plan or “small” plan) that was used in the previous year.” The Department of Labor (“DOL”) has graciously provided this exception in the instructions to the Form 5500. As it relates to the determination of the necessity of a 2020 plan audit, the DOL states, “if the number of participants reported on line 5 is between 80 and 120, and a Form 5500 Annual Return/Report was filed for the prior plan year, you may elect to complete the return/report in the same category (‘‘large plan’’ or ‘‘small plan’’) as was filed for the prior return/report. Thus, if a Form 5500-SF or a Form 5500 Annual Return/Report was filed for the 2019 plan year as a small plan, including the Schedule I if applicable, and the number entered on line 5 of the 2020 Form 5500 is 120 or less, you may elect to complete the 2020 Form 5500 and schedules in accordance with the instructions for a small plan, including for eligible filers, filing the Form 5500-SF instead of the Form

I seem to recall a problem with setting an early retirement age too soon---I've never worked with a plan that sets it that early in 47 years of practice---you might want to check with qualified ERISA counsel because something tells me it might not be kosher under a plan's definition as a retirement plan or profit-sharing plan.

Agree with writers---I'd amend "reasonable call" to be "reasonable cause" exemption under IRC Section 6652(e) and I have filed several of those successfully in the good old days.

Peter, as a Vanguard individual and retirement plan customer I did receive a notice of this impending change but no action was required on my part.

No, not really. It's the IRS' new form for independent contractors---we sent one to one of our vendors last week. Several other possibilities come to mind, but the broad heading would be for service providers that you pay for rendering services to the 401(k) plan.

IRS might and could, but it's a complicated facts and circumstances determination. I have been an expert witness in several dozen reasonable comp litigation cases. Several of my cases involved allegations of too-high total compensation for various reasons. Belgarath provided a great resource for you. The article mentions several cases but the seminal case as I recall was Mayson with the Mayson factors which are quoted under another case name in the article.

It's the new IRS form for 2021 if your business paid more than $600 to an independent contractor for services rendered.

Leevena, could not agree with you more, especially your last point. When I add this segment to a module I have taught on H&W plan administration, I begin by saying if you don't have a proactive broker who brings you new ideas and thought leadership, you're not with the right firm. Thought leadership is very important as the business is changing rapidly every year, and managing quotes to get the best package your company can afford are also very important.