C. B. Zeller

I agree with Bird. It sounds like the agent is on a fishing expedition. The sponsor is not required to retain proof that the notices were handed out. I would tell the agent that the notices were delivered by hand (or however they give them out) on approximately whatever date and leave it at that.

I do not know if there is a prescribed method, but I would think it should not be less than the amount that would be required for the plan to have passed the ADP test each year. Were you planning on self-correcting? Given that the failure spanned multiple years and involved 100% of the eligible NHCE population being excluded from the plan, I think this points to a significant failure which would have to be corrected under VCP.

Since you asked not to research it, I won't look it up, but if I recall correctly Notice 2016-16 prohibits a mid-year change to reduce the safe harbor formula. Since the change in the way the match is calculated could result in a smaller match for some people I think it would be prohibited. If the amendment requires the sponsor to true up the match at the end of the year, I think that would be ok. It would in essence just be changing the timing of the contribution, which I don't believe is protected.

This wasn't explicitly stated, but assuming OwnerCo is a corporation? Owner receives a W-2 and not self-employment income? You cannot "treat" deferrals as catch-up by election; you have to exceed a limit. $20,000 exceeds the 401(a)(30) limit by $500 so we have $19,500 deferrals plus $500 catch-up. $19,500 deferrals + $5,500 PS = $25,000 which exceeds the 415 limit (100% of compensation) by $3,000 so another $3,000 of deferrals can be reclassified as catch-up. Ultimately we end up with $16,500 deferrals + $3,500 catch up + $5,500 PS = $25,500.

To nitpick the terminology a little: plans are not part of a controlled group. Employers can be members of a controlled group. I assume what you meant to say is that employers A and B are in a controlled group together, they each sponsor their own plan, and neither plan covers employees of other members of the controlled group. Members of a controlled group are considered a single employer for most purposes. Therefore the employee who left company A and was hired at company B has not experienced a distributable event because they have not had a separation from employment. The fact that they are no longer eligible to participate in company A's plan does not make it a distributable event.

I'm not sure. The weird thing about this extension is that the amount due is increased using the effective interest rate not for the plan year to which the payment applies, but for the plan year which contains the payment date. If you make the contribution after the regular due date but before the end of 2020, then you will need to know the 2020 effective interest rate in order to apply it to 2019 minimum funding. However the 2020 EIR would not appear anywhere on the 2019 schedule SB. Not that you couldn't describe it in an attachment, but it just seems funny to me. For that reason I think it might be better shown on the 2020 schedule SB. For now I am thinking of this extension as more of a waiver of the sec. 4971 excise tax and PBGC reporting obligations, which helps me feel better about potentially showing a funding deficiency. I agree that we should wait for more guidance on this, to the extent possible. Presumably the filing deadlines have already passed for some plans which are taking advantage of this extension - how have they handled it?

Same here! But I would rather have been wrong and know it, than be maybe right but have no idea.

That is not a correction described in EPCRS. Mistake of fact is generally reserved for minor arithmetic or typographical errors. In this case the arithmetic was done correctly in calculating the match; the error was in applying the plan document's provisions.

I think the plan administrator is right - the benefit was paid in 2019. Whether or not the participant cashed the check is irrelevant. Was a 1099-R issued?

The popular consensus seemed to be that it would not be permissible. However I don't think there has been anything official one way or the other.

It applies to all types of plans. However it only applies to tax years beginning after 12/31/2019.

No. SECURE removed the notice requirement for the ADP safe harbor of 401(k)(12) and 401(k)(13) but did not remove it for the ACP safe harbor of 401(m)(11) and 401(m)(12).

No. Borrowing is only available to satisfy ACP if the 401(k) portion of the plan is subject to the ADP test. See 1.401(m)-2(a)(6)(ii) No need to switch ACP to current year testing, unless they want to.

Getting a little off topic - I work mainly with CB plans so forgive me if this is a silly question - but if a plan defines the stability period for 417(e) as the calendar month, and you have to give the participant 30 days to consider their distribution options, then how do you ever get a valid election form into the hands of the participant? Won't the lump sum always be different from the amount illustrated due to new segment rates being issued while the participant was reviewing their options? To bring it back on topic - assuming that the answer to the above question isn't to provide an entirely new set of disclosures every month, doesn't that imply that the plan should have some way of dealing with the fact that lump sum amounts will fluctuate based on timing?

Would it be an option to retroactively amend to provide 100% vesting on death?

I agree the participant could have elected to postpone commencement, but if I'm understanding the situation correctly, it sounds like the participant agreed to a certain benefit date, received payment on that date, then changed their mind after the fact. Based on that fact pattern I would say it's too late. The IRS said (last year, I think) that once the plan cuts a check the benefit is considered distributed, regardless of whether the participant cashes it.

There is a section in the instructions for the 5330 titled "Claim for Refund or Credit/ Amended Return." I would start there.

If the loan offset was a qualified loan offset (due to termination of employment) code M should be used in addition to code 1 or 2 as applicable.

Another one that might apply on an annual basis is an ERISA 101(j) notice for a plan that is subject to benefit restrictions due to its funded status.

Let's make a list. A lot of them are conditional depending on plan design. SAR (if not subject to Title IV) AFN (if subject to Title IV) Benefit Statement (4x per year if participant-directed DC plan, 1x per year if not participant-directed, 1x per 3 years if DB plan) For a participant-directed plan, the benefit statement might include the additional information required by ERISA 105(a)(2), or it could be furnished in separate notice(s) Safe Harbor Notice (if a safe harbor 401(k) plan) QDIA Notice (if plan uses a QDIA) EACA Notice (if an EACA) QACA Notice (if a QACA) What else am I missing?

The CARES Act provides that a Plan Administrator may rely on the participant's certification that they are a qualified individual in determining if any distribution is a CRD. Therefore, the participant may certify that they are a qualified individual, and the plan may treat the distribution made in January as a CRD, and accept it as a rollover. The CARES Act does not require the IRS to rely on a self-certification; the individual must in fact be a qualified individual in order to exclude the amount of the rolled over distribution from their income on their tax return. In this situation, my advice would be: If the participant is a qualified individual (as defined in CARES), and has not otherwise used up their $100,000 CRD limit, then proceed as Larry suggests. If they are not a qualified individual, then wait and see if the HEROES Act passes, since it will allow the rollover to be done without any workarounds. If HEROES goes nowhere, sit tight. The IRS may announce new qualifying factors which could make the participant a qualifying individual. Failing that, there is no time limit on when the participant may make the certification as a qualified individual; if circumstances change any time before the end of 2022 they can still certify and roll the amount of the distribution back into the plan or IRA.

The HEROES Act contains this relief. It waives the 60-day requirement for rollovers of distributions which would have been RMDs if not for CARES/HEROES until December 1, 2020. The bill was passed by the House but is still pending in the Senate.

I would just remind them that retirement plans must be intended to be permanent (and not a shelter for a one-time windfall), and contributions to a profit sharing plan must be substantial and recurring. As long as they are ok with making some other contributions in some future years it should be fine.

If it's within the 2 year period then an operational failure can be self-corrected regardless of whether it's significant or insignificant. An insignificant operational failure can be self-corrected at any time. I don't know if the failure is significant or not based on the info presented.

There are 2 ways to correct this under Rev. Proc. 2019-19: Treat it as an excess allocation. Move the amount (adjusted for earnings) to an unallocated account (aka suspense account) which must be used to reduce future employer contributions. The employer may not make any further contributions to the plan, other than elective deferrals, while money remains in the unallocated account. Retroactively adopt an amendment making the employee eligible as of the date they began receiving contributions. This is only available if the employee is NHCE. It doesn't matter if the failure crossed more than one calendar year or plan year, as long as it is not beyond the end of the second plan year after the year in which the failure occurred.