RWPHoenix

That is my reading of the regs also. Thanks everyone for your assistance.

Maybe a dumb question, but if the employer actually credits the entire amount for past years in 2019 is there anyway it can legally treat the amount as FICA wages in 2019?

I have a situation in which an employer's NQ plan should have credited its COO's fully vested NQ plan account with a significant amount of employer non-elective contributions over the last 5-6 years. COO is still working for the taxable employer and the crediting failure doesn't impact how or when the non-elective amounts, once credited, will ultimately be paid to the COO. Client would like to credit all the past-due amounts into the COO's account in 2019. It feels like this is a likely 409A violation but I am having trouble identifying the violation since the error doesn't involve an employee deferral election or the timing or form of benefit payment. The error does, however, mean that Form W-2s issued to the COO showed the wrong amount of FICA wages in each year. Anyone have any thoughts as to whether and how the error violates 409A and how it might be corrected? Thanks.

Ellen, the thinking is to spin off only the segregated accounts from the DB Plan. David, I believe that the record keeping/maintenance of the accounts and their valuation is what is being audited.

I have taken over a non-governmental contributory multiemployer DB plan in which employee contributions ceased many years ago but with respect to which approximately 200 separate accounts still exist. The client has historically obtained a separate audit for these accounts. Audit and investment fees associated with the separate accounts are paid out of the accounts and the trustees are concerned that these costs are getting too high. The trustees would like to find a way to get rid of the separate accounts. My questions are: 1. Is a separate audit of the separate accounts legally required? 2. Am I correct that a contributory DB Plan is still a DB plan; accordingly, an in-service pre-normal retirement age distribution of a participant's separate account cannot be made available to such a participant because a DB Plan cannot distribute a participant's account before (1) the plan's termination, or (2) the participant's termination of employment or attainment of normal retirement age? 3. Assuming that the segregated accounts can't be paid to participants before their termination of employment or attainment of normal retirement age, can the DB Plan spin off the separate accounts into a new DC plan and then terminate the DC Plan and payout the accounts? Thanks in advance for any help.

I have a new client that has a safe harbor 3% non-elective plan that excludes NHCEs and HCEs of 2 of the three participating employers from making elective deferrals. The excluded employees are small in number and don't trigger a 410(b) problem and they do receive the SH contribution. I have never had a plan with this type of exclusion. I don't see anything in 1.401(k) -3(a-b) that prevents this but I thought I would ask if any one else has such a plan or an opinion on whether this works. The plan is a multiple employer other plan because two of the employers are related and the third is unrelated. The two employers with the excluded employers are small with 10 or so employees while the third employer has over 400 employees all of which are eligible to make elective deferrals. Although the plan says it excludes all employees of the two small employers, I suspect that there are no HCEs employed by these employers. Thanks for any insight you can give.

A t/x client just acquired another tax exempt that appears to have 3 different 403(b) arrangements with 3 different vendors. 2 of these arrangements have 1-3 participants each and individual annuity contracts are involved. The arrangements were frozen before 2004 and are non-ERISA plans. It appears (although I am not certain of this) that plan documents were not required for these arrangements as of 12-31-09. The question is how does the client terminate these arrangements since there is no plan to terminate? If the annuity contracts are between the employees/former employees and the contract issuers does my client need to do anything with respect to these arrangements? The contract issuers are saying that the employer needs to take no action - are the correct? The last arrangement had employee contributions made to it after 2005 and involves custodial accounts. There is no plan document (although there may be a custodial account application form) and I'm thinking a VCP is necessary to create a plan document retro to 2009. Am I off base here? The mutual fund company holding the custodial accounts doesn't maintain a pre-approved 403(b) plan and generally of no assistance.

Sorry I see the 5310 instructions state that a 6088 is only required for a DB or underfunded DC plan.

Is a Form 6088 still required to be filed with the Form 5310 for a terminating 401(k) Plan?