RPAS

Correct. You would need to add a separate amendment if you want to allow loans outside of the CARES Act loan since they are separate features.

The CARES Act states: "TREATMENT OF PLAN DISTRIBUTIONS.—If a distribution to an individual would (without regard to subparagraph (A)) be a coronavirus-related distribution, a plan shall not be treated as violating any requirement of the Internal Revenue Code of 1986 merely because the plan treats such distribution as a coronavirus-related distribution, unless the aggregate amount of such distributions from all plans maintained by the employer (and any member of any controlled group which includes the employer) to such individual exceeds $100,000." Therefore the hardship withdrawal is not an issue for your employee.

It is up to the plan sponsor to offer this feature, it is not required, however.

The ARA wrote a letter to Congress on March 16th, 2020 requesting an automatic extension to October 15th for 5500 Series. They are waiting for a response.

They cannot take the loan unless it is for coronavirus related hardship. If an employee was terminated before the date of the enactment of the CARES Act, they would not qualify for the distribution unless they are experiencing financial hardship as a result of the virus. So, if they were laid off before 3/27/2020 because of the virus, they could apply for the loan. For employees terminated before the virus crisis, they would not qualify for the loan. All "rules" of distributions and loans are not applicable to this distribution, per the CARES Act. "(B) TREATMENT OF PLAN DISTRIBUTIONS.—If a distribution to an individual would (without regard to subparagraph (A)) be a coronavirus-related distribution, a plan shall not be treated as violating any requirement of the Internal Revenue Code of 1986 merely because the plan treats such distribution as a coronavirus-related distribution, unless the aggregate amount of such distributions from all plans maintained by the employer (and any member of any controlled group which includes the employer) to such individual exceeds $100,000."

Hi! It is up to the plan sponsor to offer this loan feature, therefore, your client can choose not to allow for this type of distribution feature to be added to their plan if they have concerns about repayments. Veronica Bray Managing Partner RPAS

Hi! Does your plan allow you to take a hardship withdrawal? Hardships can help with medical bills and you can submit the bill for your dependent for proof of hardship. That may be one option. At the end of the day, if your employer failed to set up your loan in the payroll, they are liable for correcting it. You could tell your employer you intend to call the Dept of Labor and let them know that the employer, as ERISA administrator, failed to monitor the plan to determine if the loan was being repaid, and therefore breached its fiduciary duty. They may change their tune then.

You can use forfeitures for audit fees, advisor fees, and other plan related fees IF the plan document has this written in it.

This is document driven meaning whether or not they allow you to get in the plan mid-year is a plan document decision. If they are saying they cannot let you in mid-year then your plan doc has that provision.

Best practice and "cleanest" process would be to do the QNEC on the deferrals, missed match and true up for any missed market earnings. The employees should not have to suffer from what could be large deferral amounts from one or more paychecks due to a payroll error. They are missing out on the tax savings from these missed deferrals, which is why it would be best practice for the company to take the hit vs. the employee.

If this is an issue, why not outsource the Trustee to a 3rd party Trustee service? This way, your organization can share responsibility with a 3rd party who is another "eye" over the plan operations, and you won't have to change your CEO and CHRO on the documents each time.

I have not seen issues with starting a plan in December (non-Safe Harbor). Make sure you give everyone the required notices within the specified time periods!