SSRRS

Hi, Thank you as always for all the knowledge and help. A PS Plan is under audit. The agent is questioning why three participants (terminated in 2012 )are shown with 100% vesting if based on their years of service they should only be 60% vested. The answer is correct, their vested percent should only be 60% , however, the unvested amounts were forfeited and used to reduce the contribution back in 2016. Therefore, their remaining account balance is all vested and that is why the report shows them with 100% vested balances. Question- Can this response open up any potential issues? Thank you.

Thank you Nate. Instead of hitting reply to the email (as possible spam) I wrote a new email to the client and attorney that was requesting the information, stating that I was quite surprised to get a request a day before a due date, as usually you have been fair and reasonable and then in parentheses I wrote (unless someone hacked into your email). ...The client, other then this email, never informed us of this firm change. Seems they have their own way of doing things.

Lou your brilliance and analytical mind is much appreciated! Thank you for the heads up re the unpaid work. And your question re why they just woke up now, really paints the picture perfectly.

Thank you Lou. Much appreciated. Yes, it is quite unreasonable to request this in this manner. Can they claim they never got these documents originally? They did have an audit (thankfully closed with no change), and we provided copies of quite a few of theses items, so I guess they can't reasonably claim that they never received anything. However, can they have a claim that not all was received? Then again it is their word against ours?

Hi We received the following request from an attorney representing our client (10/31 year end) that based on the request it seems the client is leaving us. The Request was made Wednesday afternoon (yesterday). Are we obligated to stop all that we are involved with and interrupt our scheduled meetings etc to provide them with this information on this last minute request? This is the first time we heard anything about this. And can they truly hold us responsible for penalties mentioned below? Thank you very much for any insights on this. "We need the following documents today, because we have to make a filing by Friday. Please send today. If we do not receive the documents, "client" will hold you accountable for any penalties, interest charges and damages, so please deal with this NOW. Thank you DB Plan · Most current plan document and all amendments thereto (the document should have been updated by July 31, 2021. · Most current SPD · actuarial report for plan years ending 10/31/2018, 10/31/2019 & 10/31/2020 · census data for plan years ending 10/31/2019 & 10/31/2020 · 2021 AFTAP · latest PBGC filing · asset statements for 10/31/2020 through current date · List of contributions made to the plan between 11/1/2020 – current date (this should match what is shown on the plan account statements. · any sponsor election forms signed 10/31/2019 to date (e.g., election to utilize pre-funding) · \historical compensation data (the current actuary should be able to provide this for years prior to 10/31/20219 (this is needed to develop average compensation). · ARPA elections, if any · copy of the latest annual funding notice · copy of the last distribution form (e.g., the form for the last participant paid out). DC Plan · Most current plan document (the version we need would have been signed between May 1, 2014 and current date). · Most current SPD · calculation reports for plan years ending 10/31/2019 & 110/31/2020. The report should detail the contributions made for each person under the plan. · asset statements for 10/31/2020 through current date (if participants direct their own investment, we would need a copy of each participant’s account statements)

Thank you so much, Effen, Calavera, CuseFAN, and fmsinc. As always your insights and broad scope of knowledge are much appreciated.

also would you give an increase (actuarial increase) on the A/B from 1/1/22 to the 5/1/22 assumed payout date or just an increase from 1/1/22 to todays date? Thank you.

Thank you Effen. Since the participant is 67, the lump sum is less if calculated as of the payout date as opposed to the request date that was a few months earlier. Can a participant claim that if the payment was made quicker, he would have received a higher lump sum?

Hi, Thank you all for your insight as always. I'm involved with a few things at once and have gone blank on this topic. Participant age 67 retires and requests a lump sum (DB Plan). The retirement and request was as of 1/1/22. If the lump sum is actually payed on March 14, 2022 do you calculate the lump sum as of 1/1/22 and give interest to 3/14/22? Thank you.

Hi, A DB Plan at year end receives the following statement in regard to their plan assets: Levonte Capital Capital Statement 12/31/2021 Asset 1 -Howard Avenue $250,000 Asset 2 Clearstream 500,000 Asset3 Flushing Ave 600,000 Total Plan assest $ 1,350,000 Is this considered eligible assets for an SF? Thank you.

Thanks Jakyasar.

I hear

Thank you BG5150. So if someone is filing a day or two after 2/15 (IDA), you can take a chance and file without DFVCP and if a notice is sent, then can always amend to file with DFVCP? Thank you very much.

Hi, The above was an S CORP. How about a sole proprietor that has a plan and the only participants in the plan are the owner and his son. Should this be an EZ based on the new regs? Thank you very much.

Thank you Nate. Can we file and if need be amend and file with the DFVCP?

thank you Lou. You are correct. However, this year we are understaffed with people out due to illness etc.

C.B. Zeller , thank you very much. Do they actually go back from 10/15 to 7/31 or do they just hopefully charge for days late after 10/15? As if they enforce this and go back to 7/31, then it is impossible to file even one day late? thank you very much

Hi, Thank you in advance for any information or advice regarding the following. The late filing penalty for the 5500s used to be $25 per day. It seems that was increased to $250 per day. This is quite high in relation to tax returns that even if filed up to a month late the penalty is a SMALL percent? True, there is the DFVCP , that caps the penalty at 750, however, if someone files a day or two late, the penalty is 500? Thank you for any information etc regarding this.

Thank you Mike. Also to clarify that the main focus is that even though the val report shows that we are not covering 401(a)(26) for the plan year, and less than 40% are covered, however, the backing for this is that the plan is an underfunded and frozen PBGC Plan.

Thank you Jakyasar. I just want to clarify. The issue here is not the min req. contribution, as there is no min req contribution.. As the plan is only underfunded based on the PVAB in relation to the assets. However, the funding rates are higher than the 417(e) rates, that are used for the PVAB. Therefore, the liabilities for funding are much lower than the PVAB and therefore there is no min req. contribution. The issue here is that the plan is not covering 40% of all eligible employees - 401(a) (26). However, since this is a Frozen, underfunded PBGC Plan, the plan is exempt from 401(a) (26). Thank you.

Thank you! Your usual brilliancy us much appreciated. We would need to see if currently they have sufficient assets. However, it sounds that at least the Valuation is protected. Since as of the Val Date, if we use the PVAB calc above the plan is UNDERfunded by 300k. The Valuation of the prior plan year as well showed that the plan was underfunded.

Thank you so much Effen, and Jakyasar. Yes, correct, we were questioning on how the determination that this plan is underfunded is done. If the valuation date is 12/31/2021 (yr end val) since the plan as of the val date has not been terminated, and a "termination" would be done during the following year, during 2022, therefore, can the 417(e) rates used to determine the pvab be the rates as of 12/31/2021? Since this plan uses month prior for 417(e) rates? (if distribution made during 2022 then month prior to year 2022 is 12/31/2021). ---Thank you very much again.

This type of plan does not need to cover 401(a) (26). If running a 12/31/21 valuation and the lookback is month prior to plan year beginning (ie month prior to 1/1/21 is 12/31/20) for 417 e rates. Since the factor in determining if the plan is underfunded is "Plan does not have sufficient assets to pay all benefits". In Realty, the benefits would not be paid out until at least 1/1/2022. Therefore, can the 12/31/21 417(e) rates (month prior to 1/1/22) be used to determine if the plans benefits (PVAB) exceed the the assets? Thank you for any insight son this.

Thank you Lou. Yes, indeed there is no 401K law. I confused it with the New York State Secure choice. Where workers will be enrolled in the state-facilitated Secure Choice Savings Program in an automatic enrollment payroll deduction IRA. Only for employers with 10 plus employees, are in business for at least 2 years, and that don't offer a plan already. This IRA program seems to have been implemented? Thank you.

Hi, Was the bill that was going to mandate all employers to offer a 401k Plan to their employees finalized? Thank you very much.