SSRRS

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.

Thank you very much CuseFan and BG5150.

Hi, A DB Plan rolled the excess assets into a qualified replacement plan. Some one mentioned allocating the excess each year dollar for dollar. For example, if an employee's salary was 58,000 then you can allocate 58,000 of the excess for that year. Is this correct? Thank you.

Thank you BG5150 and Lou S. It seems that if this LLC (WITH 2 partners) was formed as an S Corp then it must file an EZ. However, if this LLC was formed as a C Corp, then it would file an SF.

Thank you. The only two participants are the two partners (LLC). Does this make them an EZ FILER, as owners or partners file EZ. Yes, for corps, only if it is an S Corp would it be considered a partnership for EZ purposes. However, this is an LLC? Thank you.

Hi An LLC Has a DB Plan with only the two owners in the plan. The LLC is taxed as a corporation (and not as a partnership). Do they file an EZ or an SF? Thank you

Hi, Hopefully all will be safe and well. The PBGC has shut down their site until 9PM 12/22. How can they close down during this period, when filings need to be done prior to 1/3? Thank you for any help with this.

Hojo so 401(a)(26) and 410(b) although they allow for inclusion of only 40% and 70%, (in proportion to the HCEs that are participating) however, it is to complicated to be used on a consistent basis?

Thank you.

Bird, thank you as always. I am going back to this to hopefully gain some more clarity. You seem to frown on this annual exhibit method to exclude employees. 1. If a sponsor wants to include only the minimum requirement of 40% of all eligible employees [401 (a)(26)] and 70% of NHCEs [410(b)], how would you recommend this be done (aside from excluding certain job classes) ? Thank you very much for any insights. ......

Thank you Mike. As always, you are right to the point. Is there any reason that the PBGC is making things unpleasant? Clients get very upset when they receive these notices and it's a waste of time etc.

Thank you. The clients that received late payment invoices, was their a mention of disaster relief on their forms that were filed?

Thank you, C.B. Zeller.

Hi, I hope all is well with everyone. The PBGC has been sending non filing notices for plans that were due 10/15/2021, even though these plans are entitled to the January 2022 IDA extension. Clients are getting upset. Any thoughts, insights, or advice would be much appreciated. Thank you !

JM thank you. Your insight and time as always is appreciated. As an aside, the term wear-away is an actual term. The below is from the Cornell law school site: (4) Fresh-start formulas - (i) Formula without wear-away. An employee's accrued benefit under the plan is equal to the sum of - (A) The employee's frozen accrued benefit; and (B) The employee's accrued benefit determined under the formula applicable to benefit accruals in the current plan year (current formula) as applied to the employee's years of service after the fresh-start date. (ii) Formula with wear-away. An employee's accrued benefit under the plan is equal to the greater of - (A) The employee's frozen accrued benefit; or (B) The employee's accrued benefit determined under the current formula as applied to the employee's total years of service (before and after the fresh-start date) taken into account under the current formula.

Correct.