Jeff Hartmann

I don't work much with plans requiring an Audit, but I am wondering if Audit reports always recognize ALL deposits of contributions receivable, or are they mainly concerned with the Assets already physically there at the end of the plan year?

The key advice now is to WAIT for guidance from IRS on this. Extend your filing deadline (from July 31 to October 15), if this is not done automatically by IRS announcement in June or July. With funding deadlines later than October 15, 2020, IRS has to give some relief in the deadline for filing 2019 Schedule SB to at least 1/1/2021 (if not the end of January 2021). It would be crazy for IRS to do nothing, forcing us to show "Unpaid Contributions" as of the filing deadline that are actually not due until later. For any plans that do file a 2019 Schedule SB before the extended Funding Deadline, showing an Unpaid Contribution , I think they should be filing an AMENDED 2019 Schedule SB after the minimum funding has been completed before the extended 1/1/2021 deadline. The 2020 Schedule SB should not be showing any Unpaid (2019) Contribution if the 2019 contributions were timely deposited before 1/1/2021. .... Jeff

I have seen several instances of immediately starting a new DB plan the year after the old plan "strategically" terminated. There was no attempt to "double up" the 415 limit .... Typically, the old plan had fixed interest credits and the new plan has design changes, such as Actual Rate of Return. .... Jeff

When you say "preparing for their 5500 audit", when was this SAR due ? (Are you talking about LAST year's SAR?) .... Jeff

What else is new "As of yet there is no guidance ........ " In the absence of guidance, I drafted my own simple Election Form for a few of my plans that otherwise would have decreased their AFTAP 10%, below 80%, on April 1, 2020 .... to avoid the requirement to send Benefit Restriction Notices in April (not withstanding possible Notice relief given by DOL on the day that AFN's were due). In my election form, I made the election automatically "revoked" if the Actuary issues a subsequent 2020 AFTAP. I hope "guidance" does not prohibit doing that. .... Jeff

CARES Act says "...... a plan sponsor may ELECT ...... "(to use the AFTAP for plan year ending in 2019). I don't believe that AFTAP certification has been "waived" if there is no such election made. Absent any election, I think that June 30, 2020 is your AFTAP deadline. I think it would be risky to wait until AFTER June 30 to certify AFTAP or make the election to use prior AFTAP. ..... Jeff

My understanding is that you need to file 5330 return for each year 2017, 2018, 2019. You may have to also file for 2020, depending on when/how the correction was made. .... Jeff

<<The goal is to maximize the owner’s contribution. In order to do so, the terminated eligible participants require an allocation to pass non-discrimination. >> Though I am not a Testing expert, I question whether you can use current year allocations (non-vested) that are fully forfeited in the same testing year, in order to "pass non-discrimination" for that same year. In our company's testing, we ignore such allocations. ..... Jeff

If properly drafted, the Standing Election should be sufficient to preclude any need for a new election. Our Standing Election forms say, in part: "The Plan Sponsor is hereby providing a Standing Election to the plan’s Enrolled Actuary .......... to apply all or a portion of the plan’s funding balances to offset the minimum required contribution for any plan year under Code section 430(a), to the extent needed to avoid an unpaid minimum required contribution .......... " Such an election would apply exactly 100k of the prefunding balance in your example. ...... Jeff

To answer your questions ......... My understanding is that 1. ALL employees are included. The 2nd bullet point above seems to say "ignore the Union employee exclusion" in 410(b)(3). i.e. count them 2. There is no criteria considering an employee's hours ....... count them on 1/1/2019 regardless of Hours. ..... Jeff

Our Benefit Election forms have a section called COURT ORDERS where one of two choices ("are" or "are not") needs to be checked: [ ] I hereby certify that my benefits [are / are not] subject to a court order dividing benefits as a result of a dissolution of marriage. (These are actually 2 separate lines on the Election Form) Assuming the participant checked the "are" box, wouldn't that stop you from further processing of the benefit request? ....... i.e. go back to the participant to say "Get a QDRO, and send it to the Plan." In absence of getting the QDRO subsequently, I leave it to the attorneys to answer. .... Jeff