Alonzo Church

I believe interest is due on those retroactive payments.

This is complicated -- but, at the very least, the participant is entitled to a single payment from the db plan equal to all the payments she should have received, plus interest. Everything else depends on the provisions of the plans involved. I have a feeling a lump sum was not available from the pension, so there was never a valid election, and the pension started paying out in the default form (and the checks were never cashed).

I don't see the point of joining a PEP mid-year if you have an ongoing plan. You don't lose the compliance and filing requirements for the year. You just end up having to do them at an unexpected time. Since recordkeepers can only do so many year end transitions, this may be a complication for PEP plans going forward.

SCA --- What is your state? Do you have any reason for thinking benefits were put away for you and nobody told you?

After-tax Employee contributions are subject to the same rules as 401(k) deferrals and loan repayments regarding the timing of the deposit. Meaning that they have to be put into trust promptly after they are withheld from pay. If you are asking, indirectly, whether employee contributions can be assigned to a different plan year for 415 or ACP test purposes than the year in which they are made, the answer is no with respect to the ACP test and "I haven't researched it" with respect to annual additions.

Scenario 1 -- Where did the withheld contributions go? If they did not go into trust, you might be better off with an approach that involves there being no plan between 1-1 and 4-30.

This is not as cut and dried a question as you might think. In PEO world, there is always a question as to whether the real employer of the contractor is the staffing firm or the company the employee is being leased to. The first employer seems to be taking a stance that the only true employee of the company are the central office folks. Your client may have gotten a legal opinion that what they are doing is OK and, indeed, the only way they can manage the situation without becoming a MEP.

Are the "part-timers" being paid on a W-2 or a 1099? If it's a 1099, then there isn't an issue.

Did the DB Plan show it as a transfer out? If so, I would show as transfer in. Otherwise, other contribution probably makes the most sense. (nb -- I think showing it as a transfer is the most technically valid answer)

Some thoughts: 1. Are they still sending money to the bad MEP? Can they just stop doing that and start with their own plan now? 2. The way getting the old money out of the bad MEP is through a trust to trust transfer. Moving the money sooner is better, but a delay in that is not going to complicate the compliance appreciably. 3. You need the Plan document and any contract to figure out what the employer and MEP sponsor have agreed to do. The SPD does not give you enough. I would assume the cessation of the auto-deferrals mid-year blows the QACA for that year, absent guidance to the contrary. I was.n't able to find any through a quick google search.

Consider amending your returns rather than reporting this as a distribution.

My suggestion is to start here: https://www.pensionrights.org/forms/contact-us They will get you to the right people to talk to.

What does the auditor propose doing? Is the error within the auditor's materiality standard? If you are going to have to restate prior financials, I would push back hard. If that's not the remedy proposed by the auditors -- maybe get counsel to look at the issue and opine that everything is pretty much OK. Note that a new firm of auditors will have to focus on this issue so make sure you have your resolution tidily addressed in your files.

QDROphile -- I assumed that the plan was making use of the 404(c) exception. Otherwise, all investment decisions are fiduciary and we would not be having this conversation.

Generally, a selection of a broad range of investment alternatives is a fiduciary requirement. So evaluating the advisability of adding a managed account would seem to be a fiduciary decision. I don't know that there is bright line guidance of this and, when faced with that kind of decision, my own instinct is to ask if there is any real harm by having the fiduciary committee weigh in. In terms of liability -- the fiduciaries would be named in any lawsuit involving the managed account.

Here is the alternate point of view -- Per 29 CFR 2520.104b-10, the Summary Annual Report is to be provided to participants and beneficiaries of the plan for which the annual report is required. By the time the SAR is prepared, there are no participants and beneficiaries for that plan. Frankly, the SAR is easy to produce and usually not too hard to distribute. Why not go ahead and avoid any risk? If the reason is that somebody forgot to do it -- well, you have an excuse for not doing so.

The new plan will be a spinoff of the old plan. You should be able to continue the old elections for the time being. Are the deferrals going into trust or is the employer just hanging on to them? That's what makes me nervous about your scenario.

In a situation like this, there are details that make a big difference in the answer. The key rule is this -- if the current surviving spouse never gave written, notarized consent to you being a beneficiary of your father's Keogh Plan account, then she is deemed to be the beneficiary. (There might be an exception if your father was married less than a year at his death, but most plans I work with don't provide for that exception.) Unless your father had elected a distribution option that named you as beneficiary before his marriage to his current spouse, and benefit payments had started before his death, you probably have no recourse. If your situation is in the least bit complicated, talk to a lawyer rather than us.

1. I don't believe the COVID emergency relieves the plan administrator of the responsibility of responding within 45 days to a disability claim. There is a 30 day extension available to an plan administrator if the extension is required for reasons outside the control of the plan. COVID likely qualifies. "Processing time" does not. 2. The question on whether the ERISA and plan mandated timeline is met matters if you want to go ahead and sue for your disability benefit. If you have no intention of retaining a lawyer at this point in time, the 7 day extension is something of a "so what". But it will be helpful in any later litigation.

What does the SPD say about responding to the claim? If it says 45 days, and says nothing about "unless additional time is required for processing", the additional time may not truly be available. What does the SPD say about claims where the administrator fails to respond?

I don't see a fix that will work without VCP. IIRC, VCP corrective allocations to correct prior year errors are not subject to current year annual additions limitations.

Is the amount of the dc contribution mandated by the plan document in some fashion or is the dc contribution amount entirely voluntary? My guess is that there will need to be a tax return/5500 amendment regardless, but there might be a way to fix any qualification issues through epcrs through additional allocations to NHCEs.

Just to be clear, you do have a PT under ERISA, and the Form 5500 Schedule G disclosure is appropriate.

Take a look at 4975(e)(1), which defines "plan" for the purposes of the prohibited transaction excise tax. Welfare plan trusts (VEBAs and anything else) are not defined as PTs. However, depending on the nature of your trust and the expenses paid, you may have other issues that may endanger the tax qualification of your trust.

Can I have your auditors? Would this approach survive partner review? If you got your money into some kind of interest bearing account with your trustee (an approach I have used in blackouts), you do avoid the problem. But the hassle may not be worth it just to avoid the annoying but easy enough to do filing.