EBP

To clarify rocknrolls2 response, you don't need to do any interim amendments to the money purchase pension plan before it is merged into the profit sharing plan. The updated language in the profit sharing plan will also apply to the money purchase pension subaccounts in the merged plan as applicable. You don't say if you're talking about a pre-approved plan merging into another pre-approved plan but I'm assuming that since you refer to the Cycle 3 restatement deadline. Since the Required Amendment lists apply to individually designed plans, I don't think you need to worry about checking those if you're talking about pre-approved plans. We also did a number of these mergers years ago when MPPPs were no longer needed to increase annual contribution amounts.

There is no DOL fee associated with filing under VFCP. You should be able to ask for a waiver of the excise tax in the VFCP application. If waived, no excise tax is due and therefore, no 5330 is required.

See EPCRS, App. A, section .05(9)(a) for the special safe harbor correction method for employee elective deferral failures that do not exceed three months. The failure can be corrected without a QNEC if the conditions are satisfied. According to the DOL, the DOL calculator can only be used if you file under VFCP. If you don't satisfy the conditions for the safe harbor correction method and you need to calculate the earnings rate, EPCRS is clear on the earnings rate to use. Assuming the plan allows investment direction, EPCRS (App. B, section 3.01(3)) says to use the rate applicable to the employee's investment choices for the period of failure. Most of the time, this is relatively easy to get from the investment provider. For administrative convenience, if most of the affected employees are NHCEs, you can use the rate of return of the highest-performing fund for the period of the failure. And if the employee failed to make investment choices, then you can use the rate of return for the plan as a whole.

Another possible consideration - does the fact that the investment adviser is retired mean that the adviser still keeps up with the current market in the same way as she did before retirement and is therefore still qualified to evaluate investments and give advice? Does she still have access to all the resources she had before to evaluate investments? Generally speaking, it seems to me that an investment adviser needs to be "in it" full-time to give good advice. This is one of the main reasons that the typical plan committee member hires an adviser - because the committee member is not able and doesn't have time to evaluate investments full-time. I think of my uncle, who is a retired financial adviser, who does not even give investment advice to his kids because "if the market goes up, the advice was good" but if the market goes down, the advice was bad and they'll be looking for someone to blame. If he's not getting compensated, he doesn't want to take that risk.

I'm missing where the EOB says no ACP testing, even if it passes easily.

Yes. You can use elapsed time.

What Zeller said. Perfectly acceptable correction under EPCRS.

I would think that the nonelective contribution would factor into a "fully-informed decision," too. Are you saying people will remember that 3% but would forget about the match? No. The participant doesn't need to do anything to get a nonelective contribution. He does have to defer a certain amount to get the match. If the participant doesn't know what the match is ahead of time, he may not elect to defer enough to get the full match. Knowing what he has to defer to get the full match may influence his deferral decision.

So that employees are able to make a fully-informed decision about deferring for the upcoming year based on the match. Yes. For this reason, we continue to issue safe harbor notices for all of our clients, whether they are making safe harbor nonelective or matching contributions.

EPCRS App. A .05(5)(a) applies. You are not eligible for the safe harbor correction method contained in App. A .05(9)(b), which says that "in order to use this safe harbor correction method, the Plan Sponsor must satisfy the following conditions:....(ii) Notice of the failure...is given to an affected participant not later than 45 days after the date on which correct deferrals begin..." So calculate the 50% QNEC plus earnings, make the QNEC for the participant, and move on. It shouldn't be a lot.

Long time reader - first time post. We have a profit sharing plan that terminated and is in the process of distributing assets. Unsurprisingly, there are several unresponsive participants, as well as one missing participant. We are reviewing options for disposition of those account balances. We have completed the IRS/DOL requirements for searching, sending certified letters, etc. Under the DOL safe harbor, the preferred method of distribution is to roll over account balances to IRAs the employer establishes for the missing/unresponsive participants. In the past, we have used Millenium Trust (MT) for such rollovers. In 2017, the PBGC expanded its missing participants program to include defined contribution plans. We are considering whether this is a good or better option than IRA rollovers and are wondering if anyone has used the PBGC program for a defined contribution plan. If you have used the program, do you have any thoughts on or experience with their process? And why did you choose to use it instead of IRA rollovers? If you haven't used it, did you consider it? What were your reasons for not using it? Here are some pros and cons we've considered: IRA rollover - Pros: well-known and well-used provider, purports to comply with ERISA safe harbor, participant can contact IRA provider and choose among investment alternatives or roll over to another plan/IRA Cons: must send notice to participants at least 30 days before transfer, not sure how safe the safe harbor is PBGC program - Pros: no prior notice required (probably a good idea to notify participants, but not necessarily before transfer) Cons: program is new and unknown, there's only one investment option for participants (participant would have to take distribution, presumably in cash, and roll over to IRA to invest differently and also come up with the mandatory withholding amount out of the participant's own funds if the participant wanted to roll the entire amount), no rollover option (as far as we can tell) Another consideration is fees. MT charges fees to the participant, while the PBGC program charges fees to the plan sponsor (and the PBGC fee is lower than the IRA fees). Presumably, a participant could argue that the plan sponsor chose the IRA provider because the plan sponsor didn't have to pay any of the fees. But the plan sponsor could argue that they chose the IRA provider because it satisfied the DOL's safe harbor. Thoughts on pros and cons?