Basically

New plan last year. Getting a feel for the business. 2 employees have recently terminated. The office manager said that sometimes these guys quit but come back later. Plan is a SH match. Payout is immediate. I can make sure they are whole with regards to the SH match so their payout is complete and final. But what if they come back? There would be no forfeiture because it's a SH plan and everything is 100% vested They could put their money back if it is within 60 days (right?) If they come back before a year has passed there is no break in service so they would be back in. Am I good with regards to my understanding? Thanks

A 401(k) plan ... single member... no rank and file employees

Single member company wants to invest in a UK based company. The company is not publicly traded. Are there mixed thoughts? Can it be done? Thanks

Thanks for the responses. Here is what I did. first, I had the plan designed as "automatically passes TH test" . I have designed SH plans that way, but this is not a SH plan. Just a PS plan. I eliminated that and the system made corrections. Second, one employee technically was terminated (retired) 11/30/2020. He received a year end bonus that payroll counted as 2021 compensation. So he is removed from the equation. Third, the last employee was given a 3% TH contribution. Still employed as of the end of 2021 but below the hours requirement. I learned he should still get the TH minimum. Make sense?

yes... last day is a requirement.

I have a plan. It's top heavy. All eligible employees receive at least an 18% contribution. When I run the tests I am failing TH. How can I be failing a TH test? Eligibility is 500 hours. 2 employees work less (much less). To pass 410b I had to override and let 1 of them in. What more needs to be known?

Yes, correct, I am aware and have prepared the form 14704 before. This plan received a notice with an attachment : Attachment 1562-D, "Compliance Check Information Request". They are asking why since the last form 5500 filed have they not received another form 5500. Under What you need to do on the form they go on to say, "If you filed all required Forms 5500-EZ for the plan years after December 31, 2017, provide copies of those returns. We'll correct our records if these returns bear an original signature and you certify that they're true copies of the returns you previously sent to us." Only 1 year after 2017 were the assets greater than $250K (the 2019 return). It was not filed and the client has decided to file under the penalty relief program (and not write a reasonable cause letter) I have never seen this notice before. Easy enough to answer and comply. Thanks

Update, the assets of the plan indeed have fluctuated. Fluctuated to the point where: 2017 above $250K 2018 below $250K 2019 above $250K 2020 below $250K 2021 below $250K The financial advisor wants to file all these years anyway. Only 2017 was filed on time, and we can still get 2021 in before 7/31 (or file an extension). 2019 is the only truly late return. Here is my question - since only 2019 was required, would we only file 2019 under the DFVCP and pay the $500 and leave well enough alone? I'm hesitant to file 2018 and 2020. I don't want to send up a flag for a return that, A) wasn't required, and B) wasn't filed. Maybe, will the IRS accept the unnecessary returns if filed late and not under the DFVCP and say "ok, thanks, you didn't need to file but you did", or do you think if I am filing late regardless of had to or not, I still need to file with a $500 IRS user fee? File all 3 late with $1500 fee under the DFVCP program? They really just want to be safe. Thanks

A single member plan that invests through Merrill Lynch made every effort to liquidate before 12/31/2021 so that the plan can be terminated. The process started in August of 2021 and everything was rolled into IRAs. For some reason 14 shares of an investment kept being returned to the account. $1,900 dollars. It left and came back and left and came back. The advisor is saying its a ML back office problem. He has a documented paper trail. I am of the mind to say the plan is terminated as of 12/31/2021. If an issue arises later then deal with it then. Sound good? Anyone ever have this problem?

Thanks. Appreciate the response.

A client is telling me that the form 5500EZ does not need to be filed this year because their assets have dipped below $250,000 (as of 12/31/2021). Makes me nervous to not file. Do people skip a year if the plan's assets don't exceed $250,000? Or is it recommended/you recommend to the client to keep filing? OR by chance, is an EZ plan required to keep filing once a form was filed (even if assets are less than $250,000 now)?

Thanks. I guess simply removing wouldn't dot any "i's" or cross any "t's". I'll pull out the template I have. Appreciate the responses.

I've done this before but it was not during a restatement year. A small plan (husband, wife, 1 employee), husband and wife are divorcing. Can I simply prepare the Cycle 3 restatement docs and take her off as a trustee? Or does she need to formally acknowledge and agree to no longer be a trustee in amendment form in addition to the restatement? Thanks

Got it.

Sadly I started my pension career in '83, back in the day when we used "PENTABS" for anyone who remembers that system from Santa Barbara CA. Back when there were no message boards... no internet to research and ask questions, just the CCH books with their tracing paper pages (hated pulling out pages and adding replacements when rules/laws changed). I know the answers... it's just reassuring when I ask you fine people and your responses confirm what I already knew. So... cheers to you all! 🍺 To stay on topic... yes Bird... it's all about moving the assets. I told the new financial advisor to use the EIN on file for a seamless move. I'll take a look at that link. Appreciate it.

I have a client I have been working with for many years. He started with a Keogh opened at Paine Webber. In 2007 I restated the plan into my independent doc (ftWilliam). Back when he adopted the plan typically the account was opened using the sponsor's EIN. I have advocated forever that a plan needs it's own EIN. I obtained one (sadly I can not find the paperwork that assigned an EIN for the plan). Now, the client is switching financial advisors. The funds are going to be transferred "trustee-to-trustee" to the new financial institution. I provided the EIN I had in my records only to find out that the existing financial institution has a different EIN and so the funds would not transfer because the EINs are different. I understand that. Here's my question... the existing financial institution produced an EIN assignment (a copy of the SS-4). It goes back to 2006. The client has never taken a distribution and as you know the EIN on the 5500 is the sponsor's EIN. - Is this original EIN defunct at this point ? I mean, after so long with no activity don't they die? - or, should we use it for the transfer because his existing accounts are registered with it? I think that's enough info.

I do like the instant confirmation filing the SF electronically (for my traditional plans). I guess it's time to move towards electronically filing the EZ. Thanks

Does everyone file EZs electronically now? I just spoke to him and will file electronically.

For himself... not for his clients. If HE for his own business (or personally across all his businesses?) was required to file 250+ returns then yes, he needs to file electronically. But because he prepares returns for his clients this rule does not apply. Right?

Prove me wrong.... A CPA I work with prepares his own 5500-EZ. He is telling me that he must file the EZ electronically because he files more than 250 returns. Per the EZ instructions he is reading this: Mandatory electronic filing. A filer must file the Form 5500-EZ electronically using the EFAST2 Filing System instead of filing a paper Form 5500-EZ with the IRS if the filer is required to file at least 250 returns of any type with the IRS, including information returns (for example, Forms W-2 and Forms 1099), income tax returns, employment tax returns, and excise tax returns, during the calendar year that includes the first day of the applicable plan year. While he may file in excess of 250 returns on behalf of his clients, it is my contention that what is written he is interpreting incorrectly. Is what the IRS is saying the following... that if the plan sponsor files in excess of 250 returns on behalf of them self then sure, they must file the EZ electronically. But because he files on behalf of his clients that is not the case, don't need to file his EZ electronically. I am happy to file the EZ electronically to sooth his anxiety. I just don't think it's necessary.

perfect, thank you.

I have read: (1) that a younger beneficiary of a deceased plan participant is entitled to take a lump sum distribution and not be subject to the 10% premature distribution tax because the deceased participant was older than 59-1/2. (2) But then I also read that "the lump sum you receive will be subject to local, state and federal income tax. However, you will not have to pay the 10% early withdrawal tax even if you and/or the deceased person are under 59 ½" That seems fair to me, but then I don't decide what is fair. Is #2 correct? And on the side, the spouse of the beneficiary has no bearing at all on any tax matters.

Zeller, I am using the ftWilliam doc, so I gather I can open the vesting section and place Suzie Doe in there and say that she is 100% vested upon her termination and that will fly? david rigby, I will for sure get it done prior to her being paid out. Thanks

This small CPA firm has 6 employees. A receptionist is leaving and is 80% vested at best. The owner wants her to receive her full account balance. The 2/20 TH vesting leaves her just short. I suggested with the Cycle 3 restatement requirement change to a 3 year cliff which would also be TH compliant. He want's to just give her the full account balance (her money is segregated, all segregated investment accounts). He asked me "what if we call it a mistake, we paid her out everything by mistake, what harm would there be?" I said it would be an operational failure, you didn't follow the document as it stands. Would the IRS come down on them if by chance there is an audit? He wants to just do it.

Appreciate all the responses, thanks for your help!