Single participant MPPP

[Moe Howard]

Soleproprietor has a MPPP. Owner/proprietor is the only participant.

Owner does not want to contribute for current plan year. I told him that he must contribute 10% because it's a MPPP and the adoption agreement requires a 10% contribution each year.

Does the fact that he is the only participant allow him to avoid having to contribute?

Why should the DOL care if he contributes or not. It's not like some employee participant is going to complain.

The reason I ask, is because I am preparing the Form 5500-EZ. Line 10, requests info about contribution amount if the plan is a defined contribution plan that is subject to the minimum funding requirements of Sec 412 of the Code.

I don't want to falsely claim on the 5500-EZ that the plan is not subject to Sec 412 minimum funding.

Does anyone know if there is some exception to the Sec 412 minimum funding requirement, that might allow him to not contribute simply becasue it is a single owner/participant plan ?

[jpod]

If it truly is a one-person plan exempt from Title I of ERISA, you are correct that DOL won't care, but that would be because it doesn't have any jurisdiction to care. However, 412 still applies, as does the 10% excise tax for minimum funding violations.

By any chance does the plan have a "last day" rule? If it does, are we talking about the current plan year (I know that you said "current plan year," but your discussion of the 5500-EZ threw me off a bit)? If we are talking about the current plan year, I think that is a sufficient basis for amending the plan to reduce the contribution to 0% for the current plan year without violating the anti-cutback rule.