Filings incorrect for years - MPP

[HarleyBabe]

Took over a plan that is a Money Purchase. The Form 5500 has never checked that it's subject to the minimum funding rules section. Plan has been effective since 1983. Can someone please give me direction on this as far as what should I do, if anything, other than say I wasn't responsible for those years and move forward? I feel I need to give them the option of correction and also tell them to have their former TPA pick up the cost. What correction options is there and how far back?

[ESOP Guy]

I have never seen this exact situation so here is my mere opinion:

1) You can only fix the open years. This isn't like they didn't file. So you can only go back 3 years at best.

2) Have they been using the MP code on the 5500? If so, that means the IRS/DOL has known it is a MP plan and they saw they were not completing the section of the Sch R. (I am assuming that is the part that refers to min. funding you are talking about) And so far they haven't done anything about it.

3) What is the worse that can happen here? The IRS/DOL sends a letter and you fix the error. Nothing you said leads one to believe they didn't actually fund the plan. No law has been broken a form has been filed wrong.

As such I would be inclined to just fix it going forward, but if one is worried fix the open years after that move on.

[HarleyBabe]

I have never seen this exact situation so here is my mere opinion:

1) You can only fix the open years. This isn't like they didn't file. So you can only go back 3 years at best.

2) Have they been using the MP code on the 5500? If so, that means the IRS/DOL has known it is a MP plan and they saw they were not completing the section of the Sch R. (I am assuming that is the part that refers to min. funding you are talking about) And so far they haven't done anything about it.

3) What is the worse that can happen here? The IRS/DOL sends a letter and you fix the error. Nothing you said leads one to believe they didn't actually fund the plan. No law has been broken a form has been filed wrong.

As such I would be inclined to just fix it going forward, but if one is worried fix the open years after that move on.

Like your thinking:)