Missed minimum funding deadline of September 15, but said date falls on a weekend.

[Pxhesq]

Client missed minimum funding deadline of September 15, but said date falls on a weekend. Client got the funding in by the following Monday, is this an issue or is the deadline pushed back since Sep. 15th falls on a Saturday this year? I cant seem to find any persuasive information on the matter and prior discussions on benefits link regarding the issue offer differing opinions. Thanks for your help.  

[david rigby]

Some prior relevant discussion here:

https://benefitslink.com/boards/index.php?/topic/58857-to-some-a-numerically-interesting-date

 

[CuseFan]

9/15 is a hard deadline for ERISA minimum funding and falling on a weekend unfortunately does not give the plan sponsor more time for minimum funding purposes, regardless of tax return due rules.

[Effen]

A contribution is deemed to be made once the payment leaves the sponsors control, so consider how the payment was made, and when did it leave their control?  Did he write a check - when did he mail it?  If he walked into the bank on Monday to initiate a transaction, then it is late, but if he did it on Saturday and it didn't post until Monday - he might be ok.  

[david rigby]

4 minutes ago, Effen said:

... but if he did it on Saturday and it didn't post until Monday - he might be ok.  

This may be correct; however, my understanding of the "mailbox rule" is that the postmark governs, rather than the date deposited in a mailbox.  I'm ready to be corrected if there is other information.

[PensionPro]

We advise clients that the minimum funding deadline is not extended if it falls on weekend or holiday but if client already deposited contribution on Sept 17 there are a couple of arguments:

1. PLR 8139009, but it is just a PLR
2. "It can be argued that, since failure to satisfy the minimum funding deadline results in a funding deficiency, which triggers the excise tax under IRC sec. 4971, that IRC sec. 7503 is applicable." - EOB.

[thepensionmaven]

Where can I find PLR 8139009 - have search online for about 10 minutes.

I having been under the impression that there is no extension of the 8 ½ months for minimum funding, although there would be for deduction.

 

[PensionPro]

1 hour ago, thepensionmaven said:

Where can I find PLR 8139009 - have search online for about 10 minutes.

I having been under the impression that there is no extension of the 8 ½ months for minimum funding, although there would be for deduction.

 

http://www.legalbitstream.com/scripts/isyswebext.dll?op=get&uri=/isysquery/irlf22d/1/doc

 

[SoCalActuary]

If made too late for minimum funding, but the tax return is not due until October 15, he will want to deduct it.  Pro or con, what do you all think?

There is a line of discussion that the contribution must be applicable to the prior year end form SB, and therefore not deductible because it is too late for minimum funding.

However, if included in the 5500 form as a receivable, accountants argue that it is on account of the prior year.

[C. B. Zeller]

This presentation has some good info: https://www.asppa-net.org/Portals/2/PDFs/2016AnnualHandouts/WS18 - Deduction Limits for DB Plans and Combined Plans.pdf

Discussion of deduction year starts on page 24.

[AndyH]

The certifying actuary will want satisfactory evidence in his/her mind that the contribution "left the sponsor's control" by 9/15 as Effen said.