late deferral deposit correction

I'm sure this has been asked a lot in the past and so thank you for your patience.  And I realize SECURE 2.0 may have changed this possibly. 

Have a client who hasn't deposited for 4 months in 2022. Dentist bought a practice and didn't know they or their new payroll company needed to initiate payment.  The amount for the 4 months is probably less than $5,000.  It's being deposited now and I know to report on the 5500 and file Form 5330.  My question is the earnings calculation.  This will be self-corrected.  Can I use the DOL earnings calculator?  It is easy to use and takes out any ambiguity.  I read different things about whether can be used or not.  I'm pretty sure the DOL earnings will be higher than the plan actual earnings for this period (which could even be a loss.)

Thank you.

According to the DOL, the DOL calculator is only to be used in two situation.  First, when a VFCP filing is being made.  Second only when the other methods of calculating earnings are less than what the DOL calculator provides (i.e., actual earnings are negative for the period in question).   Absent meeting one of those two scenarios, in the DOL's eyes the calculator is inappropriate.  Since you'll be checking the box on the 5500, the DOL **WILL** invite thee plan sponsor to use the VFCP approach - and we usually advise clients to kindly accept the DOL invitation.

2 hours ago, MoJo said:

Since you'll be checking the box on the 5500, the DOL **WILL** invite thee plan sponsor to use the VFCP approach - and we usually advise clients to kindly accept the DOL invitation.

In my experience, checking the box on the 5500 does not guarantee an invite.  That said, I recommend accepting the invitation if you get one.

I'm usually in the minority on this one, but I have found the DOL to be easier to work with than the IRS if you are forthcoming and cooperative.

3 hours ago, RatherBeGolfing said:

In my experience, checking the box on the 5500 does not guarantee an invite.  That said, I recommend accepting the invitation if you get one.

I'm usually in the minority on this one, but I have found the DOL to be easier to work with than the IRS if you are forthcoming and cooperative.

It does depend on the office of the DOL involved.  Some may take their time - but our experience is that ultimately it will hit their radar.  Usually, at least for the DOL office where we have substantial business, they tend to "batch" the invites and send them all within a short period of time, 18 months to 30 months after the filing.

And yes, they are easier to work with when you are there voluntarily.  On audit, they have teeth second to none.

1 hour ago, MoJo said:

And yes, they are easier to work with when you are there voluntarily.  On audit, they have teeth second to none.

Agreed.  That's why I try to stay ahead of it when invited