Can an employer offer longer COBRA duration, for example 30 months instead of 18 for a class of employees -- executives, or salaried but not hourly? Assume that the employer does not subsidize the premium.

I terminated a Cash Balance Plan in 2018. We were unable to locate two participants so their account balances were sent to the PBGC under the missing participants program. The PBGC audited this termination and sent me an email stating that the payments made for the two missing participants were not calculated correctly. Both individuals had benefit values in excess of $5,000. I was told I need to use their standard calculation method applicable to traditional defined benefit plans. Is that right? If the lump sum value was less than $5,000 would the account balance be the correct amount to send to the PBGC?

A company is owned 100% by an ESOP. The only contributions are made by the company. The company executives voluntarily decide they want to reduce the executives' compensation contribution percentage to a much lower percentage than is being contributed for other employees. Am I correct in assuming that to do so without a plan amendment to that effect creates a plan failure that needs to be corrected?

A small business has a SIMPLE, and all participants have signed on to have their SIMPLE accounts through one financial firm (let's say Merrill Lynch). Now one participant brings in paperwork that says he wants to open his SIMPLE account somewhere else instead. Does the plan sponsor have the authority to limit where the accounts are? From what I can see, I don't think so, unless maybe the SIMPLE document is specifically a SIMPLE document from ML that specifies that all accounts will be held there... and even then, I'm not sure that would hold up.

I have a (former?) client with a national payroll company that also sells a 401(k) plan and service. He remits weekly payrolls to the payroll company and they calculate and mail the paychecks. They debit a company account. The client has never been able to keep other than a catch-up contribution and tiny match in the plan because of non-existant NHCE participation. He's finally having the best business years of his life and agreed to share his company's success with the employees and also solve the 401(k) deferral puzzle with a 3% SHNEC in 2019. His desire is to fund the 3% SHNEC on a weekly basis along with payroll so as to avoid a big deposit requirement at year's end and to have his employees start seeing money go into their 401(k) accounts. (They all have some money there since moving from a pooled account into individual accounts.) He's (I'm) getting push back from the payroll company saying that this can't be done without amending the plan document. They cite two Adoption Agreement sections:

===

2. ADP Test Safe Harbor ContributionsFor the Plan Year, the Employer will make the following ADP Test Safe Harbor Contributions to the Individual Account of each Eligible Employee as described in item 1(b) above, in the amount of(select one):

Option 4: Guaranteed Safe Harbor Non-Elective Contributions.

___3___ (not less than three) percent of the Employee’s Compensation for the Plan Year.

===

5. Safe Harbor Contribution Computation Period For purpose of applying the ADP Test Safe Harbor Contribution or the ACP Test Safe Harbor Matching Contribution formulas, Compensation will be based on the period selected below (select one)?

Option 1: Payroll period.

X Option 2: Plan Year.

Option 3: Calendar month. Option 4: Plan Year quarter. Option 5: Semi-annual.

NOTE: The calculation of a Safe Harbor Contribution based on the computation period selected shall not require the Employer to remit the Safe Harbor Contribution to the Trust earlier than the time required by Plan Section 3.04(D).

===

They fear that making such an amendment (probably to Section 5 above) might throw the plan out of Safe Harbor status, which admittedly would be a disaster.

Do you think I should just let go and wait for an early October amendment effective 2020?

A retirement plan, to tax-qualify under Internal Revenue Code § 401(a), must meet all conditions not only in the written plan but also in actual administration according to that written plan. The Internal Revenue Service’s Employee Plans Compliance Resolution System presumes the point; the Revenue Procedure defines an Operational Failure as one “that arises solely from the failure to follow plan provisions.” Rev. Proc. 2019-19, 2019-19 I.R.B. 1086, 1099 § 5.01(2)(b) (May 6, 2019). (Thank you, C.B. Zeller.) Unlike some other points made in the Revenue Procedure, this one cites no Treasury regulation as support for the point. Writers often say a plan must tax-qualify not only “in form” but also “in operation”. There are Treasury regulations and court decisions that support the in-form point. But I’m not (yet) seeing a regulation, court decision, or other law source that clearly states or supports the in-operation point. Can you provide a cite?

Can a plan be amended to have an in-service distribution amount prior to age 59-1/2? I'm speaking with one of the the big payroll companies, and they say they can't change this provision. I received a different response from some else, though -- who says that such a provision can be written into the plan, such as age 50 with 10 years of service.