"[1] If Plan A invests in a Collective Investment Trust (CIT) that does not file as a DFE, what are Plan A's 5500 reporting requirements for that investment? Is a Schedule A required? [2] If the CIT does file as a DFE, what schedules are required with the DFE filing itself?"

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"Plan uses Prime + 1% normally. We made a boo-boo, where we did a loan for someone but forgot to add 1% to Prime (Prime was 5.25%). What would the correction look like? Or I am also floating a threory that Prime is not an unreasonable rate so maybe there is no correction at all? Or maybe we need to pay the participant 50% of the additional interest that would have accrued from inception to date? And what about going forward? Why should he agree to a refinancing to 'fix' the rate if his promissory note says 5.25%?"

"A sponsor wants to amend their plan to require employees who defer to defer at least 4%. Employees cannot elect a lower percentage unless it is zero. Other than needing to be tested under 401(a)(4), how would we even do this? Is this permissible? It seems like it would flagrantly disfavor NHCEs. Complicating matters is the fact that the plan presently has a Safe Harbor match, and plans to keep it for the foreseeable future."

"For a terminating cash balance plan that's overfunded, must all assets from the plan retain QJSA options for distribution? Or instead must one only preserve the QJSA option for amounts correlated to respective individual hypothetical account balances?"

"Sole proprietor adopts SEP, contributes in compliant manner for a few years. Has no employees. Later ceases to operate as a sole proprietor and becomes member of partnership and gets K-1. Keeps contributing to SEP as if K-1 were Schedule C income for several years. His only business income after joining the partnership is from the partnership, reported on the K-1 (i.e., individual does not have any non-partnership related Schedule C income after joins partnership). Assume partnership had no qualified plan and no non-5% owner employees. Partnership (i.e., other partners in their capacity as such) had no knowledge of SEP or that sole proprietor turned partner had continued to contribute to it. Assume also that SEP documents show individual's sole proprietorship as only adopting employer.

A couple of other practitioners have looked at this and opined that the contributions based on the K-1 income are simply excess contributions to an IRA (i.e., they exceed the individual's contribution limit), IRC sec. 4973 6% excise tax is owed, contributions must be withdrawn to stop further excise tax, individual will owe ordinary income tax on distributions reportable on 1099-R, and will be subject to 10% premature distributions tax under IRC sec. 72(t) because under 59-1/2, and IRC sec. 4972 tax on nondeductible contributions also applies.

However, EPCRS seems generally to treat SEPs analogously to qualified plans, and it seems that there has been a violation of 415(c) and we have excess amounts that under EPCRS need to be distributed to employer (which, admittedly, is the same individual) as a return of an excess amount, and that the returns for prior years should be amended to reflect nondeductibility, and the 1099-R will show "$0" as the distribution amount to individual. The IRC sec. 4972 tax would still need to be paid. See Section 6.11(5) of Rev. Proc. 2019-19. I don't see why the rule would apply differently just because a single participant sole proprietor SEP is involved. VCP would be required, since SEPs qualify for SCP only for insignificant failures, and anyway this is more than two full plan years old.

Anyone ever dealt with IRS on this or a very similar issue? Any other thoughts?"

"A pension plan was joined to a divorce back on June of 2016; the case was filed in July 2015. In August 2016, alternate payee receives an audit letter from the plan, to put her community share in an interest-bearing account untill the divorce is final. The plan received a certified QDRO in July 2018. Does the plan hold the funds that were set up in the interest-bearing account mentioned in the audit letter back in 2016 in an 18-month segregation period required by ERISA, or instead when the plan was joined to the divorce? If so, the 18 months will expire soon. Under ERISA, when are they required to release the retroactive benefit to the alternate payee?"