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Message Boards Digest

February 23, 2022

Here are the most recently added topics on the BenefitsLink Message Boards:

BG5150 created a topic in 401(k) Plans

Service Spanning Rules and Entry Date

"Plan specs: age 21, 2 mos service, monthly entry.

Participant:

DOH 3/7/21

DOT 4/29/21 (not 2 month svc)

RH 10/5/21

When is entry date? Rehire date or 11/1/21?

Slight change:

DOH 3/7/21

DOT 5/17/21 (2 months but did not make entry date)

RH 10/5/21

When is entry date? Rehire date or 11/1/21?"

2 replies so far   |    Click Here to Add a Reply
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Khatva created a topic in Form 5500

Contradictory Instructions on EFAST Web Site

"I'm trying to sign and submit a 5500-EZ on EFAST as a sole proprietor (both employer and plan administrator). The instructions on the DOL web site are terrible. On the 'add signers' page (as well as the users guide, I believe), it says:

Here are some things to consider when adding signers:

'• If the same person serves as both the plan sponsor and plan administrator, that person should check both 'Plan Administrator' and 'Plan Sponsor' boxes.

• If one person serves in multiple roles, you need only add that person once as they will be able to sign for multiple roles at one time.'

However, on the signature page itself, it says:

'* Please select the role(s) for which you are signing. You may select all that apply. <checkbox> Plan Administrator <checkbox> Employer <checkbox> Service Provider using E-signature alternative option (reference EFAST2 FAQ 33a) If the same person serves as both the plan employer and plan administrator, that person should check only one of the 'Plan Administrator' or 'Plan Employer' boxes. The IRS Code permits either the plan sponsor/employer or the administrator to sign the filing. However, any Form 5500 that is not electronically signed by the plan administrator will be subject to rejection and civil penalties under Title I of ERISA.'

I bolded the relevant sentences. The site literally contradicts itself. The page for adding signers says 'If the same person serves as both the plan sponsor and plan administrator, that person should check both "Plan Administrator" and "Plan Sponsor" boxes.' The actual signing page says 'If the same person serves as both the plan employer and plan administrator, that person should check only one of the "Plan Administrator" or "Plan Employer" boxes.'

To validly sign the 5500-EZ, do I check both boxes, as I am both employer and plan administrator (and sponsor), or do I only check the 'plan administrator' box?"

No replies yet   |    Click Here to Add a Reply

Brenda Wren created a topic in Retirement Plans in General

Another IRS Denial of Extension Request -- with a Twist!

"We filed 2 extensions for 2 plans with plan year ending 4/30/21. The extensions were sent to Ogden, Utah, return receipt requested on November 3, 2021. One envelope, two extensions. We typically file extensions one month before the due date. Today, one of our clients received a denial of the extension request. Upon closer review of the crumpled, torn-up return receipt from the US Post Office, the stamped date of receipt was December 6, 2021. While this is after November 30, most assuredly the envelope was mailed in time as the US Post Office could never deliver anything from Florida to Utah in 6 days! So we notified the other client that they would likely receive a denial as well. Well, guess what? They received their letter from IRS today, too! But theirs WAS APPROVED!

It's a darn shame that we are at the mercy of IRS and the US Post Office. This is totally unfair to all of us and our clients. IRS should immediately develop a system to electronically file extensions! Or do away with the 7 month deadline all together! It is painfully obvious that they do not have the manpower to conduct their 'business'. It took them 2-1/2 months to process a form! We are basically powerless to do anything other than pay $750 and file under the Delinquent Filing program. Not worth the aggravation to fight it or risk it for our client. I guess we need to file these 2 months early to TRY to avoid the problem we had with the 2019 filings. I don't think they got around to processing those requests until the following year!

Has anyone figured out how IRS is able to have their letters delivered on the date they issue them? Time travel?"

4 replies so far   |    Click Here to Add a Reply

BG5150 created a topic in 401(k) Plans

Participant Terminated in 2020 But Paid in January 2021: How to Treat under ADP Test?

"Participant terminates December 28, 2020, but the next pay date is January 5, 2021. Is she in the 2021 ADP test even though she did NOT perform services for the employer in 2021?"

3 replies so far   |    Click Here to Add a Reply

Dazednconfused created a topic in 401(k) Plans

Treatment of Money Paid to Participant in Settlement of Lost Wages Dispute

"Participant terminated in 2018, in 2021 agreed to a settlement, part of which wage income of $6k monetary consideration for disputed lost wages. The wages were paid as W-2. Nothing in the settlement addresses plan contributions. Should this be considered back pay and allocated an allocation based on 2018? I'm seeing Treas Reg. sec. 415(c)-2(g)(8) but I'm wondering whether the 'disputed lost wage' would otherwise have been included (such as underpaid for hours worked)."

2 replies so far   |    Click Here to Add a Reply

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