Message Boards Digest

June 24, 2022

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

Ananda created a topic in Correction of Plan Defects

OK to Retroactively Amend Plan to Bump Up Contributions for NHCEs?

"A plan client wants to make a retroactive amendment going back to the beginning of the 2021 plan year that is not corrective of a plan document failure, operational error or discrimination violation. This is a voluntary retroactive amendment to add additional accrued benefits to NHCE plan participants. Thus there are no anti-cutback or discrimination concerns. Shouldn't this retroactive amendment be permissible with no need to rely on SCP or 1.401(a)(4)-11(g) because this is not a correction of a plan or operational violation?"

3 replies so far   |    Click Here to Add a Reply

thepensionmaven created a topic in Retirement Plans in General

What's the Appropriate Plan Sponsor for a Retroactively Adopted Plan?

"We currently administer a profit sharing plan sponsored by a dental professional association (hereafter, the 'Former P.A.'). No individual accounts. Two trustees. One recently retired, and a replacement was named November 2021. When that happened, ownership changed to a new professional association.

Under SECURE, we set up three separate plans in the name of the Former P.A. (one for each trustee), effective 1/1/21. The third plan is for the employees, effective 1/1/21 (the Former P.A. is on extension).

All contributions have been made to the existing plan in order to coincide with the Former P.A. The existing accounts will be transferred into their respective new plans with individual accounts in 2022.

One of the trustees is itchy that the new plans were set up as being sponsored by the Former P.A. but we told him it had to be this way because the new professional association did not exist on 1/1/21.

The money will not be transferred until 2022 and we're applying for a fidelity bond (and the bond will not cover prior acts).

Under these facts, is it appropriate that the three plans set up for 2021 under SECURE are in the name of the Former P.A.?

The new plans probably will not be funded until individual accounts are set up with a carrier, prior to the due date of the Former P.A.'s tax return."

2 replies so far   |    Click Here to Add a Reply

ESI2015 created a topic in Relius Administration

Looking for Advice or Vendor for Converting Datair to Relius Administration

"We recently acquired a small TPA firm -- less than 100 clients. Former owner used Datair but we are a Relius group. Relius cannot accommodate a conversion until 4th quarter.

Does anyone have experience converting from Datair on their own? They're going to send us instructions but the former owner did not use Datair export so we're lacking in support issues.

Or, does anyone know of an independent contractor that can be contracted to work on these types of tasks? Looking for suggestions based on past experience."

No replies yet   |    Click Here to Add a Reply

TPApril created a topic in 401(k) Plans

Existing Controlled Group -- Effect of Mid-Year Departure by One Member on CG Determination

"Company with multiple doctors, set up so each doctor has their own corporation with their own plan, and one plan for the employees. All plans are combined for testing (they also mirror each other).

One of the doctors is exiting the firm toward the end of the year in order to go independent. She will exceed 1,000 hours for her own corporation while still a part of the Controlled Group, but not after she departs.

I think hours are only relevant for Controlled Group testing because she will definitely work 1,000+ hours for her own corporation. Because employer contribution requires continued service on last day of the plan year, I believe the contribution will not be included in the combined testing, which will reflect a $0 for her. Agree?"

No replies yet   |    Click Here to Add a Reply

David Peckham created a topic in Plan Terminations

Terminate DC Plan Prior to Cycle 3 Restatement Deadline Without a Restatement?

"Client has not yet restated DC plan for Cycle 3. Client is willing to sign interim amendment for a plan terminating in 2022. What are the issues if he terminates the plan prior to 7/31/2022, the Cycle 3 restatement deadline, without actually restating the plan for Cycle 3?"

1 reply so far   |    Click Here to Add a Reply

K-t-F created a topic in Form 5500

Is Electronic Form 5500-EZ Filing Mandatory for This CPA?

"A CPA I work with prepares his own 5500-EZ. He is telling me that he must file the EZ electronically because he files more than 250 returns. Per the EZ instructions he is reading this:

'Mandatory electronic filing. A filer must file the Form 5500-EZ electronically using the EFAST2 Filing System instead of filing a paper Form 5500-EZ with the IRS if the filer is required to file at least 250 returns of any type with the IRS, including information returns (for example, Forms W-2 and Forms 1099), income tax returns, employment tax returns, and excise tax returns, during the calendar year that includes the first day of the applicable plan year.'

While he may file in excess of 250 returns on behalf of his clients, it is my contention that what is written he is interpreting incorrectly. Is what the IRS is saying the following... that if the plan sponsor files in excess of 250 returns on behalf of them self then sure, they must file the EZ electronically. But because he files on behalf of his clients that is not the case, don't need to file his EZ electronically.

I am happy to file the EZ electronically to sooth his anxiety. I just don't think it's necessary."

6 replies so far   |    Click Here to Add a Reply

Bob Demontigny created a topic in 401(k) Plans

Controlled Group Situation for Spouses' Proprietorships; File Form 5500-EZ or Form 5500-SF?

"Spouses in California own separate sole prop businesses without employees and each has a solo 401(k) plan document. May I file a 5500-EZ for each separately, or must I file a 5500-SF for each due to controlled group status after the $250k ceiling is reached. I recall that used to be the case in 2008 but I believe the rules have changed."

1 reply so far   |    Click Here to Add a Reply

BG5150 created a topic in 401(k) Plans

Remove Roth Feature Mid-Year for Safe Harbor Plan?

"SH plan. Employer wants to remove Roth feature effective 7/1/22. Calendar year plan. Legal?"

1 reply so far   |    Click Here to Add a Reply

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