Message Boards Digest

November 11, 2022

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

RaiCMC created a topic in 401(k) Plans

Small Plan Deferrals Deposited in a Timely Manner But Unable to Allocate Due to Payroll Breakdowns Not Being Submitted

"We are a TPA and have a small client that deposits its payroll in a timely manner (within 7 business day). However, they are always late in providing the payroll file/breakdown.

There has to be some type of ramification for not being able to invest the participant's deferral in a timely manner. We've researched and can't find anything to send to the client to let them know about penalties they would incur for not providing the payroll files timely."

3 replies so far   |    Click Here to Add a Reply

Dougsbpc created a topic in Retirement Plans in General

Oops -- Two of the Four Partner-Participants Decided to Incorporate During Partnership's Plan Year

"A 50-participant 401(k) plan is sponsored by an LLP. There have been 4 individuals in the company who each have had a 25% interest in the partnership for many years. It turns out that in 2021, two of the four partners incorporated but nothing was ever mentioned about it. Now the CPA is disallowing the contributions funded for the 2021 year for the two that incorporated because their corporations did not fund the contributions. Instead, the LLP funded the contributions. Also, because nothing was mentioned about it, the two that incorporated have not adopted participating employer adoption pages to the plan document. Is this something that could be fixed under EPCRS?"

No replies yet   |    Click Here to Add a Reply

RayJJohnsonJr created a topic in Defined Benefit Plans, Including Cash Balance

Rash of Inaccurate Assesments of IRS Penalties for 'Late' 5500 Filings

"Over the last two years we have experienced a spike in the IRS assessing late filing penalties on 5500s which were filed on a timely basis. The penalties have always been in the $1,000s. For example, a few days ago a client received a late fee letter on a plan that was never installed and has never filed a 5500 on a tax ID that was obtained 15 years ago. The penalty is $25,000. We usually get the IRS to correct these and eliminate the penalty with our first letter to the IRS, but sometimes it takes two and three letters to get the IRS to relent. Is anyone else experiencing this problem?"

No replies yet   |    Click Here to Add a Reply

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